In the first November article in the series "Tuesday Mornings for Construction" we will summarize the most important changes in investment and construction law in October 2023, which we believe may be of interest to many investors.
State Treasury payment guarantee
On 16 October 2023, a new paragraph was introduced into Article 649(1) of the Civil Code – § 1(1) – amending the rules for granting a payment guarantee in a construction works contract by the State Treasury .
Under the new provision, § 1 does not apply to construction contracts entered into by the State Treasury as the investor. Therefore, if the State Treasury is the investor in a construction contract, it is not obligated to provide a payment guarantee as specified in Article 649(1) of the Civil Code. This is particularly important because now contractors entering into construction contracts (including during public-private partnerships) cannot automatically expect the State Treasury to provide a payment guarantee. Consequently, the contractor's protection will be lessened. However, we do not rule out the possibility that, under contractual provisions, in accordance with the principle of freedom of contract arising from Article 353(1) of the Civil Code, it will be possible to establish that the State Treasury will nevertheless provide such a payment guarantee.
We would also like to point out that the introduced exclusion applies only to the State Treasury and does not cover construction contracts concluded by local government units.
The change was introduced by the Act of 13 July 2023 amending the Act on providing information on the environment and its protection, public participation in environmental protection and on environmental impact assessments and certain other acts (the “ Amendment ”).
Notification of construction works – photovoltaic farms
As of October 1, 2023, a significant change has also been introduced in construction law, which is particularly important for the rapid and significant development of photovoltaics in Poland. The legislator has amended the catalog of construction and construction works that do not require a building permit, and only notification is required for their implementation. Article 29, paragraph 4, item 3) letter c of the Construction Law has increased the current limit on installed electricity capacity from 50 kW to 150 kW for heat pumps, free-standing solar collectors, and photovoltaic devices.
This change is intended to simplify procedures for larger photovoltaic investments, which will also meet the new, three-fold limit. This stems from the fact that the legislature decided not to require investors to obtain a building permit; merely submitting a notification is sufficient for their implementation. This is another significant change that could positively impact the development of the photovoltaic market in Poland. Importantly, the new power limit of 150 kW primarily covers installations constructed by individuals to supply energy to their homes.
Proceedings for issuing a decision on determining the location of a public purpose investment
The amendment also partially changed the conditions for applying for a decision to establish the location of a public purpose investment. The volume of documents that an investor will be required to submit when applying for a decision to establish the location of a public purpose investment has increased. Pursuant to Article 52, Section 2a of the Act of March 27, 2003, on Spatial Planning and Development, in the wording effective from October 16, 2023 (" PZP "), a new obligation has been imposed on the investor to also submit decisions arising from separate regulations with such an application, in particular decisions on environmental conditions pursuant to Article 72 of the Act of October 3, 2008, on the Provision of Information on the Environment and its Protection, Public Participation in Environmental Protection, and Environmental Impact Assessments. Therefore, it is essential that an investor planning a project that may have an environmental impact and wishes to implement it as a public purpose investment location must attach to the application a decision on environmental conditions, which specifies the environmental conditions for the project's implementation.
In connection with the Amendment, changes were also introduced in the scope of participation of the director of the Regional Directorate for Environmental Protection ("RDOŚ") in the proceedings for issuing a decision on the location of a public purpose investment.
Therefore, pursuant to Article 53, Section 5ba of the Spatial Development Act, the Regional Directorate for Environmental Protection (RDOŚ) has been granted the power to refuse approval of a decision on the location of a public investment if an environmental decision, if required, is not attached to the draft decisions. It has also been given a stronger oversight mechanism, requiring investors to submit a thorough verification of the environmental conditions of their projects.
This article is for informational purposes only and does not constitute legal advice.
Legal status as of October 31, 2023
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