What is Ecrimisil?

Compensation for Unlawful Use of Property: Concept, Process, Calculation, Appeal and Litigation Strategies in the Context of Administrative Law

Summary :

Ecrimisil ( compensation for unauthorized use of property) is an administrative claim, not a penalty , arising from the unauthorized and/or uncontractual use of Treasury and other public properties . The process follows a chain of determination – assessment – accrual – notification – objection/settlement – collection. Calculation is based on the type of use, area, duration, and comparable rental data. The generally accepted principle is that it can be claimed retroactively for a maximum of 5 years . Payment of ecrimisil does not create ownership or rental rights ; it does not prevent eviction. Administrative objection and/or cancellation lawsuit within 60 days of notification are critically important. The defense should focus on errors in square footage, duration, type of use, and comparable data; if necessary, settlement and installment payment options should be considered.

Concept and Legal Basis

Ecrimisil is compensation for unauthorized (non-contractual) use of public real estate , determined and levied by the administration . In administrative law, it appears as part of the "management of Treasury real estate" regime and is generally based on the following mechanisms:

Law No. 2886 on State Procurement and the management-eviction of immovable properties,
Law No. 4706 and the rules regarding the valuation of Treasury real estate,
Regulation on the Administration of Treasury Immovable Properties and General Circulars of the National Real Estate Administration (secondary legislation detailing the principles of determination, assessment and settlement regarding compensation for unauthorized use of property),
In terms of collection, Law No. 6183 on the Procedure for the Collection of Public Receivables.

This normative framework subjects the claim for compensation for unauthorized use of property to administrative procedures, both the determination/assessment phases and the collection phase. Thus, the creation of the claim is governed by an administrative process, while its collection is carried out under the public receivables regime.

The Legal Nature of Ecrimisil: Not a Criminal Case, but Compensation for Unlawful Occupation

Ecrimisil is not an administrative fine ; it is a public receivable in the form of compensation for unlawful occupation . This distinction is crucial in many areas, including statute of limitations, calculation principles, whether fault is considered , whether VAT is applied , and judicial remedies

No fault is required: It is sufficient that the occupation is unlawful; the good faith-bad faith debate may affect the amount and timing, but it does not prevent the debt from arising.
VAT: Usufruct fee is not rental fee but administrative receivable ; therefore, VAT is not calculated on it in practice .
It is not punitive in nature: the aim is compensation , that is, receiving payment for the use of public property .

Scope: Treasury, Municipalities and Other Public Administrations

Compensation for unauthorized use of property is most commonly encountered in relation to Treasury-owned real estate . In addition to this:

In cases of unlawful use of immovable properties belonging to municipalities and provincial special administrations, claims for compensation may arise. In municipalities , an occupation fee ("occupancy fee") may also be applicable under Law No. 2464 on Municipal Revenues . The concepts of compensation for unlawful use of property and occupation fee are distinct; one is compensation , the other is a fee .
Areas under the control and ownership of the state (coasts, shoreline, piers and reclaimed lands, etc.) are subject to a special regime; unauthorized use may result in administrative sanctions such as eviction and demolition , in addition to compensation for unauthorized use

Process Steps: Identification → Assessment → Calculation → Notification → Appeal/Settlement → Collection

The compensation process is documented and proceeds in stages. Each link provides procedural legitimacy for the next stage

Determination (Documentation of the Actual Situation)
- The location, size, duration, and purpose of the occupation are documented using records , sketches , photographs , and, if available , satellite imagery
- The square footage, type of use (commercial, industrial, storage, agriculture, residential, etc.), and duration are determined at this stage.
Appreciation (Evaluation)
- The relevant compensation commission determines the amount based on comparable rental rates and market value data
- If comparable data is unavailable, a reasonable rental price will be determined based on criteria such as the property's location, accessibility, demand, usage type, and return potential
Assessment (Preparation of Notification)
- The amount of compensation for unauthorized use of property is calculated periodically (usually annually) and prepared for notification to the debtor via a formal notice
- The notice includes the property's identity , duration of occupation , grounds for the calculation , amount , and methods of application/objection
Notification
- Law No. 7201 on Notifications and its secondary legislation.
- Notification of deadlines (objections, lawsuits).
Objection / Compromise
- Within the timeframe determined by administrative legislation following the notification, internal administrative appeals or settlements may be pursued.
- A settlement discounts and installment payment options; the settlement agreement is often final .
Collection
- The finalized compensation for unauthorized use of property will be pursued and collected in accordance with the provisions of Law No. 6183 .
- If payment is not made of assets, request for collateral, and interest/late payment penalties may be initiated.

Calculation Methods: Comparative Analysis, Intended Use, Area, and Duration

The mathematics of compensation for unauthorized use of property depends on the sound establishment of the following variables:

Type of Use: Distinctions such as commercial (restaurant, cafeteria, market, parking lot), industrial (workshop, warehouse), agricultural (planting-harvesting, greenhouse), and residential directly affect the return potential
Area (m²) and Physical Characteristics: Corner plot, road frontage, coastal location, central location, and advantages in zoning, transportation, and infrastructure increase the comparable value
Duration (Period/Segment):
Requests are generally an annual basis; if there are different usage intensities throughout the year, proportional calculation is important.
Comparable Rental and Market Value Data: This is the most critical element. The actual rental prices that could be obtained from similar properties in the vicinity with similar uses are taken into consideration
Alternative Approaches (If No Precedents Available):
In some cases, revenue-turnover-focused approaches, per-square-meter prices, valuation reports , and expert opinions come into play.

Application Note: The currency and comparability of comparable data should be questioned. Different zoning regulations, different functions, and different accessibility levels (e.g., main artery vs. secondary road) may necessitate the use of comparable data or require a correction factor .

Statute of Limitations, Interest and Collection

Retroactive Period: In administrative practice, compensation for unauthorized use of property can be claimed retroactively for a maximum of 5 years . This period is the accepted limit for the time limitation of public receivables
Interest/Late Payment Penalty: Late payment penalties will be applied to unpaid amounts after accrual and notification, in accordance with Law No. 6183 .
Installment/Deferment: Facilitative mechanisms for debt collection are available; a payment plan can often be agreed upon through settlement .

Eviction, the Possibility of Converting into a Lease Agreement, and the Impact of Compensation for Unlawful Use of Property

Payment Does Not Prevent Eviction: Payment of compensation for unauthorized use of property does not create ownership or rental rights ; the administration may still request eviction
Conversion to Lease Agreement: If the administration deems it appropriate, a tender process ; the period of compensation for unauthorized use an alternative .
Licenses and Permits: A permit obtained from the municipality/another administration does not grant the right to dispose of Treasury real estate ; the explicit consent of the property owner is required.

Appeal, Conciliation, and Litigation Roadmap in Administrative Courts

1) Internal Administrative Appeal

Deadline: There is a short period stipulated in the legislation from the date of notification ; it should not be missed.
Scope: Allegations include errors in square meter/duration/usage, irregularities in the selection of comparables, duplication, and legal violations related to authority, reason, and subject matter
Result: The appeal correction or full confirmation.

2) Compromise

When? Parallel to, or before/after, the appeal, within the framework permitted by law.
What are the benefits? Discounts on the amount , installment options , and sometimes a reduced risk of litigation .
Note: In most cases, a settlement agreement final ; filing an appeal for annulment may be limited.

3) Annulment Case in Administrative Courts

Time limit: 60 days from the date of notification or notification of the outcome of the appeal (general time limit for annulment proceedings).
Subject: Notice/assessment of compensation for unauthorized use of property and, if applicable, rejection of any objections .
Suspension of Enforcement: To reduce collection pressure serious legal violation and irreparable harm must be substantiated.
Evidence: Expert opinion, comparable rental lists, map/sketch, satellite imagery, inspection reports, municipal/zoning correspondence.

4) Full Judgment (Restitution-Compensation)

If irregular/inconsistent compensation for unauthorized use of property has been collected, a full judicial review lawsuit demanding a refund may be filed.

Specific Issues and Fine Points in Implementation

Coastal-Shoreline-Pier Uses
- At the intersection of public order and environmental law, the business-pier-location high compensation payments.
- Coastal boundary demarcation and land reclamation area documents are the focus of the discussion.
Agricultural Use and Yield Basis
- In agricultural activities, sometimes yield/profitability- focused approaches are applied; crop patterns, irrigation possibilities, and agricultural subsidies may be taken into consideration.
Existence of License (Municipality – Business Opening License)
- A license from another administration does not negate the Treasury's right to dispose of the property ; however, it may provide a means of defense in good faith and administrative knowledge disputes regarding a reduction in the fee or the commencement of a new period .
Duplication and Period Overlaps
- Multiple land use fee claims or overlapping claims from different administrations for the same area during the same period create a risk of duplicate collection .
Square Meter and Function Errors
- The most common problem: measurement and classification errors.
- The distinction between warehouse, store, and open area, as well as indoor to outdoor usage, significantly alters the price.
Shared-Common Areas
- If the property is jointly owned by the Treasury or a combination of public and private ownership, the authority to dispose of the and who is entitled to claim compensation for unauthorized use must be clarified.
Administrative Passivity and Legitimate Expectation
- Prolonged silence may give rise to a legitimate claim for compensation; however, the general trend does not negate the existence of a claim for indemnification ; it may have an effect in terms of amount and period .

Defense Strategies

Quick Review:

Notification date: Were the deadlines calculated correctly?
Authorized authority: Treasury or municipality; was the transaction carried out by the competent authority?
Property identification: Parcel number, coordinates, coastline, zoning status.
Square meters: Distinction between indoor and outdoor areas, overlapping measurements, comparison of old and new satellite images.
Type of use: Is the distinction between warehouse/production/store/parking lot/agriculture accurate?
Duration: Actual usage start-end; interruptions, seasonal closures.
Similar data : Is it up-to-date in the same function – in a nearby location ?
Duplication: Are there other receivables for a similar period and similar field?
Administrative knowledge/authorization evidence: Correspondence, licenses, past commitments.

Objection/Case Argument Set:

The precedent is not suitable: Differences in function/location/zoning → exorbitant price increase.
Measurement errors: square meter discrepancy, incorrect layout, separation of upper-lower/terrace-ramp-setback allowances.
Time error: Seasonal use was assumed to be 12 months, ignoring periods when operations were suspended.
Cumulative error: Errors in area, function, and time → combined reduction request.
Good faith and management knowledge : No reduction in price and no retroactive start date for the period
Procedural error: Error in notification/address; incorrect designation of the appeals authority; lack of justification.

Settlement – Payment Plan:

a target rate (after benchmark revision + area/time reduction).
installment and collateral options.
Clarify the impact of the settlement agreement on legal proceedings with your client

Compensation for Unlawful Use of Property through Scenarios

Scenario 1: Cafe Terrace on the Seashore

Condition: Table and chairs on a platform located within the coastline.
Risk: Coastal regime + high precedents.
Defense: The actual square footage of the area , the platform's public access , and the seasonal usage period are detailed; similar coastal units are listed; the irreparable harm (cessation of activity) required for a stay of execution is demonstrated; and a periodic/monthly payment plan is targeted for settlement

Scenario 2: Agricultural Activity—Open Space Encroachment

Status: Seasonal cultivation on treasury land.
Risk: Revenue-based approach.
Defense: Crop pattern, yield-market conditions, force majeure events such as drought/flood ; short season ; request for a reduction based on comparable agricultural rent data .

Scenario 3: Warehouse Usage—Industrial Zone Periphery

Condition: Open storage area at the rear of the plot.
Risk: The function a store and an enclosed space .
Defense: Open area as seen in satellite and photographic evidence ; accessibility vulnerability; correction factor due to the comparable location being a main artery store .

Scenario 4: Licensed Business but Unauthorized Use

Status: Has a municipal permit; no contract with the Treasury.
Risk: Compensation for unauthorized use of property + eviction.
Defense: The license is a gesture of good faith ; the activity was carried out with the knowledge of the administration ; a reasonable price is requested considering precedents and the period ; settlement is possible .

Frequently Asked Questions (FAQ)

What is ecrimisil? It is an administrative claim in the form of compensation for unauthorized/contractual use of immovable properties belonging to the Treasury or other public administrations .

Is compensation for unlawful use of public property a criminal offense? No. It is compensatory in nature ; its purpose is to obtain compensation for unjustly benefiting from public property .

How many years retrospectively can be claimed? In practice, the rule is to claim compensation for unauthorized use of property for up to 5 years retrospectively .

Is VAT applicable? It is generally accepted that compensation for unauthorized use of property is not subject to VAT ; because it is an administrative receivable , not a rental fee .

Will paying the compensation for unauthorized use of property stop the eviction?
No. Payment does not prevent eviction and any ownership/rental rights .

What are the appeal and litigation periods? For internal administrative appeals after notification , the short period specified in the legislation applies ; for annulment lawsuits , generally 60 days should be considered.

Is a compromise possible?
Yes. A compromise discounts, installments , and collateral . The written agreement often a definitive outcome.

What determines comparable rent? Function, location, accessibility, zoning status , rents for similar properties in the vicinity , and market rates .

Conclusion and Recommendations

Compensation for unlawful use of property requires a high degree of technical attention due to its administrative nature, its character as a compensation , its calculation methodology based on precedents/data , and its short application-litigation regime . The key to success lies in correctly establishing the square meter-time-function triad, selecting the appropriate precedent , and utilizing procedural safeguards (notification, objection, suspension of execution) at the right time . Depending on the nature of the dispute , the option of settlement often offers a rational solution in terms of risk-cost-cash flow balance .

compensation for unlawful use of property, Administrative Law, administrative receivables

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