As announced last week, today we would like to discuss the procedure for obtaining approvals from the National Support Centre for Agriculture (KOWR) for the acquisition of agricultural land, which is governed by the Act of 11 April 2003 on Shaping the Agricultural System (UKUR). This means that the requirements described below do not apply to agricultural properties smaller than 0.3 hectares or internal roads, among other things.
As we mentioned last week ( #59 ), agricultural property with an area equal to or greater than 1 hectare should generally be sold to an individual farmer. Its acquisition by another entity or within five years of acquisition requires the consent of the National Agricultural Support Center (KOWR).
Consent to the acquisition of Real Estate by an entity that is not a farmer
Generally, the acquisition of agricultural real estate by a non-farmer may occur with the consent of the Director General of the National Agricultural Support Center (KOWR), expressed in an administrative decision issued at the request of the seller or buyer. Applications may also be submitted by universities, individuals intending to establish a family farm, or individuals intending to expand their family farm. For each of these entities, the UKUR introduces different requirements for submitting a successful application.
In the following sections, we will discuss the procedure for submitting an application by the seller , as this is the most common practice and where we see the greatest potential for obtaining it. Such an application may be submitted if: (a) the seller demonstrates that it was impossible to sell the agricultural property to an individual farmer, unless the acquisition of the property is to be based on a legal transaction other than the sale of the property; (b) the buyer of the agricultural property undertakes to conduct agricultural activities on the acquired agricultural property; (c) the acquisition of the agricultural property does not result in excessive concentration of agricultural land. All of these conditions must be met cumulatively.
To meet the requirement in letter (a), the seller must post a notice of intent to sell the property via the e-rolnik IT system https://erolnik.gov.pl/#/ (provided free of charge by the National Support Center for Real Estate Development). The regulations specify in detail what must be included in the notice and in the purchase offer. The sale notice must be active in the e-rolnik system for at least 30 days from the date of its posting.
Only if no one responds to the advertisement within this period will the seller be able to submit an application to the KOWR Regional Branch appropriate for the property's location, requesting consent for the purchase of the property by a non-farmer. The regulations do not require the use of a formal form. However, the application must include the name of the person who owns the property, their address, and the request, and be signed by the applicant. It should also include the name of the seller and buyer of the agricultural property (including their addresses), the designation of the property to be sold, and the justification for the application, in particular, the purpose for which the agricultural property is being purchased and its intended use.
The application must be accompanied by, among other things, documents confirming that the conditions for obtaining consent have been met, including a printout from the e-rolnik system confirming the posting of the advertisement. The application or its attachments should include a declaration from the seller of the agricultural property stating: (i) the impossibility of selling the agricultural property to an individual farmer; (ii) the agreed-upon selling price of the agricultural property with the buyer. The application for consent to purchase the property is subject to a stamp duty of PLN 10. The application must also be accompanied by declarations from the buyer, in which they (i) undertake to conduct agricultural activities on the purchased property and (ii) provide information on the area of all agricultural properties they own (whether owned, held in perpetual usufruct, held in sole proprietorship, or leased).
It should be remembered that if the application for consent is submitted after 6 months from the date of expiry of the deadline for submitting responses to the advertisement, the Director General of KOWR will refuse to give consent to the acquisition of agricultural real estate.
If the KOWR issues a negative decision, the parties have the right to appeal to the Minister of Agriculture and Rural Development.
Consent to sell real estate before the expiry of 5 years
According to the UKUR, the purchaser of agricultural property is obligated to operate the farm, which includes the purchased agricultural property, for a period of at least five years from the date of purchase. This obligation also applies to individual farmers, who were not required to obtain consent for the purchase. Furthermore, if the purchaser is an individual, they are obligated to operate the farm themselves. During this period, the agricultural land cannot be sold or even transferred to other entities (e.g., leased).
However, it is possible to avoid this obligation by obtaining consent from the Director General of the National Support Centre for Agriculture (i.e., the KOWR headquarters in Warsaw). An entity wishing to dispose of agricultural land should submit an application for such consent by way of an administrative decision. Consent is granted in cases justified by the important interests of the purchaser of the agricultural property or the public interest.
Obtaining this consent requires demonstrating a compelling personal or social reason. A classic example would be a serious illness of an individual farmer that prevents them from operating their farm. According to the National Support Centre for Rural Development (KOWR), economic reasons or the emergence of a lucrative opportunity are not sufficient grounds for granting consent. Regarding the public interest, it seems that this could include, for example, transferring real estate to a foundation or municipality that wishes to implement an investment project that benefits the local community.
The regulations do not require the use of a template application, nor do they provide a specific application form. However, it must meet the requirements of the Code of Administrative Procedure, including at least the applicant's name, address, and request. It should also include the agricultural property designation and indicate whether the property is to be sold or transferred to another entity. The application is subject to a stamp duty of PLN 10.
The consent is issued by way of an administrative decision, and the applicant has the right to appeal to the Minister of Agriculture and Rural Development.
In summary, trading in agricultural land is subject to restrictions, which are specifically regulated by the UKUR. Therefore, each case of trading in agricultural property exceeding 1 hectare requires individual analysis to determine whether it is possible to obtain KOWR approval for the transaction.
Next week we will analyze cases where, although not the farmer can purchase agricultural land, the KOWR has priority in purchasing it, and therefore also in purchasing it.
This alert is for informational purposes only and does not constitute legal advice.
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