The Sejm is working on the final version of regulations concerning, among others, the rules to change the purpose of perpetual usufruct. As a result of the planned amendments, it will be easier for developers to build residential buildings on former industrial areas.

 

Under the Act on an Amendment to the National Property Resources (Krajowy Zasób Nieruchomości) Act and Certain Other Acts, which is being processed by the Sejm, some of the provisions of the Spatial Planning and Development Act and of the Building Law will be amended.

 

According to the new regulations, the incompliance of a building project with the purpose of perpetual usufruct may not form a basis for issuing a decision to refuse to approve a building design and grant a building permit. Therefore, the officials will not have the right to refuse to issue a building permit for a project which is incompliant with the purpose of perpetual usufruct.

 

The above amendment may unblock many construction projects. Currently, cities often refuse to issue a building permit for a residential or commercial project which is incompliant with the original purpose of perpetual usufruct, even if it has long been outdated, even where the project complies with the local land use plan. This particularly applies to projects in the former industrial areas.

 

In the amendment, also the rules of changing the purpose of perpetual usufruct will be determined. Until now, the decisions of the authorities in this regard have been discretionary. It will be possible to reclassify the purpose of perpetual usufruct where a permanent change in the manner of using a property has occurred, resulting in a change of the purpose of perpetual usufruct. An application for a change of the purpose of perpetual usufruct will be filed either by a competent authority or perpetual usufructuary.

 

A perpetual usufructuary will be also entitled to file an application for a change of the purpose of perpetual usufruct of a landed property if the proposed change complies with:

  • the intended purpose of the property determined in the valid local land use plan;
  • the occupancy permit decision for a structure;
  • the notification of a construction or alteration if the architectural and building administration authority does not file an objection;
  • a resolution to determine the location of a housing or accompanying project;
  • the decision on land development conditions.

If the authority or perpetual usufructuary does not agree to the change of the purpose of perpetual usufruct proposed by the other party, the authority or perpetual usufructuary, respectively, will be entitled to bring an action with a common law court.

 

If, as a result of the change of the purpose of perpetual usufruct, the annual fee rate is reduced, the parties to the agreement (authority and perpetual usufructuary) will have the right to determine a one-off fee to be paid to the property owner, not exceeding, however, twice the current annual perpetual usufruct fee. Currently, some cities demand compensation of even up to several dozen percent of the land value in consideration of the change of the purpose of perpetual usufruct (and, consequently, change of the annual fee rate).

 

The aforementioned Act on an Amendment to the National Property Resources Act and Certain Other Acts, as amended by the Senate, will be re-examined by the Sejm at the next meeting (scheduled to take place in the second week of June). The Act will become effective after 30 days of its publication.