Compensation for changes in territory and building closure: How to protect your rights

7.5.2026 | ARROWS law firm

If you own land designated for development and the municipality plans to restrict it through a building ban or an amendment to the zoning plan, you may face complex legal issues regarding your entitlement to compensation. In the Czech Republic, every owner has the right to compensation for pecuniary loss; however, the rules are strict and the risk of limitation applies to anyone who does not realise which deadlines and conditions must be met. This article explains how to protect yourself and why timely legal consultation is crucial.

The photo shows a specialist during a consultation regarding compensation for restrictions on construction.

Article contents

Building moratorium as a spatial planning tool: What happens to your land
When a building moratorium appears: What rights you have
Five-year time limit for an amendment to the zoning plan
Building moratorium vs. Change in the area: Differences in protection
How to defend yourself against a building moratorium: Procedural steps
Practical examples: When owners succeed and when they do not
The new Building Act and what has changed

Quick summary

The new Building Act No. 283/2021 Coll. sets out the conditions for compensation: in the case of an amendment to a zoning plan, there is a right to compensation for a decrease in the value of the land primarily within 5 years from the effective date of the plan that allowed development. However, the duration of a building moratorium suspends the running of this time limit.
Owners may apply for exemptions from a building moratorium (there is no legal entitlement to it, but it may be granted); in practice, however, it is a formally demanding process in which it is necessary to prove that the intended project does not jeopardize the purpose of the moratorium.
When asserting a claim for compensation you must prove specific pecuniary loss by an expert opinion. Preparing an investment project and the costs incurred before the building moratorium was issued are key factors; an owner’s inactivity may lead to the loss of the claim.

Building moratorium as a spatial planning tool: What happens to your land

A building moratorium is a spatial planning tool that a municipality typically issues when it is preparing a new zoning plan or an amendment and wants to prevent construction that could complicate or prevent the future use of the area. Put simply: once a municipality decides to procure an amendment or a new plan, it may issue a building moratorium that temporarily prevents you from building on the land.

This means that if you have a construction project in an area that the municipality is currently “preparing for change”, the building authority cannot issue you a permit if the project would be contrary to the moratorium.

A building moratorium is not unlimited – the new Building Act limits it in Section 128 to the shortest time strictly necessary, but no longer than 6 years (the original time limits were often circumvented). During these years, however, your project may become many times more expensive, financing may fall through, and the investment opportunity may disappear.

The attorneys at ARROWS advokátní kancelář deal with this issue on a daily basis and know how to navigate such situations under Czech law. Compensation for the restriction of ownership rights by a building moratorium is provided for by law, but the process of obtaining it requires a precise approach. In similar situations, it is often crucial to set the right strategy vis-à-vis the municipality and the building authority, which falls within the area of development and construction law.

When a building moratorium appears: What rights you have

The law grants you the right to compensation if a building moratorium has caused you pecuniary loss. Under Section 126 of the new Building Act (No. 283/2021 Coll.), the owner of land or a structure whose rights have been restricted by a measure of a general nature imposing a building moratorium is entitled to compensation for such restriction.

Compensation typically covers specific expenses incurred in preparing the construction that have been wasted as a result of the moratorium, or lost profit if it can be reliably proven. In practice, municipalities often refuse compensation arguing that the moratorium is only temporary. A related issue is how to prevent land from being excluded from developable areas in the first place, discussed in How can you ensure that your property remains within developable areas?. For the owner, however, the decisive factor is whether actual pecuniary loss has arisen and whether they can prove it.

What you must prove for compensation to be recognized

The most common mistake owners make is assuming that the mere existence of a building moratorium means an automatic entitlement to money. That is not the case. You must prove three things: (1) that your ownership rights were restricted (by the building moratorium), (2) that you suffered specific pecuniary loss, and (3) a causal link between the moratorium and the loss incurred.

The most important part of the evidence is an expert opinion, which must quantify the wasted costs or other pecuniary loss. A practical view of who is responsible for what in the preparation and specification of a construction project (and how courts assess it) is also summarized in the article Did the investor give you an incorrect construction brief? Who is responsible for what, and how the court looks at it.. The estimate in the opinion must not include speculative profits from an unrealized project if they have no real basis – it must be based on ascertainable values. Because these claims are typically tied to land use and project documentation, it can be helpful to align the evidence with the broader framework of Development & Construction Law.

The attorneys at ARROWS advokátní kancelář have experience with how these evidentiary proceedings are conducted and can help you prepare documentation that the court will accept. Without experienced legal representation, the chance of full success is significantly lower. In these disputes, properly drafted pre-action notices, the assertion of the claim, and a settlement agreement are often decisive, which is typically handled within the contracts and negotiations practice.

Basic questions about compensation:

1. Will I receive compensation automatically if the municipality issues a building moratorium?
No. You must actively assert the claim and prove specific pecuniary loss. If you had no plans for the land and you suffered no loss, no compensation is due.

2. How long does it take to resolve the claim?
Court proceedings may take 2–4 years, and longer in cases involving more complex evidence. In the meantime, funds remain tied up in land that cannot be fully used.

3. If I obtain an exemption from the building moratorium, do I lose the right to compensation?
If you obtain an exemption and can build, you likely did not suffer loss (or only minimal loss due to delay), so the claim for compensation lapses or is reduced. Conversely, refusal of an exemption strengthens the argument that loss has arisen.

Five-year time limit for an amendment to the zoning plan

This brings us to a key aspect of construction law concerning an amendment to the zoning plan (not merely a temporary building ban). If you are dealing with a zoning plan amendment from an investor’s perspective (e.g., for a PV power plant project or new development), you may also find useful the follow-up analysis Změna územního plánu proti vůli obce (z pohledu investora): Jak povolit FVE nebo stavební pozemek?. Under Section 133 of the new Building Act, the owner is entitled to compensation for a decrease in the value of the land due to the cancellation of its developability, but only if the change occurs within 5 years from the effective date of the zoning plan that originally allowed development.

The key information confirmed by case law, and on which the interpretation of the new act is based, is that the duration of a building ban is not included in this five-year period. This means that the running of the period is suspended for the duration of the building ban. If the municipality issues a building ban one year after your land became developable and the ban lasts three years, after it is lifted you still have four years remaining from the original five-year period.

This rule protects owners against municipalities’ opportunistic conduct, but in practice it requires precise calculation of deadlines. If you miss the deadline due to inaction, compensation for the zoning plan amendment is not enforceable.

When the period is calculated and why it is so important

Under Czech law, the period is calculated from the date the zoning plan (or its amendment) that allowed development of the land became effective. It therefore does not start on the day you purchase the land, but at the moment the land became legally developable under the zoning plan.

If the 5-year period expires, compensation for the cancellation of developability is not available, except for compensation for costs already incurred in preparing the construction. If you purchased land that had already been developable for 4 years, you effectively have only 1 year of the “protective period” for potential compensation for a plan change, provided that no building ban is issued.

The attorneys at ARROWS, a Prague-based law firm, can help you ensure you do not miss the relevant deadline and calculate it correctly.

Building ban vs. Change in the area: Differences in protection

The new Building Act distinguishes between compensation for a temporary restriction (building ban – Section 126) and compensation for a permanent change (zoning plan amendment – Section 133).

Building ban: It is temporary. Compensation is available for the restriction of ownership rights (damage), typically for wasted costs or demonstrable lost profit, or costs of maintaining the land.
Zoning plan amendment: It is permanent. If the municipality “strikes out” your building plot, you are entitled to compensation equal to the difference between the price of developable and non-developable land, but only if the five-year period is met.

In practice, these situations often overlap, which is why it is necessary to argue legally the suspension of deadlines and the interconnection of both instruments. A municipality issues a building ban, prepares a new plan during the ban that reclassifies your land as a non-developable area, and then claims that no compensation is due because time has elapsed.

The attorneys at ARROWS, a Prague-based law firm, know municipalities’ strategies and can defend against them effectively. The matter is highly complex, and handling it without expert assistance is risky.

How to defend against a building ban: Procedural steps

When you learn that a municipality is preparing a building ban, you must act immediately. Inaction is the greatest enemy.

Objections to the draft building ban – the first line of defence

A building ban is issued in the form of a measure of a general nature. The draft must be published on the official notice board. Affected owners have the right to submit written objections (under Section 172 of the Administrative Procedure Code and the Building Act) within 30 days of publication of the draft. If you miss this deadline, you significantly complicate your ability to pursue a later court defence.

Objections must contain specific legal and factual arguments. For example: the scope of the ban is disproportionate, it does not correspond to its purpose, or the ban lasts unreasonably long without the municipality taking steps to prepare the plan.

Questions about objections and their effectiveness:

1. What happens to my objections?
The municipality must address them in the reasoning of the measure of a general nature. The decision on objections serves as a basis for any subsequent judicial review.

2. Can the municipality penalise me for submitting objections?
Legally, no. Exercising your rights is a lawful course of action for any owner.

Application for an exemption – Section 129 of the Building Act

If a building ban has already been issued, the law (now Section 129 of the new Building Act) allows an exemption to be granted. The condition is that granting the exemption will not jeopardise the purpose pursued by the building ban.

The municipal council decides on the exemption, and it is crucial to provide high-quality reasoning as to why your specific project does not hinder the future arrangement of the area. There is no automatic legal entitlement to an exemption; it is a matter of administrative discretion. This is easier to explain when you have an ARROWS attorney behind you, who can argue in line with the zoning and planning documentation.

Judicial review – when everything else fails

Against an issued building ban (a measure of a general nature), it is possible to file a motion to annul the measure of a general nature with the Regional Court. Here, unlawfulness is alleged (procedural errors, disproportionate interference with rights).

An alternative is to submit an initiative for review proceedings to the superior administrative authority, which examines the lawfulness of the municipality’s procedure.

Court proceedings are demanding, but if the ban is annulled, this opens the way to obtaining a building permit or claiming damages. In the past, courts have annulled bans that lasted unreasonably long without a genuine effort by the municipality to adopt a new zoning plan.

Risk table: What you may face and how ARROWS, a Prague-based law firm, can help

Risks and sanctions	How ARROWS helps (office@arws.cz)
Loss of the right to compensation due to missed deadlines: If you do not act in time and miss the statutory deadlines for asserting a claim or filing a lawsuit, the right to compensation expires.	Proactive monitoring of deadlines: We track all deadlines from the very beginning and prepare legal steps so they are taken on time.
Insufficient evidence of pecuniary loss: Courts often dismiss claims because the owner fails to submit relevant evidence of the damage incurred, or the expert report is flawed.	Preparation of robust supporting documentation: We know what an expert report must look like for the court to accept it, and we define the correct instructions for the expert.
Unsuccessful application for an exemption: An application filed without professional knowledge of the local planning context often ends up being rejected with no possibility of remedy.	Representation in negotiations with the municipality: We will prepare watertight arguments for granting an exemption and represent you in dealings with the municipal authorities.
Ineffective court defence: A poorly drafted motion to annul a building moratorium will be rejected by the court due to formal or substantive deficiencies.	Professional conduct of the dispute: ARROWS experts will prepare a motion that meets all requirements and represent you throughout the proceedings before the Czech administrative courts.

Practical examples: When owners succeed and when they do not

Case 1: A successful owner with a prepared project

The landowner had project documentation prepared and had applied for a zoning decision. The municipality subsequently declared a building moratorium. The owner defended himself immediately, filed objections, and then asserted a claim for damages for the frustrated investment and financing costs. Thanks to proving an advanced stage of preparation and a direct causal link, the court awarded compensation in the millions of Czech crowns.

Case 2: A passive owner

Another owner bought a plot of land but took no steps toward construction for 4 years. The municipality issued an amendment to the zoning plan designating the land as public greenery (after 5 years had elapsed from the original plan). The owner started litigation seeking compensation for the decrease in the value of the land. The court dismissed the claim on the grounds that the five-year time limit under the Building Act had expired and the owner had not exercised the right to build in time.

The new Building Act and what has changed

The new Building Act No. 283/2021 Coll. (fully effective from 1 July 2024 throughout the Czech Republic) brought clarification of the rules. The Act now defines compensation claims more clearly in Sections 126 and 133.

At the same time, it limits the maximum duration of a building moratorium. It cannot last forever—the law sets limits, preventing municipalities from blocking construction indefinitely without compensation. This strengthens the position of owners, who can now defend themselves more effectively against administrative inaction.

Key questions:

1. Does the new Building Act apply to older building moratoria?
Under the transitional provisions, older zoning-planning documentation and measures of a general nature are assessed specifically; however, the new procedural rules for asserting compensation are governed by the current legislation.

2. Has the method of calculating compensation changed?
The principles of damages remain linked to the Civil Code, but the new Building Act specifies more precisely the legal grounds from which compensation arises (for a change in the area vs. for a moratorium).

Once you decide to act: Steps you must take

Obtain the text of the building moratorium. You can find it on the municipality’s official notice board or in its archive. Determine the exact scope of the restrictions.
Analyse the land’s history. Find out when the zoning plan that designated the land for development became effective. The key five-year time limit is calculated from this date.
Initiate negotiations with the municipality. Try to negotiate an exemption or an amicable solution.
Engage a lawyer. Czech construction law is full of procedural traps. You need a specialist. The attorneys of ARROWS, a Prague-based law firm, represent developers, companies, and municipalities, so they know the arguments on both sides.
Gather evidence. Invoices for the project, contracts, correspondence with authorities, photographs. Everything will be crucial in court.

Conclusion

A building moratorium and a change to the zoning plan require an active defence. Owners are entitled to compensation, but only if they act in time and in a qualified manner. The five-year time limit for compensation for a plan change is unforgiving, but a building moratorium may suspend it. The key to success is a high-quality legal analysis and flawless procedural steps.

If you own land affected by a building moratorium or a change to the zoning plan, do not hesitate—contact ARROWS, a Prague-based law firm, at office@arws.cz and we will help you assess your rights.

Most common legal questions:

1. How long does court proceedings for compensation take?
Administrative court proceedings or a civil damages dispute may take 2–3 years at first instance. With an appeal, the timeframe is longer. That is why we prefer negotiations and an out-of-court settlement where possible.

2. Can I claim compensation if I bought the land already subject to a building moratorium?
If you bought the land knowing about the existing restriction (moratorium), claiming damages is problematic, as it is assumed that the purchase price already reflected the restriction (you bought it cheaper). In such a case, the chances of success are low.

3. Is there a “quick solution” outside of court?
Yes—negotiating with the municipality for an exemption or for the municipality to purchase the land. ARROWS attorneys in Prague can lead negotiations with the municipal leadership and seek a compromise acceptable to both sides.

4. What should I do if the municipality refuses to communicate?
In that case, it is necessary to file a lawsuit (either to annul the measure of a general nature, or for compensation). Write to office@arws.cz for an assessment of your prospects.

5. What documents do I need for the first consultation?
Ideally: (a) title deed extract, (b) the decision on the building moratorium (or a link to it), (c) the zoning plan history (when the land became buildable), (d) evidence of your investments to date in preparing the construction.

6. Is it worth handling the matter on your own?
In Czech construction law, usually not. Procedural mistakes (e.g., missing the deadline for objections) are often irreversible. A specialised attorney will save you time and money by choosing the right strategy from the outset.

Notice: The information contained in this article is of a general informational nature only and is intended to provide basic guidance on the topic based on the legal framework as of 2026. Although we strive for maximum accuracy, legal regulations and their interpretation evolve over time. We are ARROWS advokátní kancelář, an entity registered with the Czech Bar Association (our supervisory authority), and for maximum client protection we maintain professional liability insurance with a limit of CZK 400,000,000. To verify the current wording of the regulations and their application to your specific situation, it is necessary to contact ARROWS advokátní kancelář directly (office@arws.cz). We accept no liability for any damages arising from the independent use of the information in this article without prior individual legal consultation.

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