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Real Estate & Construction

Current changes in the construction law

by Grażyna Kuźma, partner, attorney-at-law, Taylor Wessing
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What interesting changes can we expect this year in the broad sense of construction law?

We have heard for many years about the changes in construction law and the drafting process of the building code. Various governments have announced plans to simplify the code, making easier the lives of investors big and small. Yet nothing solid has happened and these amendments and improvements to the building code remain at the planning stage. This time round, it is supposed to be different.

The Ministry of Infrastructure has suggested a new 'investment act' (draft dated 20 September 2017 on changes of some acts in relation to simplifying investment and building processes). There are three main areas of change:

  • New regulations related to issuing decisions on development conditions (WZ);

  • Imposing duties on local authorities to designate urban areas (OZ)

  • Introducing a new planning instrument, called the organised investment area (OZI)

The Ministry,  as the author of the changes, explains that it is taking care of the spatial order in public space.. According to the draft decisions on development conditions, permits are only supposed to be issued for plots which are in the immediate neighbourhood of developed ones. In the justification of the act we read: “it has become necessary to specify conditions to obtain a decision on development conditions to fulfil the intentions of legislators of the Act of 2003 and to use WZ decisions as a tool to add buildings onto areas which are prepared for this, and not as an instrument for chaotic urban expansion.”

According to estimates only 30% of Poland's territory is covered by spatial development plans, whilst 70% of this country does not. What does this mean in practice? Well, the lack of spatial development plans means that to start building work on areas not covered by such a plan, it is necessary to obtain a decision on development conditions.

The Ministry has foreseen in the new act change of the provisions stipulating conditions for issuing the WZ (development conditions). Currently issuing a WZ decision is possible when at least one neighbouring plot is developed and it is possible to determine the requirements related to the planned buildings which shall continue functions implemented on the neighbouring plots.  However, according to the draft, a decision on the development plan is to be issued if “a plot has a common border of at least 4m in length and the building must not be an auxiliary building”. When one reads this definition, the first question which comes to mind  is what about the owners of the plots located next to roads, parks, forests or pieces of wasteland which do not fulfil the requirements and which are not included in the spatial plan?

According to the draft, an important issue for private investors and developers is that the decisions on development conditions will be valid for two years. After this period, they will automatically expire and it will not be possible to reapply for a building permit based on the original development plan. This statutory two-year period will be applicable for decisions which were issued before the act comes into force. As for these decisions, the term commences on the day in which the act comes into force. This change may be a huge obstacle for big investors and developers, who carry out large and technologically complex projects, which can be in the planning stages for as long as 10 years, often due to the necessity to source proper  funding.

There are some fundamental discrepancies in the current regulations where the draft foresees limitation as regards the entities which will be authorised to obtain a decision on development conditions, in particular only an owner or a perpetual usufructuary will be able to apply for a WZ decision. Thus it will no longer be possible for a potential investor, who is neither an owner nor a perpetual usufructuary, to obtain WZ decision for a particular plot. The draft maintains the facility to transfer WZ decisions onto other entities, providing specific conditions for such an activity.

The Act also provides for an extension of the period for which it will be possible to suspend the proceedings initiated on the issue of a decision on development conditions from the current period of nine months up to a period of 18 months as for work on adopting the local spatial development plan. The Act also includes the option of determining the building area, which will be in the form of guidelines for issuing development conditions in a given area.

Along with the amendment to the Act, a new planning tool will be introduced, namely the Area of Organized Investments (OZI). The OZI is intended to combine the planning and executive stages. The project provides for the possibility to issue integrated building permits based on the findings of a new planning act – a regulatory plan. Such a plan would, the legislators intend, ensure the stability of arrangements for spatial development, combining the development plan with high-quality space, and strive for its continuous increase. Certain issues were clarified, such as the requirements related to environmental compensation, so that as a result of the investment there is no loss in the amount of forestry areas. The act will allow the takeover, with the consent of the municipality, of planning initiatives within Areas of Organised Investments by the voivodship.

The introduction of the OZI will restructure the nature of decisions on building conditions and restore its original role, namely the role of a tool to add buildings to the developed areas . The proposed changes eliminate the biggest obstacles which arose around the functioning of the decision on building conditions system and result in uncertainty as to the development of public space (e.g. location of other burdens on the basis of this decision or other nuisance buildings directly in the vicinity of housing). The draft law also clarifies the conditions for obtaining a WZ decision regarding a 'good neighbourhood', access to a public roads and utilities.

In addition to these proposed changes,the Ministry plans to introduce more specific principles of preparing the local plan. These should include the corresponding demands for land as well as the obligation to designate an urbanised area. The Act also provides for the possibility of a joint change of the study and the local plan; this would be a revolutionary change. According to regulations currently in force, changes to the spatial development study and the zoning plan based on this study are carried out in the form of separate procedures.

The Ministry explains that changes are introduced to facilitate the preservation of spatial order. Of course, as we have heard repeatedly for years, the changes described above will be the beginning of the implementation of the Urban and Construction Code, which will be a comprehensive regulation of the investment process ... maybe this time it will succeed? It remains to be seen.

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