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POLAND: Amendment of the provisions on the transfer of construction permits

December 23, 2020

The possibility to transfer decisions on construction permits to a third party has been possible since the introduction of the Construction law dated July 7, 1994 (the “Act”). This issue was always regulated by Article 40 of the Construction law, which was amended several times. At first this possibility concerned only construction permits. In 2003 the transfer of permits for resuming construction works, as indicated by Article 51 section 3 (currently Article 51 section 4) of the Act was made possible. In 2015 rights derived from notifications, to which authorities did not object, were also made transferable.

The initial version of the Act already included basic rules for the transfer of construction permits. However, these procedures, ruling the administrative process on construction permits have been specified throughout subsequent amendments.

There were no major doubts that it is only possible to transfer a construction permit after the decision is final. This was a consequence of the legislation technique used in Article 40 of the Act, which provided for the possibility of transferring the decision described in Article 28 of the Act. The latter using the term “final construction permit”. The new wording of the provision, as introduced by the act dated February 13, 2020 on the amendment of the construction law and other acts (“Amendment”) no longer refers to Article 28 of the Act (which since 2015 did not reference to the construction permit being final) introducing in its place the concept of a decision on a construction permit, understood as an administrative decision authorising the commencement and conduct of construction or the performance of construction works other than the construction of a building structure (Article 3 point 12 of the Act). This may raise doubts as to whether, after the Amendment, the finality of the construction permit remains a prerequisite for transferring this decision to a third party. Although literature on the subject has assumed that this prerequisite has so far also resulted from the new investor's acceptance of the conditions resulting from the construction permit – the conditions of the construction permit can only result from the final administrative decisions – the new wording of Article 40 of the Act does not use the expression “acceptance of conditions resulting from the construction permit”. It only requires the new investor to submit a declaration of assumption of the conditions contained in the decision on the construction permit. It is therefore not clear from the current wording of the provision that the conditions resulting from the construction permit must exist on the date of its transfer to a third party. Thus, in my opinion, there are reasonable grounds for assuming that the legislator has opted out of the requirement that only final construction permits may be transferred.

The prerequisite that the new investor submits a statement on the right to use the real property on which the investment covered by the construction permit is to be carried out for construction purposes has not changed.

Before the Amendment entered into force the condition for transferring a construction permit was the previous investor’s permission for the transfer of such decision to a third party. The current wording introduces a significant exception to this principle. The permission of the previous investor is not required should the person to which the construction permit is to be transferred, have acquired ownership right or perpetual usufruct right to the real property from the previous investor after the construction permit was issued. The justification of the Amendment states, that this exception has been introduced due to the existing unfair market practice, where previous investors did not want to approve of the transfer of the construction permit or demanded payment even though they had previously sold the property to which such a construction permit applied. Apart from the justification for the introduction of this change, attention should be paid to a number of important elements which must exist collectively, in order for the new investor to be able to avoid having to enclose the consent of the previous investor with the application for the transfer of the construction permit.

First of all, the new investor is to acquire the real property after the construction permit is issued. Even if the proceedings for issuance of a construction permit, which has not yet been issued, are already pending on the date of sale of the real property, the subsequent transfer of this permit to the buyer of the real property as the new investor shall require obtaining a written consent of the previous investor. However, the construction permit needs not be final at the date of acquisition of the real property.

Secondly, the exception shall only apply to the so called translative acquisition, i.e. where the legal title to the given real property covered by the construction permit is to be transferred to the buyer of the real property from the addressee of the construction permit (for example in the cases of sale, donation or acquisition via enforcement proceedings). Therefore, should the real property be acquired as a result of usucaption (so called primary acquisition), the transfer of a construction permit issued before the acquisition of the real property by the new owner shall require the consent of the previous owner (addressee of the construction permit) for such transfer.

Thirdly, the exception does not apply if the new investor acquires a title to the real property other than ownership or perpetual usufruct right. In particular the consent of the previous addressee of the construction permit for its transfer shall be necessary in the event of acquisition of the right of lease of the real property – which is not uncommon practice.

Finally, the consent to the transfer of the construction permit expressed by its previous addressee is necessary if the owner or perpetual usufructuary who sold the real property is not the addressee of the construction permit at the date of sale. Therefore, the buyer of real property should secure the consent of the addressee of the construction permit when acquiring the ownership right or perpetual usufruct right to real property, which is covered by that permit, from a person other than the addressee of this permit, even if that person is closely related to the seller (i.e. subsidiary, spouse, etc.).

Should there be no need to enclose the consent of the previous investor for the transfer of the construction permit to the application for issuance of the construction permit, the applicant  should prove the existence of prerequisites as specified by Article 40 section 1a of the Act by attaching to the application an excerpt or extract of a notarial deed documenting the acquisition (or another document, such as court ruling on assimilation of ownership), or an excerpt from the land and mortgage register indicating the purchase of the real property from the previous investor.

It remains unchanged that the parties to the proceedings for issuing a decision on transfer of the construction permit are still limited to the previous and new investor.

 

Tomasz Milewski

Radca prawny | Counselor at Law

T: +48 22 447 43 00

E: milewski@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.