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NO OBLIGATION TO ACQUIRE ENTIRE LAND BY INVESTOR OF CONSTRUCTION PROJECT

By its judgement of 19 November 2013 in case no. II
OSK 2180/12, the Supreme Administrative Court
held that it is contrary to the provisions of the
Building Law of 7 July 1994 (Journal of Laws of
1994 no. 89 item 414, as amended) to require that an
investor acquire the entire land on which the
proposed property development project is to take
place. Consequently, the investor is only obligated to
present title to that part of the real property on which
one of the stages of the development will be
executed.

In the instant case, the decision approving the design
for stage II of the investor’s property development
project was appealed against by owners of the
adjacent properties. They submitted that the
construction significantly limits the development
prospects of their properties located in the area
affected by the proposed works. The voivoder
supported their case and revoked the decision on the
grounds that an investor is required to attach to the
application the design for the entire proposed
property development project. In his opinion,
obtaining the permit is conditional on having in
place an approved design for the entire proposed
construction.

This opinion was contested by both the Regional
Administrative
Court
and
the
Supreme
Administrative Court. The Court held that the
documentation need not be submitted at the very
outset, as it would be in glaring contradiction with
the provisions of the Construction Law, which after
all is supposed to remove obstacles to the
development of construction. The obligation to
substantiate the right to use the real property for
construction purposes for the entire development
project, as early as at the commencement of the
works on a single stage, would prevent many of the
investors from undertaking the development at all. In
addition, it would significantly increase their risk
exposure. At the same time, it must be noted that this
was exactly the rationale for the introduction of
staging in construction works. As provided for under
Article 33(1) of the Building Law, the construction
permit pertains to the entire construction project. In
the case of a construction project involving more
than a single building or structure, the construction
permit may, at the request of the investor, cover
selected buildings or structures or a complex of
buildings or structures which are capable of being
operated independently in accordance with their
purpose. This is what staging of construction is. As
stressed by case-law, this situation is possible only
when upon completion buildings or structures can be
operated on a stand-alone basis. On the other hand,
Article 33(2) provides that among others a statement
on being in possession of the right to use the real
property for building purposes must be attached to
the construction permit. The plain language meaning
of that provision, as adopted by the voivoder in the
case under review, is not the way it should be
construed. On the contrary, this should be taken to
mean the land for construction of the relevant stage,
if that is how the investor decided to stage the
project. As stressed by the Court, a different
interpretation of the provisions would greatly limit
the capabilities of property investors, increase risk,
and by the same token become a significant
hindrance to the development of construction.

MILLER, CANFIELD,
W. BABICKI, A. CHEŁCHOWSKI I WSPÓLNICY SP.K.
ul. Batorego 28-32
81-366 Gdynia
Tel. +48 58 782-0050
Fax +48 58 782-0060
gdynia@pl.millercanfield.com
ul. Nowogrodzka 11
00-513 Warszawa
Tel. +48 22 447-4300
Fax +48 22 447-4301
warszawa@pl.millercanfield.com
ul. Skarbowców 23a
53-125 Wrocław
Tel. +48 71 780-3100
Fax +48 71 780-3101
wroclaw@pl.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.