Madise takes two municipalities’ infrastructure fee rules to Supreme Court

Estonia’s Chancellor of Justice Ülle Madise has asked the Supreme Court to invalidate infrastructure-fee regulations adopted by Jõelähtme municipality and Loksa city, ERR reported.

Madise says Jõelähtme’s regulation, adopted on January 12, 2023, allows the municipality to impose greater obligations on property developers than the Planning Act permits. It also sets a flat social infrastructure fee of 6,500 euros per residential unit without a legal basis, she says. In her view, the regulation breaches the principle of legality, while the fee restricts property rights and freedom of enterprise.

Madise asked Jõelähtme’s municipal council in April to bring the regulation into line with the Constitution, but the council has not changed or repealed the disputed provisions. The council said the fee does not create a direct payment obligation because that obligation arises through an administrative contract. It also cited local planning autonomy and Supreme Court rulings on covering social infrastructure costs.

Madise raises similar objections to Loksa city’s 6,500-euro infrastructure fee. She says developers who refuse to sign an administrative contract setting out the payment terms, or fail to comply with one, may face the end of the planning process, the possible annulment of a plan or the refusal of a building permit. She says the city has no legal basis to impose those consequences through a regulation.

Madise asked Loksa to bring its May 25, 2023 regulation into line with the Constitution. The city said it was preparing a new draft, but the regulation has not been amended. Madise previously challenged a similar fee regulation adopted by Keila city and, in May, raised objections to Tallinn’s regulation on collecting money from developers to fund public facilities.