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Changes to perpetual usufruct in the context of the investment process

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Michał Matera

Partner

Warsaw

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Piotr Przybylski

Counsel

Warsaw

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09 September 2019

The act amending the Act on the National Housing Resources was signed by the President on 2 July 2019. The purpose of this act is to ensure the smooth implementation of the governmental project "Apartment Plus".

This act also amends the Construction Law and the Act on Real Property Management as regards the purpose of the perpetual usufruct.

Under the amending act the authority will not be authorised to refuse to approve building-permit design and to grant a building permit if the title for utilising a real property for construction purposes is the perpetual usufruct and the purpose of the perpetual usufruct is inconsistent with the specific intended project. Under the current regulations the authorities used to freeze the construction process due to the inconsistence between the purpose and the intended project. Furthermore, the holder of the right to perpetual usufruct had to overcome numerous obstacles in the procedure of changing the purpose of the perpetual usufruct.

The modifications shall also be made in the provisions on the procedure of changing the purpose of the perpetual usufruct. The holder of the right of perpetual usufruct may request that the purpose of the perpetual usufruct be changed if the method of using such real property changed permanently. The holder of the right of perpetual usufruct may also submit such request if the method of using such real property has not changed permanently, but the change is consistent with the local land management plan, an occupancy permit decision, the notification of construction or redevelopment, a resolution on determining the location for a housing investment or an associated investment or the planning permit decision.

Changing the purpose of the perpetual usufruct is in principle free of any charge, but if as a result of such change the rate of the annual fee becomes lower, the parties may agree on a one-off fee not exceeding twice the annual fee. The authority must present its written opinion in 2 months of receiving the request. In the vent of refusal the holder of the right of perpetual usufruct may file a lawsuit to a common court.

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