Estimation of the Compensation Amount in the Process of Expropriation of Real Estate in the Republic of Moldova

Abstract

Expropriation is the transfer of assets and ownership rights from private to public property, after a fair and previously determined compensation. The Constitution of the Republic of Moldova, the Civil Code and the Land Code stipulates a “fair and previously determined compensation” in case of ownership transfer. The existing legislative acts in the Republic of Moldova explain the expropriation procedure, but do not cover the estimation process of the compensations and damages caused by the expropriation. In the present study, the authors examine the existing legislative and methodological framework used in the process of estimation process of the compensations amount. The notions of “normative price” and “market price” as “fair compensation” are examined. The challenges and legislative gaps that exist at each stage of the compensation assessment process in case of expropriation of real estate are analyzed. It has been found that the national practice of estimating the damage in case of expropriation for public utility does not ensure the compliance with the principles of equivalence and fails to achieve equitable treatment of the interests of both the private owners and the public administration bodies. It has been observed that the state is damaged by the lack of certainty regarding the valuation date for the assessment of compensation, the owners by not considering some categories of losses, and both parties by the lack of methodological provisions on assessing compensation for expropriation. Based on the research carried out, the authors propose their own methodology for assessing the compensation amount in case of expropriation for public utility in the conditions of the Republic of Moldova.