A common way of expropriation of real property is the division of a plot of land for a public road. The division may be made if the separated part of the real property was designated for a public road in the zoning plan or, if there is no plan, a decision was made to determine the location of the public road for the separated part of the real property. When plots of land are divided from the real property for the construction of a public road, various formal and legal consequences are involved. Where real property is expropriated this way, the law provides for compensation.
According to Article 98 of the Act on Real Property Management dated August 21, 1997, plots of land divided for public roads from real property, the division of which was made at the owner’s request, are transferred to the State Treasury or a local government unit by virtue of law as at the date on which the decision approving the division became final, or a ruling on the division became final. This also applies to real estate whose division was made at the request of the perpetual usufructuary, but the right of perpetual usufruct of plots of land separated for public roads expires on the date on which the decision approving the division became final or the decision on the division became final.
It is highly significant that the above-described deprivation of the right of ownership and the right of perpetual usufruct by virtue of the law may only occur against compensation, and in accordance with the constitutional principle of admissibility of expropriation, only against fair compensation. The amount of compensation is agreed upon between the owner of the expropriated real property and a competent authority. The subject of the agreement should be the amount, form and date of exercising the right to compensation. The amount of compensation is determined on the basis of the condition of the expropriated real property, but also on the basis of its purpose and value on the day of issuing the decision on expropriation. While determining the value of the real property, it is necessary to consider its type, location, manner of use and current prices on the real property market. In order to determine the appropriate amount of compensation, it is necessary to obtain the opinion of a property valuation expert, who will use professional tools to determine the market value of the expropriated real property. The provisions of the Act on Real Property Management do not regulate in detail the process of determining the amount of compensation. The process of determining the conditions under which the parties concerned are prepared to conclude a satisfactory agreement on the amount of compensation by way of negotiations is entirely up to the parties.
The Supreme Administrative Court, in its judgment dated September 17, 2014 (No I OSK 2102/14), ruled that if the authority does not respond to the request to settle on compensation within a reasonable time or informs about the lack of funds that would allow it to enter into negotiations (arrangements) in a given year, the prerequisite for failure to reach an agreement is fulfilled, which in turn constitutes a prerequisite for the Starosta to initiate proceedings to settle in accordance with the rules and procedures of proceedings for expropriation. A motion to the Starosta to determine the amount of compensation is submitted by the former owner or former perpetual usufructuary.
Compensation is paid in a single payment, within 14 days from the date on which the decision on expropriation is enforceable or the decision on compensation becomes final. In the case of a decision on immediate expropriation, at the request of the expropriated party, an advance payment is made in the amount of 70% of the compensation determined by the body of first instance in the decision on expropriation. The advance payment shall be made in a single payment within 50 days from the date of submission of an application for an advance payment. The amount of compensation for expropriated real property shall be reduced by the amount of the advance payment made.
According to Article 131 of the Act on Real Property Management, as part of compensation, the owner or perpetual usufructuary of an expropriated real property may also be granted, upon his consent, a respective replacement real property. A replacement real property is granted from the stock of real property of the State Treasury if the expropriation is made to the State Treasury, or from the stock of real property of a relevant local government unit if the expropriation is made to that unit.
It is worth noting that a claim for the determination and payment of compensation is not subject to the statute of limitations, unless this has been expressly stated by the legislator in a specific provision. The Supreme Administrative Court in its judgment dated November 20, 2008 (No I OSK 1588/07) clearly stated that since the claim for payment of compensation arose from an administrative relationship, its execution, together with an assessment of all legal effects – including the statute of limitations – should be assessed on the basis of substantive provisions of administrative law. Under administrative law, a claim may only be subject to a statute of limitations if the law clearly states so. With regard to compensation for roads which have become the property of a municipality as a result of a division, there are no regulations which would set any limitation periods.
Marta Pałyga
Aplikantka adwokacka | Trainee Attorney
T: +48 22 447 43 00
E: palyga@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.