Why planning agreements now deserve attention
A planning agreement is a contract between a municipality (or another public-law entity) and a developer on the terms for preparing and carrying out a project — typically the building or financing of public infrastructure, civic amenities, or other commitments tied to the development. The amendment markedly strengthens its role. The substantive changes, including those to planning agreements, are tied to an effective date of 1 July 2026; the organisational reform of the building administration follows on 1 January 2027. Given how the legislative process is still developing, we recommend verifying the current wording before any specific step.
1. A stronger link to planning documentation
The new Section 131(3)(h) allows a developer to undertake to draw up a proposal for planning documentation, or to bear the cost of its procurement. Crucially, under Sections 87 and 109(5), approval of the planning agreement can replace the municipal council's decision to procure a regulatory or zoning plan. For reserved constructions (Section 193(2)), a presumption is also established that the conditions for deviating from the documentation are met. The planning agreement thus becomes a tool that can genuinely speed up the preparation of an area.
2. A joint solution to development requirements
The new Section 131(2)(c) gives a municipality the option to secure a "joint solution to development requirements," to which the developer contributes under Section 131(3)(f). In practice this is a shared model for parking, transport and technical infrastructure, civic amenities and other services where a joint solution makes substantive sense. Several projects in one area can thus be coordinated and the costs shared fairly.
3. A share in economic activity — but with rules
Section 131(3)(g) introduces the option to agree on monetary or in-kind performance as a share in the economic activity associated with the project. This is not a blanket "developer levy." The agreement must define an objectively verifiable indicator and allow the calculation to be checked. Without a transparent and reviewable basis, the performance will not stand — something both municipalities and developers should bear in mind when drafting the agreement.
4. Judicial substitution of a missing municipal consent
The new Section 132(4) allows a developer to seek a court's substitution of the municipality's consent where the proposal meets the conditions of the planning documentation and the municipality fails to respond within a reasonable time. This is a significant safeguard against inaction, moving the planning agreement closer to an enforceable instrument. Municipalities should therefore respond to proposals in good time and duly reason their position.
5. A local referendum only before signing
An addition to Section 132(1) limits a local referendum to the period before the planning agreement is signed. Once it has been concluded, a referendum can decide neither the agreement itself nor its underlying intent. Public debate thus shifts to an early stage — municipalities must obtain residents' views in time, while developers gain certainty that a concluded agreement will not be challenged by a later referendum.
What it means in practice
For developers and investors, the amendment brings greater legal certainty and predictability: a clearer framework for performance, a way to speed up the preparation of an area, and a defence against municipal inaction. For municipalities, it means the need to hold public debate in good time, to set objective and reviewable performance criteria, and to respond to proposals within reasonable deadlines.
Both sides will benefit from drafting the planning agreement with particular care — especially the indicator for the share in economic activity, the scope of any joint solution, and the link to the planning documentation. A well-drafted agreement saves time and disputes; a poorly drafted one is a risk for both parties.
Are you preparing a planning agreement or assessing its impact on your project? Contact our construction and real estate development team.
This article is for information purposes only and does not substitute individual legal advice.
