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The concept of “adaptation” in construction law and related regulations

Recent years have shown that adapting and modernising old buildings and industrial buildings, such as those in Łódź, Poznań, Żyrardów or Warsaw, is worthwhile. However, it is important to keep in mind that such undertakings, usually involving higher costs than the construction of new facilities, not always are successful. One of the reasons for possible failure – perhaps most significant – is a legal loophole in construction law. The Act on construction law dated July 7, 19941 not only does not define the term “adaptation”, but it does not at all mention it. It is also not included in the Act on spatial planning and development2. However, the term does exist in some construction-related regulations, such as the Ordinance of the Minister for Infrastructure on technical conditions to be met by buildings and their location dated April 12, 20023, the Ordinance of the Minister for Transport and Maritime Economy on technical conditions to be met by marine hydro technical structures and their location dated June 1, 19984, and the Act on protection and care for monuments dated July 23, 20035. It may also be found in tax regulations: the Act on Personal Income Tax dated July 26, 19916, the Act on Corporate Income Tax dated February 15, 19927, regulations determining the conditions and procedures for granting and paying financial aid in relevant sectors of the economy8, regulations concerning employment9, regulations concerning support for families and other persons in purchasing their own housing10, regulations on repatriation11, and even international agreements to which Poland is a party12.

These legal acts generally use the term “adaptation” in connection with terms used in the Act on construction law, some of which are defined13, such as:

  • construction works – the construction, as well as works consisting of reconstruction, assembly, renovation or demolition of a structure;
  • reconstruction – the performance of construction works resulting in a change to the performance or technical parameters of an existing structure, with the exception of characteristic parameters such as: cubic capacity, building area, height, length, width or number of storeys; in the case of roads, changes in characteristic parameters are permissible to the extent not requiring a change in the road lane boundaries;
    renovation – the performance, in an existing structure, of construction works involving the restoration of the original state of the building, which do not constitute current maintenance, where construction products other than those used in the original state are permitted.

The common characteristic of legal acts using the term “adaptation” is that it is impossible to establish from their content what is its meaning in the context of construction activities. The term appears alongside other terms in a sequence of words linked with an “or” or equivalent. As a consequence, the linguistic interpretation, together with the systemic interpretation (the concept of adaptation should be considered as part of a larger whole, part of a system of law and, when interpreting its content, to preserve the completeness and the integrity of the legal system), it is clear that for the purpose of the following, adaptation is not:

  • repatriation – the renovation of housing premises14 or renovation or furnishing of such housing premises15;
  • employing disabled workers – equipping the workplace of a person who is not a disabled person16;
  • financial aid for the purchase of one’s own housing and fixed rate housing loans – superstructure, reconstruction or extension of a residential building17;
  • granting financial aid to a fruit and vegetable producer group – reconstruction and renovation of buildings and structures18;
  • the national programme for the protection and care for monuments – renovation or model maintenance19;
  • marine structures – reconstruction, alteration, extension, superstructure, addition, renovation, modernisation or change of use of existing marine structures or parts thereof20;
  • personal income tax – extension, superstructure or reconstruction for residential purposes of one’s own non-residential building, part thereof, one’s own non-residential premises or one’s own non-residential room21, as well as construction, extension, superstructure, reconstruction or renovation of a building or part thereof22;
  • corporate income tax – reconstruction, extension, superstructure, reconstruction, modernisation or renovation of a building or part thereof23.

The courts, operating in the legal environment described above, have failed to develop a general understanding of adaptation in the context of construction activities. For example the Supreme Administrative Court in Warsaw ruled only that, in the absence of a more precise definition of the term “for adaptation” in the local zoning plan, the term should be interpreted literally and in accordance with the dictionary translation, as “adaptation for other use”24. The dictionary of the Polish language states that an adaptation is “among other things an adaptation for another use, a conversion to change one’s nature, especially of a literary work, a building; […] An adaptation of a residential building for an office”25. The analysis of the case-law leads to the conclusion that the courts interpret the term “adaptation” on the basis of particular circumstances and related legal status. Hence numerous, divergent, often objectively contradictory judgments:

  • Adaptation identified with renovation and reconstruction (“With regard to other services indicated in the application for interpretation such as room adaptation (renovation, reconstruction)26);
  • Adaptation identified only with reconstruction (“The first decision on permission for reconstruction (attic adaptation) excluded the adopted part from the parts of the building intended for common use.27”);
  • “A part of the building cannot be considered as demolition and therefore lack of existence of the building should it be adapted for different use, or a new (residential) function.”28
  • “Adaptation – i.e. adjusting, alteration, giving something specific nature; in construction, using it for a purpose other than the original one, adapting it to the new function”. […] “The use of the term “adaptation” in documentation (contract, invoice) is irrelevant. The key is the nature of the expenditure made. Only those expenses which aim at the improvement necessary for the functionality will qualify as adaptation work”29.
  • “Adaptation, as referred to in Article 26 section 7a point 1 of the Act on Personal Income Tax, shall mean such adaptation of a flat or residential building that enables or facilitates the life of the disabled person and is directly related to the type of disability of the taxpayer. The assessment of the correctness of including the “renovation” indicated by the taxpayer cannot be made by the authority solely on the basis of submitted invoices for materials and equipment purchased which, according to the authority, are standard, are available for sale to the general public, are in general use by an undefined public. On their basis, the authority is not able to assess whether the renovation was or was not within the limits of adaptation of the premises. It is only when the authority has carried out a visual inspection of the place where the service has been provided that it will be able to objectively assess whether the equipment actually installed and the renovation work carried has not resulted in making life easier or possible and whether it is directly related to the type of disability.”30
  • “As for the concepts of “adaptation” and “expansion”, it is clear that they do not have to be mutually exclusive. Adaptation can, but does not have to consist of the reconstruction or expansion of a facility. Adaptation is the adjustment of something to a different use than originally intended. For example, adapting a residential building to the needs of a business. Adaptation is, in short, the same as adjusting, reworking. […] The analysis of both concepts leads to the conclusion that adaptation can, but does not have to consist of the reconstruction or expansion of a building. Therefore, the notion of “adaptation” may also include expansion. And to such “adaptation” through expansion the Voivodship Monument Conservator has agreed in the case in hand. It follows from his decision that the existing building of the state archive is to retain its current shape, and its expansion is to consist in the reconstruction of the former building adjacent to the northern fence of the courtyard”.31
  • “If there is a significant improvement of the premises and a change in their character, the work should be considered an adaptation and not a renovation”.32
  • “Thus, the deduction shall be granted to those taxpayers who have renovated or modernised a premise (building), provided that it is a residential premise (building). There is no doubt that the deduction applies to a residential premises, not to a unit subject to the adaptation process. Such works cannot be identified with the renovation or modernisation of a flat. However, a separate deduction was granted under Article 27a section 1 letter g) of the Act on PIT for the renovation and upgrading of a residential building or residential premise occupied under a legal title. These were two different deductions, which were independent of each other and regulated separately in view of the scope of the construction work, which only confirms that it is not possible to identify reconstruction or adaptation with renovation or modernisation”.33
  • “Improvement of a fixed asset includes adaptation, reconstruction, extension and modernization. Fixed assets shall be considered as improved when the expenditure incurred for this purpose has resulted in an increase in their utility value in relation to the value on the date of their adoption for use. Improvement of a fixed asset includes adaptation, reconstruction, extension, modernisation and reconstruction. In the case under consideration, an adaptation is a modification of the premises aimed at its use for a purpose other than its original purpose or at giving it new functional features. Modernization is nothing other than upgrading, reconstruction is a change or improvement of the premises aimed at adapting them to the functions envisaged by taxpayers – otherwise known as a change of technical conditions or utility properties”.34
  • “The catalogue of improvement works is considered exhaustive (reconstruction, extension, reconstruction, adaptation, modernization) and often the improvement works are combined with renovation works. This in turn means that both the type of work and its scope should be determined in detail and classified into individual categories.

Moreover, expenses for the improvement of fixed assets include expenses for:

  • reconstruction, i.e. replacement (improvement) of existing fixed assets with another,
  • extension, i.e. enlargement ( expansion) of assets, in particular technological buildings and structures, etc.,
  • reconstruction, i.e. restoring (rebuilding) of completely or partially used assets,
  • adaptation, i.e. adjustment (reworking of an asset) to use it for a purpose other than that for which it was originally intended or giving it new functional features,
  • modernisation, i.e. upgrading of fixed assets”.35

Absence of statutory regulations concerning adaptation in construction law, and diverse case-law should prompt potential investors to analyse very carefully the risks associated with a construction project aimed at adapting an existing structure. Local zoning plans may certainly be helpful, except that there are areas where they have not been adopted, and if they have, they do not necessarily regulate the issue of adaptation.

1. Dz.U.2020.1333 t.j. / Journal of laws Dz.U.2020.1333.
2. Ustawa z dnia 27 marca 2003 r. o planowaniu i zagospodarowaniu przestrzennym (Dz.U.2020.293 t.j.). / Act on Spatial Planning and Development dated March 27 2003 (Journal of laws Dz.U.2020.293).
3. (Dz.U.2019.1065 t.j.) / Journal of laws Dz.U.2019.1065.
4. Dz.U.1998.101.645 / Journal of laws Dz.U.1998.101.645.
5. Dz.U.2020.282 t.j. / Journal of laws Dz.U.2020.282.
6. Dz.U.2020.1426 t.j. / Journal of laws Dz.U.2020.1426.
7. Dz.U.2020.1406 t.j. / Journal of laws Dz.U.2020.1406.
8. Np. Rozporządzenie ministra rolnictwa i rozwoju wsi z dnia 21 sierpnia 2015 r. w sprawie szczegółowych warunków i trybu przyznawania oraz wypłaty pomocy finansowej na operacje typu „Modernizacja gospodarstw rolnych” w ramach poddziałania „Wsparcie inwestycji w gospodarstwach rolnych” objętego Programem Rozwoju Obszarów Wiejskich na lata 2014-2020 (Dz.U.2020.719 t.j.). / Such as the Ordinance of the Minister for Agriculture and Rural Development on detailed conditions and procedures for granting and paying financial aid for operations of the “Modernisation of agricultural farms” under the “Support for investments in agricultural farms” measure covered by the Rural Development Programme for 2014-2020 dated August 21, 2015 (Journal of laws Dz.U.2020.719).
9. Np. Rozporządzenie ministra pracy i polityki społecznej z dnia 23 grudnia 2014 r. w sprawie zwrotu dodatkowych kosztów związanych z zatrudnianiem pracowników niepełnosprawnych (Dz.U.2014.1987). / Such as the Ordinance of the Minister for Labour and Social Policy dated December 23, 2014 on the reimbursement of additional costs related to the employment of disabled employees (Journal of laws Dz.U.2014.1987).
10. Ustawa z dnia 8 września 2006 r. o finansowym wsparciu rodzin i innych osób w nabywaniu własnego mieszkania (Dz.U.2019.1011 t.j.); ustawa z dnia 26 października 1995 r. o niektórych formach popierania budownictwa mieszkaniowego (Dz.U.2000.98.1070 t.j.); ustawa z dnia 5 grudnia 2002 r. o dopłatach do oprocentowania kredytów mieszkaniowych o stałej stopie procentowej (Dz.U.2019.1454 t.j.). / Act on financial aid for families and other persons in purchasing their own housing dated September 8, 2006 (Dz.U.2019.1011); Act on certain forms of support for housing construction dated October 26, 1995 (Dz.U.2000.98.1070); Act on interest subsidies for fixed rate housing loans dated December 5, 2002 (Dz.U.2019.1454).
11. Ustawa z dnia 9 listopada 2000 r. o repatriacji (Dz.U.2019.1472 t.j); rozporządzenie ministra spraw wewnętrznych i administracji z dnia 14 czerwca 2018 r. w sprawie wzoru formularza wniosku o przyznanie repatriantowi pomocy finansowej z tytułu remontu, adaptacji lub wyposażenia lokalu mieszkalnego (Dz.U.2018.1204). / Act on repatriation dated November 9, 2000 (Journal of Laws Dz.U.2019.1472); Ordinance of the Minister for Internal Affairs and Administration on the model application form for granting financial aid to a repatriate for renovation, adaptation or furnishing of a dwelling dated June 14, 2018 (Journal of laws Dz.U.2018.1204).
12. Np. Konwencja o ochronie dziedzictwa architektonicznego Europy, sporządzona w Grenadzie dnia 3 października 1985 r. (Dz.U.2012.210); Umowa sporządzona w Warszawie dnia 24 kwietnia 1992 r. między Rządem Rzeczypospolitej Polskiej a Rządem Republiki Białoruś w sprawie przejść granicznych (M.P.2003.37.518); Umowa między Rzecząpospolitą Polską a Republiką Słowacką o ułatwieniach w odprawie granicznej w ruchu kolejowym i drogowym, podpisana w Starej Lubowni dnia 29 lipca 2002 r. (Dz.U.2004.221.2244). / Such as Convention for the Protection of the Architectural Heritage of Europe, concluded in Grenada on October 3, 1985. (Journal of laws Dz.U.2012.210); Agreement concluded in Warsaw on April 24, 1992 between the Government of the Republic of Poland and the Government of the Republic of Belarus on border crossings (M.P.2003.37.518); Agreement between the Republic of Poland and the Slovak Republic on facilitation of border checks in railway and road traffic, executed in Stara Lubownia on July 29, 2002. (Journal of laws Dz.U.2004.221.2244).
13. Dz.U.2020.1333 t.j., art. 3 pkt 7, 7a, 8. / Journal of laws Dz.U.2020.1333, Article 3 points 7, 7a, 8.
Rozporządzenie Rady Ministrów z dnia 21 czerwca 2018 r. w sprawie podziału rezerwy celowej budżetu państwa “Pomoc dla repatriantów” (Dz.U.2018.1352), § 1 pkt 1) lit. e). / Ordinance of the Council of Ministers on the distribution of the special reserve of the state budget “Aid for repatriates” dated June 21, 2018 (Journal of laws Dz.U.2018.1352), § 1 point 1 letter e).
14. Ustawa z dnia 9 listopada 2000 r. o repatriacji (Dz.U.2019.1472 t.j), art. 17 ust. 2. / Act on repatriation dated November 9, 2000 (Journal of laws Dz.U.2019.1472), Article 17 section 2.
15. Rozporządzenie ministra pracy i polityki społecznej z dnia 23 grudnia 2014 r. w sprawie zwrotu dodatkowych kosztów związanych z zatrudnianiem pracowników niepełnosprawnych (Dz.U.2014.1987), § 4 ust. 2. / Ordinance of the Minister for Labour and Social Policy dated December 23, 2014 on the reimbursement of additional costs related to the employment of disabled employees (Journal of laws Dz.U.2014.1987), § 4 Section 2.
16. Ustawa z dnia 8 września 2006 r. o finansowym wsparciu rodzin i innych osób w nabywaniu własnego mieszkania (Dz.U.2019.1011 t.j.), art. 5 ust. 1 pkt 1) lit. f); ustawa z dnia 5 grudnia 2002 r. o dopłatach do oprocentowania kredytów mieszkaniowych o stałej stopie procentowej (Dz.U.2019.1454 t.j.), art. 3 ust. 2 pkt 1) lit. b). / Act on Financial Support for Families and Other Persons to Acquire Their Own Housing dated September 8, 2006 (Journal of laws Dz.U.2019.1011), Article 5 section 1 point 1 letter f); Act on Interest Subsidies for Fixed Rate Housing Loans dated December 5, 2002 (Journal of laws Dz.U.2019.1454) Article 3 section 2 point 1 letter b).
17. Rozporządzenie ministra rolnictwa i rozwoju wsi z dnia 12 lipca 2013 r.w sprawie szczegółowych warunków przyznawania pomocy finansowej wstępnie uznanej grupie producentów owoców i warzyw oraz wykazu kwalifikowanych kosztów inwestycji ujętych w zatwierdzonym planie dochodzenia do uznania (Dz.U.2020.1701 t.j.) Załącznik – wykaz kwalifikowanych kosztów inwestycji ujętych w zatwierdzonym planie dochodzenia do uznania, pkt 5). / Ordinance of the Minister for Agriculture and Rural Development on the detailed conditions for granting financial aid to a fruit and vegetable producer group granted preliminary recognition and the list of eligible investment costs included in the approved recognition plan dated July 12, 2013 (Journal of laws Dz.U.2020.1701) Annex – list of eligible investment costs included in the approved recognition plan, point 5).
18. Uchwała nr 82 Rady Ministrów z dnia 13 sierpnia 2019 r. w sprawie “Krajowego programu ochrony zabytków i opieki nad zabytkami na lata 2019-2022” (M.P.2019.808), Załącznik pkt 1.2.4. / Resolution No 82 of the Council of Ministers on the “National Programme for the Protection and Care for Monuments for 2019-2022” dated August 13, 2019 (M.P.2019.808), Point 1.2.4. of the Annex.
19. Rozporządzenie ministra transportu i gospodarki morskiej z dnia 1 czerwca 1998 r. w sprawie warunków technicznych, jakim powinny odpowiadać morskie budowle hydrotechniczne i ich usytuowanie (Dz.U.1998.101.645), § 4 ust. 2, § 5. / Ordinance of the Minister for Transport and Maritime Economy on technical conditions to be met by marine hydro technical structures and their location dated June 1, 1998 (Journal of laws Dz.U.1998.101.645), § 4 section 2, § 5.
20. Ustawa z dnia 26 lipca 1991 r. o podatku dochodowym od osób fizycznych (Dz.U.2020.1426 t.j.), art. 21 ust. 25 pkt 1) lit. e). / Act on Personal Income Tax dated July 26, 1991 (Journal of laws Dz.U.2020.1426), Article 21 section 25 point 1 letter e).
21. Ustawa z dnia 26 lipca 1991 r. o podatku dochodowym od osób fizycznych (Dz.U.2020.1426 t.j.), art. 21 ust. 28 pkt 2). / Act on Personal Income Tax dated July 26, 1991 (Journal of laws Dz.U.2020.1426), Article 21 section 28 point 2.
22. Ustawa z dnia 15 lutego 1992 r. o podatku dochodowym od osób prawnych (Dz.U.2020.1406 t.j.), art. 15 ust. 1 zb. / Act on Corporate Income Tax dated February 15, 1992 (Journal of Laws Dz.U.2020.1406), Article 15 point 1 letter zb).
23. Wyrok NSA (do 2003.12.31) w Warszawie z 13.08.1998 r., IV SA 1580/96, LEX nr 43822. / Judgement of the Supreme Administrative Court (until 31.12.2003) in Warsaw dated 13.08.1998 No IV SA 1580/96, LEX No 43822.
24. Słownik języka polskiego PWN, red. M. Szymczak, t. I, Wydawnictwo Naukowe PWN, Warszawa 1996. / The PWN dictionary of the Polish language, red. M. Szymczak, t. I, Wydawnictwo Naukowe PWN, Warsaw 1996.
25. Wyrok NSA z 30.10.2014 r., I FSK 1578/13, LEX nr 1590701. / Judgement of the Supreme Administrative Court dated 30.10.2014 No I FSK 1578/13, LEX No 1590701.
26. Wyrok Sądu Okręgowego w Elblągu z 18.10.2018 r., I Ca 146/18, LEX nr 2662097. / Judgment of the Regional Court in Elbląg dated 18.10.2018, No I Ca 146/18, LEX No 2662097.
27. Wyrok NSA z 25.08.2016 r., II FSK 832/15, LEX nr 2101628. / Judgement of the Supreme Administrative Court dated 25.08.2016 No II FSK 832/15, LEX No 101628.
28. Wyrok WSA we Wrocławiu z 26.05.2015 r., I SA/Wr 202/15, LEX nr 1952855. / Judgment of the Provincial Administrative Court in Wrocław dated 26.05.2015, No I SA/Wr 202/15, LEX No 1952855.
29. Wyrok WSA w Białymstoku z 6.05.2014 r., I SA/Bk 8/14, LEX nr 1512252. / Judgment of the Provincial Administrative Court in Białystok dated 6.05.2014, No I SA/Bk 8/14, LEX No 1512252.
30. Wyrok WSA w Warszawie z 15.05.2006 r., IV SA/Wa 518/06, LEX nr 230297. / Judgment of the Provincial Administrative Court in Warsaw dated 15.05.2006, No IV SA/Wa 518/06, LEX No 230297.
31. Wyrok NSA z 19.09.2008 r., II FSK 641/07, www.nsa.gov.pl / Judgement of the Supreme Administrative Court dated 19.09.2008, No II FSK 641/07, www.nsa.gov.pl
32. Wyrok WSA w Gorzowie Wielkopolskim z 14.07.2010 r., I SA/Go 530/10, LEX nr 673260. / Judgment of the Provincial Administrative Court in Gorzów Wielkopolski dated 14.07.2010, No I SA/Go 530/10, LEX No 673260.
33. Wyrok NSA (do 2003.12.31) w Warszawie z 5.02.2002 r., III SA 3135/00, LEX nr 76655. / Judgement of the Supreme Administrative Court (until 31.12.2003) in Warsaw dated 5.02.2002, No III SA 3135/00, LEX No 76655.
34. Wyrok NSA z 28.06.2011 r., II FSK 225/10, LEX nr 1083046. / Judgement of the Supreme Administrative Court dated 28.06.2011, No II FSK 225/10, LEX No 1083046.

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