PL

Investors' most pressing concerns not addressed

The amendment proposed by the government to the draft of the Law on Land Management may be divided into two groups. One specifies and precisely describes the existing provisions, in order to eliminate divergent interpretation and simplify their application, while the other concerns suggestions about new legal regulations which have been found essential

General provisions
The amendment proposes discontinuing the enforcement of an administrative decision in case it is appealed against before the Supreme Administrative Court. It shall be discontinued ex officio in the form of a decision against which there shall be no appeal granted. In the opinion of the authors of that amendment, this change is necessary because of its financial and legal effects on the involved parties, who will be compensated if decisions are dismissed by the court.
Another essential change indicates that it is the voivode who is superior in relation to the chief official of a district (starosta). Ambiguities in this respect have occurred due to the provisions of the Code of Administrative Proceedings. The provisions stipulate that the Local Appeal Board (Samorzadowe Kolegium Odwolawcze) is the superior body in relation to local government units, irrespective of whether they perform their own activities or those sanctioned by the government. Such a body is de facto the chief official of the district. However, due to the specific authorization given to him under the described Law, he is competent for managing The State Treasury real estate, which is a governmental assignment.

Public real estate management
Among the proposed amendments, it is worth highlighting provisions which accurately define the following: the manner in which tenders for the sale of public real estate are executed, the terms of tender procedures and the manner of the sale of real estate following two failed tenders. The method of establishing a starting and transaction price, as well as rendering and claiming the return of price discounts or transferring public real estate for the perpetual usufruct, have also been defined more precisely.
The changes to the competences of the administrative authorities define more accurately the scope of their activity: they may represent public owners (The State Treasury or local government units) in all actions undertaken for the benefit of, and on behalf of, those entities. Nowadays, the representation, referred to in Article 11 of the Law, is interpreted only in relation to real estate belonging to The State Treasury or local government units. Practical experience shows, that there is a requirement to ensure that the property of The State Treasury and local government units should be safeguarded. It also concerns matters connected with such real estate, which has not yet been acquired by those institutions but in which they have a legal interest.
The authors of the draft propose enhancing control over the use of real estate which is transferred in the form of a donation. They want the consent of the voivode, competent council or regional body (sejmik) only to be required in order to discontinue the revocation of the donation, when using the real estate for purposes other than for which it was donated.
The proposed provisions include the possibility of establishing a permanent management board on perpetual usufruct rights (and not only on those of ownership), which will affect the manner of regulating the relationship between an owner, a perpetual usufructer and a permanent administrator. This concerns, in particular, such cases in which the entities, with none of the status of a legal person, have purchased the perpetual usufruct and not ownership rights, on behalf of The State Treasury or local government units.

List of real estate for sale
Within the new provisions, there is the idea of limiting the real estate for sale. At present, such a list is obligatorily prepared by the relevant authority, not only in relation to the sale of real estate but also when it is transferred for usufruct or leased. However, practical experience indicates that the obligation to draw up a list should be limited to agreements to transfer ownership of real estate, agreements to transfer land for perpetual usufruct, as well as agreements for use and lease concluded for longer periods of time (more than 3 years). This list may serve as a guarantor of free access to real estate turnover, only when covering the above types of agreements.

New rules of a real estate division
The purpose of the new rules is to enable the execution of local zoning plans as well as the accomplishment of public projects such as infrastructure investments.
In order to accomplish these aims, the new rules of real estate division will be applied. Provisions enabling the division ex officio of the real estate of unregulated legal status, have been implemented. So far, if in order to execute a public investment it was necessary to purchase part of some real estate, involving a prior division of it, this was not possible where its legal status was not regulated.

Right of pre-emption
The new rules extend the preemption right to all cases where a transaction of the perpetual usufruct right takes place, notwithstanding the form in which this was established. The authors of the amendment propose shortening the time of waiting for the commune's decision concerning the preemption right (instead of 2 months it shall take 1 month. It will be solely the commune administrator, mayor or president of a city who will make a decision concerning the preemption right.

Expropriation of real estate
The draft also includes a new regulation in the field of expropriation of real estate. It shall enable dividing and expropriating real estate under one procedure concerning the division and expropriation of real estate of an unregulated legal status. It also defines the method of establishing and paying damages for the expropriated real estate.

Appraising real estate
The draft includes and specifies the rules concerning the appraisal of real estate by property experts. The definition of a cadastral value has been corrected: it shall be established in the course of common taxation for the real estate included in the cadastre. This measure will adjust the provisions to the regulations included in the provisions on the land and buildings register (the future real estate cadastre), under which the value of all the real estate entered onto the land and building register shall be indicated.
Very important is the rule establishing the period for which the appraisal (cadastral survey) may be used after it has been performed. As a rule, the person ordering the survey needs some time to arrange certain issues related to the real estate, for which the survey was required. On the other hand, the value of the real estate determined in the survey is valid as long as conditions on the real estate market do not change. The lack of this rule caused a cadastral survey, (serving as evidence in the case for which it was prepared), to be rejected for formal reasons. The date of issue appearing in the survey is "quite naturally" sooner than the date on which actions related to the real estate were performed. The proposed change shall eliminate such doubts, which have been raised in the judgments of the Supreme Administrative Court.
Another essential regulation will be the provision concerning the evaluation of prepared surveys. In existing law, this issue has already been resolved, though not completely. At the moment, anyone questioning the surveys must order another evaluation and in the event that a new one proves to be different than the first, the evaluation of two surveys may then be requested. Such a procedure is useless: it prolongs the time of handling the case and incurs additional costs.

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The proposed amendments to the Law on Land Management are not of a revolutionary nature but rather systematize the rules. They include modifications to the administrative structure and accurately define the rules in order to eliminate divergent interpretations. The authors of the amendment have not addressed investors' pressing concerns about the real estate market, as they neither facilitate the access to land, nor regulate the issue of settling infrastructure investments.

Małgorzata Kacperska
The author of this paper is Partner in the law firm Drzewiecki, Tomaszek & Co.

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