On December 16, 2020, the Sejm passed an act on the settlement of the price of premises or buildings in the price of real estate sold from municipal real estate resources , referred to as the "Premises for Land Act." It specifies the principles under which real estate belonging to municipal real estate resources is to be sold, with the price of premises or buildings transferred by the purchaser of the property to the municipality being settled in the real estate price.

The justification for the draft act indicates that it aims to engage the full potential of developers and other entities conducting housing investments, entities managing housing resources, as well as entrepreneurs operating in the production of building materials and construction works, in improving housing availability.

The aim of the Act is to reduce barriers to investment activity and increase its scale by expanding access to real estate with investment potential for all interested entities and supporting local governments in implementing their tasks, including housing policy, which will contribute to both increasing the availability of housing for those in need and the availability of infrastructure, which will have an impact on the quality of life and residence of members of the local community.

The Act defines an investor as an entity that applies for the purchase of real estate from the municipal real estate resources, with the price of the real estate being included in the price of the premises or buildings transferred by that entity to the municipality.

The municipal council will decide on the disposal of real estate from municipal resources through a resolution, accompanied by an appraisal report specifying the value of the property, prepared by a real estate appraiser. The resolution will specify: the minimum and maximum number and usable area of ​​premises or buildings, their intended use, minimum standard, location requirements, and the price per square meter of ^usable area of ​​the premises or building.

The requirements regarding the location of premises or buildings intended to be transferred by the investor to the municipality under the "premises for land" settlement are to include an indication that the premises or buildings may originate: (i) exclusively from an investment, (ii) from an investment or a project other than an investment, or (iii) exclusively from a project other than an investment .

The total price of the premises or buildings intended to be transferred by the investor to the municipality as part of the settlement cannot be higher than the value of the real estate covered by the resolution specified in the valuation report.

The property will be sold through an open tender organized by the commune head (mayor, city president) responsible for managing the municipal real estate holdings from which the property being sold originates. The act also specifies detailed information that must be included in the tender announcement and the investor's bid.

The difference between the price of the property obtained in the tender and the price of the premises or buildings that are to be transferred to the municipality under the "premises for land" settlement is subject to monetary payment.

As indicated in the justification of the draft act, despite existing legal regulations, the participation of municipalities in the development of their land for residential purposes is very low.

The Act will certainly stimulate the development of cooperation between municipalities that own significant amounts of land and which, to a large extent, have all the necessary infrastructure to use the land for construction purposes, and economic entities that have the potential to carry out construction works.

According to the draft law, it would enter into force on April 1, 2021.

The bill has now been submitted to the Senate for consideration. We will be monitoring its progress and will certainly provide more details as soon as the final text is known.

Aleksandra Jastrzębska

Legal Counsel
+48 514 585 772 | a.jastrzebska@kglegal.pl