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POLAND: New restrictions on the return of real property

March 4, 2021

New restrictions on the return of real property covered by the decree of the National Council on the ownership and use of real property in the area of the Capital City of Warsaw, issued on October 26, 1945 (the so-called Bierut Decree), effective as of October 20, 2020, may lead to a complete suspension of re-privatization processes in the territory of the Capital City of Warsaw.

The amendment to the Act on Real Property Management (Journal of Laws of 2020, item 1709) has significantly expanded the catalog of conditions on the basis of which the authority may refuse to grant the land for perpetual usufruct or to transfer the ownership of the land to the current owners of the land (their legal successors).

The amendment especially concerns Art. 214a of the Act of August 21, 1997 on Real Property Management, according to which from October 20, 2020 in the cases of:

  •  occupancy of the premises by a tenant;
  •  use of real property for the purposes of science, education and culture;
  •  location of the land within a public recreational complex or green areas;
  •  establishment or transfer to third parties of property rights to land, building or part thereof, or making a real property or its part available for use against payment, in particular on the basis of a rental agreement for a residential premises - regardless of the duration of a civil law relationship with a third party;
  •  obstacles causing that the establishment of perpetual usufruct and ownership of a building or other facility would be contrary to the socio-economic purpose of these rights;
  •  the inability to reconcile with the proper shaping of neighborly relations;
  •  intended use or use of real property for public utility purposes;

the authority will refuse to grant the land for perpetual usufruct or to transfer the ownership right to the land to the person entitled under the Bierut Decree.

The above-mentioned cases, which have been added to the ones already in force, are extremely strict, especially that, even the emergence of one of the above-mentioned conditions will constitute the basis for the obligatory issuance by the authority of a decision refusing to grant the land for perpetual usufruct or to transfer the ownership of the land to the rightholder.

The premise of occupancy by a tenant is particularly criticized in the literature and commentaries. It is not difficult to predict a situation in which the authority will be obliged to refuse to grant perpetual usufruct of the land just because only a small part of this land will be occupied by the tenant.

In this case, the legislator clearly placed the obligatory law arising from the contract above the right of ownership (perpetual usufruct).

This solution is incomprehensible due to the fact that the protection of the rights of tenants has been covered by the provisions of a separate legal act, namely the Act of June 21, 2001 on the protection of tenants' rights, housing resources of the commune and amending the Civil Code.

The new regulations have been in force only since October 20, 2020, and the literature and the trade press have already been dominated by comments that very negatively refer to the introduced regulations, accusing them of non-compliance with the Constitution.

It should be noted that the changes described above apply to cases and proceedings initiated and not completed by the date of entry into force of the Act of September 17, 2020.

This means that, even if the procedure was initiated and not completed before the entry into force of the Act of September 17, 2020, the stricter provisions of the Act of September 17, 2020 will apply to the applicant. It means that the authority will be obliged to refuse to return the property in a situation where the conditions provided for in the aforementioned amended Art. 214a of the Act on Real Property Management are met.

The legislator, motivated by the desire to suspend some of the re-privatization proceedings that raised doubts, prevented all applicants, including those whose applications did not raise any doubts, from regaining the land lost under the Bierut Decree.

Michał Matak

Prawnik | Lawyer

T: +48 22 447 43 00

E: matak@millercanfield.com

Tomasz Bielenik

Adwokat, Doradca podatkowy | Attorney at Law, Tax Advisor

T: +48 22 447 43 00

E: bielenik@millercanfield.com 

Disclaimer: This publication has been prepared for clients and professional associates of Miller Canfield, and is based on the facts and guidance available at the time of its release which may be subject to change. The purpose of the publication is to draw attention to the legal events indicated in it and should not be the sole basis for any decision regarding a particular course of action; nor should it be relied on as legal advice or regarded as a substitute for detailed advice in individual cases. The services of a competent professional adviser should be obtained in each instance so that the applicability of the relevant legislation or other legal development to the particular facts can be verified.