Lebanon’s post-war governments and the 1992 administration in particular embarked on a campaign to deal with war violations, including the occupation of public and private properties. These policies eventually led to the removal of ‘roadblocks’, the disbanding of many militias that solicited protection money and the closure of illegal ports.

Notably, a law governing the settlement of building discrepancies was issued, but successive governments were unable to implement the legislation that aimed to resolve the occupation of public seaside and riverside properties. The 1996 Hariri government, as well as the Hoss administration in 1999, suggested measures to resolve the discrepancies, but both failed to achieve the necessary parliamentary support for their plans.

The current government has once again prepared a proposal which is presently under study by a ministerial committee. The issue of settling building discrepancies regularly crops up in parliamentary budget debate sessions, underscoring its importance and the need to find an adequate solution. Faced with high public debt, the government has made reform its top priority and has implemented legislation to ensure greater revenues from tax collection. However, the settlement of building discrepancies on public seaside properties remains unresolved and the majority of revenues in that regard remains uncollected.

Value Disputes

These seaside properties, which are legally used and occupied, only pay small amounts in comparison to the size of the property and the revenue realized. In the event that a law is to be issued, a study of the current situation and the size of settlement sums is in order. Some say revenues would not exceed tens of billions of Lebanese pounds, while others are certain that revenues would amount to much larger sums, estimated to reach $10 - $40 billion, significantly reducing public debt. Where does the truth lie?

Legal Framework

Decree No.144-S (1925)
This law identifies public properties, including seaside properties, their borders and how they should be utilized, and was issued on June 10, 1925 by General Serai, the legal representative of the French Republic to Syria, Greater Lebanon, the Alawite nations and ‘Jabal al Druze’. Although it was issued 75 years ago, it is still valid today. The law states that those properties cannot be sold or acquired with time and include areas reaching as far as the winter tide range and extending to sand and pebbled shores. The federal government and municipalities are entitled to issue temporary licenses to utilize those properties for up to one year, retaining the right to re-evaluate and determine whether a license should be renewed or revoked (given that rental fees are specified).

Decree No. 4810 (1966)
The organization of the utilization of seaside properties is set by this decree, dated June 24,1966. It carries a number of basic clauses related to the protection of the public seaside properties, such as:

• The properties should remain accessible to the public and no one shall possess the right to take advantage of the property through closure for personal interests, except in exceptional cases whereby the project is a public one, that holds touristic and industrial benefits.

• The establishment of any permanent project is not permissible, except in cases that relate to sports and organizational equipment, given that the average surface investment for the equipment does not exceed 5%, and the building doesn’t exceed 6 meters from the height of the seaside property, with an investment ratio of 0.075%.

• Anyone applying for a license should be an owner of a property adjacent to the one in question. The property intended for use cannot exceed double the area of the property adjacent to it and the facade of the new property cannot exceed the area of the adjacent facade.

Decree No. 2522 (1992)
This decree, issued on July 15, 1992, cancels the first clause of Decree No.12841 dated May 25, 1963. It specifies new fees for issued licenses and divides properties into 30 different districts with new value estimates for each.

Annual fees range from LL10,000 per sq. m. (from the north of Lebanon to the northern boundaries of the Minieh real estate area) up to LL1,250 million (from the northern line of the Normandy dump to the southern quarter of the Abella hotel in Jnah). In setting the annual fees, the following rule was applied:
Fees = occupied area x price/sq.m. x 0.50 (or 0.75, 0.1, 2% depending on the type of construction).
The decree also states that utilization of water surface areas is not subject to fees, provided that the property in use rests at the same level. Fees will apply in certain cases, such as the anchoring of boats and yachts in certain areas that forbid citizens access to those sites.

Status of Occupancies

Current occupancies are spread out as follows:

• Legal occupancy of seaside properties based on decree laws.
• Occupancy of properties without licenses and in contradiction to laws and regulations. Some of these satisfy the conditions stated in Decree No.4810 and are flexible, while others contradict them and can’t be modified.


Legal Occupancies


The area of public seaside properties occupied legally and estimated at 870,000 square meters (occupied by 94 companies and private institutions or persons) is distributed over various districts and mohafazas as shown in Table 1.
 

Occupancy by District

Seaside Occupancies from 1990-2001

Based on the decrees stated and in the absence of any new law organizing property occupancy, consecutive post-war governments (especially since 1990) issued many permits. Consequently, licensed areas from 1990 - 2001 spanned a total of approximately 436,601 sq. m. of land and 296,019 sq. m. of water surface.

Legal Occupancy Fees

In reference to Decree No.2522/92 detailing occupancy fees, annual estimates add up to approximately LL3 billion. Therefore, the fee on 2,000 sq. m. of property in the area of Jnah, for example, to be used as a tourist resort, would be estimated at 2,000 sq. m. x LL 1,250 million x 0.75, equalling LL 18.7 million. The current price of this land, according to government estimates is LL 2.5 billion, meaning that the fee of LL18.7 million represents an annual interest rate of 0.78% of the value of the utilized land.

For this reason, the decree is not considered a sufficient and just base to designate occupancy fees, as it deprives the government of a great deal of revenue. The percentage of occupancy fees should be no less than 6% (the lowest lawful percentage), meaning that revenue from 2000 sq. m. in Jnah, for example, should bring in LL 150 million, instead of LL 18.7 million. Applying this percentage should increase occupancy fees from LL 3 billion to LL 25 - LL 30 billion.

Illegal Occupancies


The government has cancelled all procedures and decisions that permit the occupancy of public seaside properties. Clause No.30 of the 1990 budget law considers them totally cancelled and prohibits any official attempt to make any legal adjustments on all actions that took place in contradiction to laws and regulations, mainly the following:

• Sales contracts or options to sell or lease (in contradiction to the specified laws and regulations already in effect or executed).
• Occupancy of public seaside properties without the available decrees allowing it. The occupant has no right to claim the property, irrespective of the duration of the occupancy.
• Temporary occupancy of public properties or municipality properties, and investing in them in contradiction to regulations, even if it is based on a permit from the concerned reference.

Type of Violations

• Cases in which those committing the violation own real estate adjacent to the seaside property and fulfill all the legal conditions (size of occupancy with respect to area of real estate and the length of the seaside facade); or in cases of ownership of real estate adjacent to the property, but not fulfilling the specified conditions; or in cases of construction of fixed buildings, such as restaurants or chalets.

• Cases in which the occupier does not own adjacent real estate. These violations carry a special status should the owner demand the right to occupy the land.

Number and Area of Violations

There are 1,269 violations on seaside properties, occupying a total area of 3,242,032 sq. m., distributed as shown in Table 2. In addition, there are the following occupancies:

• Municipalities: 712,240 sq. m.
• Fishing ports: 372,076 sq. m.
• Public institutions: 2,651,380 sq. m.

Even if these are issued licenses, they have to pay a symbolic fee of LL 1,000 annually.

Illegal Occupancy Fees

In the absence of settlement laws, Decree No.2522/92 stipulates occupancy fees according to the area and purpose of utilization. If this decree is applied to illegal occupancies, annual fees would amount to LL 9,464 million. Also, if the year of the decree’s issue is adopted as a starting date for revenue collection, the total from 1992 until the end of 2001 would reach LL 104 billion. As for the very large projected settlement sums to be received in the form of either annual usage fees or settlement sums, they are based on the fact that the area of illegal occupancy can reach 5 million sq. m. with an average price per meter of no less than $1000 and a rent fee ranging between 6% - 10% annually ($300 million - $500 million per year).