In today’s article from our series, we would like to combine the issue of applying the Act of 5 July 2018 on facilitating the preparation and implementation of housing investments and accompanying investments (hereinafter referred to as “lex developer” or “special housing act”) with the acquisition of agricultural real estate.
First, we remind you that the acquisition of agricultural real estate is regulated (in principle) by the Act on Shaping the Agricultural System ("UKUR") and is subject to a number of restrictions (we wrote about this in alerts #60 and #61 ). This Act also states that restrictions on the acquisition of agricultural real estate (with certain reservations) do not apply to real estate located within the administrative boundaries of cities if:
- in relation to the agricultural property to determine the location of a residential investment ,
- in relation to the agricultural property, a resolution was adopted to determine the location of an accompanying investment ,
- the agricultural property is sold for the purpose of implementing a housing investment or an accompanying investment.
The third case is particularly interesting, as it allows the acquisition of agricultural property without the consent or preemption of the National Support Centre for the Development of Agricultural Property (KOWR) if the investor is only planning to obtain a resolution establishing the location of a residential or associated investment. The purpose of this provision is to streamline the implementation of residential investments on agricultural properties located within the administrative boundaries of cities. Therefore, it does not apply to agricultural properties within rural communes. The location of agricultural property within the administrative boundaries of a city is determined on the date of the event leading to the acquisition of ownership of the property.
At the same time, we note that the UKUR grants additional powers to the National Support Centre for Agriculture ("KOWR") to verify whether an investment under the Special Housing Act has actually been implemented. KOWR has been granted the right to submit a notarial deed declaring the acquisition of such real estate in cases where:
- Within two years of concluding the sales agreement for agricultural real estate located within the administrative boundaries of cities, for which a resolution has been adopted establishing the location of a residential or associated investment, the buyer has not obtained a building permit in accordance with that resolution. In this respect, the architectural and construction administration body is obligated to forward the final building permit to the appropriate KOWR local branch;
- within 2 years from the date of conclusion of the sales agreement for agricultural real estate located within the administrative boundaries of cities, the sale of which is for the purpose of implementing a residential investment or an accompanying investment, the investor has not obtained the assumed resolution and has not obtained a building permit in accordance with this resolution,
- within 5 years from the date of obtaining the final decision on the building permit, he did not complete and put into operation:
- In the case of an investment consisting of more than one residential building - at least 50% of the residential buildings included in the investment or
- Accompanying infrastructure.
While UKUR permits the purchase of agricultural property, it also establishes relatively short deadlines for implementing the investment under the Special Housing Act. Under point 3, the assessment of whether the five-year deadline has been met is based on the provisions of the Building Code – this condition will be met if the building can be used within that timeframe in accordance with the Building Code.
The deadlines referred to above may be extended by the KOWR at the investor's request, but no longer than one year from the deadline's expiry date, if they could not be met for reasons beyond the investor's control. In this case, the burden of proof rests with the investor and is subject to KOWR's review. It's worth emphasizing that submitting a declaration of purchase of agricultural real estate is a right, not an obligation, of the KOWR.
An agreement transferring ownership of agricultural real estate based on the exception discussed here should include this information. Furthermore, the notary preparing the agreement is obligated to forward a copy of the notarial deed to the appropriate director of the KOWR local branch within 14 days of the agreement's conclusion. Therefore, KOWR receives this information and undoubtedly verifies whether the investor is pursuing the investment.
Therefore, if an investor fails to obtain a resolution on the location of a residential investment or a building permit within two years, or fails to complete the investment under the Special Housing Act within five years, the KOWR has the right to acquire the property. The acquisition is made at a price determined based on the property's market value, as defined in real estate management regulations, as of the date the KOWR submits the declaration of acquisition.
The above rules apply accordingly to the acquisition of shares or parts thereof in co-ownership of real estate.
It is worth recalling that the developer lex also introduces an exclusion of the application of the Act on the Protection of Agricultural and Forest Land in relation to residential investments or accompanying investments located within the administrative boundaries of cities.
In summary, the developer lex introduced not only a special procedure for implementing residential investments but also derogations from the Act on Shaping the Agricultural System, intended to facilitate the acquisition of agricultural properties for this type of residential investment. However, the introduced deadlines for obtaining a resolution, building permit, or project completion appear to be so short that investors are not very interested in applying these regulations.
Next week, we will tell you what changes the government is planning to make to the special housing act in connection with the spatial planning reform.
Together with Rzeczpospolita and the Polish Association of Developers, we invite you to a training session entitled "The Development Industry in the Face of the New Development Act." The aim of the training is to discuss the changes that developers must prepare for starting July 1, 2022, following the entry into force of the new act. Details can be found at konferencje.rp.pl .
This article is for informational purposes only and does not constitute legal advice.
Legal status as of March 14, 2022
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