Wednesday, September 2, 2015

Dutch Court Rules that Homeowners are Entitled to Compensation for Lost Real Estate Value in Earthquake Zone

On August 26, 2015, the Dutch District Court of Assen ruled that an oil and gas company operating in the Groningen area must give compensation to several homeowners in said area for the decline in their real estate values. The District Court opined that it is likely that gas extraction in the Groningen area is linked to recent earthquakes.

According to media reports, so as to be entitled to compensation, the District Court stated that “homeowners need not show that their property had suffered any physical damage, only that its value had been affected by its location in the quake area. It also found that homeowners could request compensation immediately, rather than waiting for a sale.”

The lawsuit was filed by the Dutch Foundation Waardevermindering door Aardbevingen Groningen (the Foundation Depreciation through Earthquakes Groningen) against the Dutch Natural Gas Company Nederlandse Aardolie Maatschappij (NAM). The Foundation represents 900 homeowners and 12 housing cooperatives.

In June 2015, the Dutch Government released a technical addendum providing an analysis as to subsidence, induced earthquakes, and seismic hazard in the Groningen Field. The addendum stated that the number of seismic events appears to have increased with cumulative production. 

Written by Chloe Marie - Research Fellow

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