On April 5, the Sejm received a government draft amendment to the Real Estate Management Act and some other acts. The project includes, among others: the right to acquire ownership of land used for purposes other than housing by its perpetual usufructuary.
The draft is the next stage of changes in the legislation, which are to lead to the elimination of perpetual usufruct from the Polish legal order. Previously, the Act of 20 July 2018 on the transformation of the right of perpetual usufruct of built-up land for housing purposes into the right of ownership of this land was adopted, which by operation of law transformed the perpetual usufruct of land built for housing purposes into the right of ownership. This time, the changes are to concern land intended for purposes other than housing and to cover a wider range of entities, including entrepreneurs.
Land acquisition claim
Contrary to the previous act of 20 July 2018, perpetual usufruct of land other than for housing purposes will not be transformed into ownership by virtue of the act. The liquidation of the right of perpetual usufruct is to take place through the sale of real estate to its perpetual usufructuaries. The amendment assumes that the perpetual usufructuary of a land property may demand that the property be sold to him. The perpetual usufructuary will therefore be entitled to a claim for the acquisition of real estate, which he may use at his own discretion. It is important that the use of the claim will be limited to 12 months from the date of entry into force of the new regulations. The authority cannot oppose the request and will be obliged to conclude a sales contract.
A sales request is not entitled to, among others:
• if the property was handed over for perpetual usufruct after December 31, 1997;
• if the perpetual usufructuary has failed to fulfill the obligation specified in the agreement on transferring the land property for perpetual usufruct;
• in relation to land located in ports and harbors within the meaning of the Act of 20 December 1996 on ports and harbors;
• in relation to undeveloped land.
The real estate sale agreement will not be concluded if the proceedings for termination of the agreement for perpetual usufruct of the real estate are pending.
Selling price
The real estate is to be purchased for the price, the calculation rules of which have been specified separately for real estate owned by the State Treasury and local government units.
With regard to the first category of real estate, the price is to be set as 20 times (in the case of a one-off payment) or 25 times (in the case of spreading the price into installments) the amount being the product of the current percentage rate of the annual fee for perpetual usufruct and the value of the land property specified as at the date of conclusion of the sales contract.
With regard to real estate owned by local government units, the conditions of sale will be determined by the councils or assemblies by way of a resolution, or they will oblige the executive body to define these conditions individually. The price of real estate of local government units may not be higher than the value of land real estate. Councils and assemblies will be obliged to adopt resolutions within 4 months of the entry into force of the amendment, and if they fail to do so within the specified time, the rules applicable to real estate of the State Treasury will be applied to determine the price of real estate of local government units.
Sales and public aid
The sale of real estate to perpetual usufructuaries will take place taking into account the provisions on state aid applicable to entrepreneurs. Perpetual usufructuaries who are entrepreneurs should precede the decision to purchase real estate with an analysis indicating whether the acquisition will take place within the regime of state aid regulations or outside it. Not wanting to expose themselves to the consequences of exceeding the permitted limits of public aid, the entrepreneur should take into account, in particular, factors such as the sale price and value of the property, as well as the amounts used so far from public funds.
The amendment to the Act is to enter into force within 30 days from the date of publication. The draft was sent for the first reading in the Sejm committees.
Anna Czajkowska | Radca prawny / Counselor at law | T: 48 22 447 43 00 | E: czajkowska@millercanfield.com
Disclaimer: This publication has been prepared for clients and professional associates of Miller Canfield. It is intended to provide only a summary of certain recent legal developments of selected areas of law. For this reason the information contained in this publication should not form the basis of any decision as to 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.