ESA orders Norway to recover purchase price from a property developer
The EFTA Surveillance Authority (ESA) has concluded that the Norwegian municipality of Lørenskog’s failure to enforce its contractual claim for payment under a 2014 property sale to Masserud Utvikling AS constitutes unlawful State aid under the EEA Agreement.
Masserud Utvikling, a real estate developer, purchased land from Lørenskog municipality in 2014 for residential housing and infrastructure development. The property was transferred in August 2015, with payment contractually due on 6 June 2017, shortly after a temporary use permit was granted. The municipality did not issue an invoice or pursue payment until 2021, when it realized the amount remained unpaid. Masserud Utvikling claimed the debt was time-barred under the Norwegian Limitation Act’s three-year prescription period.
Lørenskog municipality filed a complaint with ESA in August 2022, arguing that the non-payment amounted to unlawful aid. ESA opened a formal investigation in December 2023 (Case 89161), finding preliminary evidence that the municipality’s failure to collect payment effectively appears to fulfil all the criteria in Article 61(1) of the EEA Agreement and therefore constitutes State aid.
ESA emphasized that national limitation periods do not override EEA State aid rules, which allow recovery of unlawful aid within a ten-year period. Furthermore, ESA pointed out that State aid may arise not only from active grants but also from omissions by public authorities.
Following the investigation, ESA has formally concluded that the measure entails unlawful State aid incompatible with the EEA Agreement. Norway is now required to take all necessary steps to recover the aid. A non-confidential version of ESA’s decision will be published shortly.
For more information, see ESA’s PR.