BALANCING PROPERTY RIGHTS AND REGULATORY INTERVENTIONS: ANALYZING EXCESSIVE BUT LAWFUL REGULATIONS UNDER THE FDRE CONSTITUTION: LESSON AND PERSPECTIVE

Abstract

Despite the constitutional protection of property rights, the FDRE Constitution permits two forms of property intrusion under Article 40 (1 and 8): police power and expropriation (eminent domain) respectively. While expropriation involves the taking of private property on
account of a public purpose and against payment of adequate compensation, the police power allows the government to deprive property rights without compensation. However, the implications of such uncompensated limits through the state's police power should not be overlooked, especially when these regulations go beyond and substantially diminish the value or use of private property without outright expropriation. Without pretending to be a full comparative overview, the paper aims to assess other countries' experience in balancing property rights protection and excessive regulation and draw a lesson. Accordingly, the paper finds that: while some States employ an ‘invalidation’ approach, challenging the constitutionality of excessive regulations and deeming them non-compensable, others opt to “judicially transform” such regulations into “regulatory taking” or explicitly recognize it as
“indirect or constructive expropriation,” making it compensable under the Constitution. Coming to the FDRE Constitution, arguably, excessive but otherwise regulation cannot be justified in either the police power or expropriation clause, rendering them noncompensable. In such cases, 'invalidation' becomes the likely outcome for such regulations. However, invalidation may not always be a practical option for regulations enacted for the public good. Further, the paper contends that while holding onto hope, neither judicial transformation nor explicit recognition of such regulation as regulatory taking appears feasible within the current constitutional context. Instead, the paper suggests the explicit recognition of regulatory taking through specific laws (excessive regulatory laws), which safeguard property rights while aligning with broader regulatory objectives.