Today's article from the series "Tuesday Mornings for Construction Workers" will present the right of pre-emption applicable in the area of the capital city of Warsaw, which is regulated in Article 111a of the Act of 21 August 1997 on real estate management.
Warsaw, as the capital of Poland, attracts the attention of both domestic and foreign investors. Infrastructure development, innovative construction projects, and a dynamic real estate market make the city a hub for many business ventures. However, to maintain a balance between development and protecting the interests of residents, legislation has introduced unique solutions, including the right of first refusal, which is crucial for the local real estate market.
Pursuant to Article 111a of the Real Estate Management Act, the Capital City of Warsaw and the State Treasury have preemptive rights to purchase real estate located within its borders. However, the key issue is when the State Treasury or the Capital City of Warsaw has preemptive rights to sell the following rights and claims:
- ) rights and claims specified in the Decree of 26 October 1945 on the ownership and use of land within the area of the capital city of Warsaw (Journal of Laws, item 279 and of 1985, item 99), i.e. the so-called Warsaw Decree;
- claims specified in Article 214 (i.e. so-called recourse claims);
- the right of perpetual usufruct established as a result of the realization of the claims referred to in points 1 and 2.
However, the legislator has introduced exceptions to the application of this right of pre-emption, indicated in Article 109, paragraph 3, points 1 and 2. The above means that the pre-emption will not apply in the case of:
- sale of real estate or perpetual usufruct rights to persons who are close to the seller;
- sale of real estate or perpetual usufruct rights between legal entities belonging to the same church or religious association.
The pre-emptive right is generally exercised by the Mayor of Warsaw. However, in a situation where the above rights and claims concern State Treasury real estate managed by the minister responsible for construction, spatial planning and development, and housing, or in relation to which ownership rights are exercised by a voivode, the National Support Centre for Agriculture, or the Military Property Agency, the pre-emptive right is exercised by the relevant minister, voivode, the National Support Centre for Agriculture, or the Military Property Agency.
It should be noted that Article 111a, Section 1 of the Real Estate Management Act grants the right of pre-emption not only to the capital city, but also to the State Treasury. Therefore, in the case of State Treasury land, the President of Warsaw (or the relevant minister, voivode, National Support Center for Agriculture, or Military Property Agency) exercises the right of pre-emption on behalf of the State Treasury as the authority responsible for managing State Treasury real estate, performing government administration tasks.
To exercise the right of first refusal referred to in this article, the authorized entity must submit a declaration of its exercise in the form of a notarial deed within one month of receiving notification of the content of the sales agreement. This notification is prepared by the notary who prepared the sales agreement. It is also worth noting that the purchase price of the property upon exercising the right of first refusal corresponds to the price agreed in the sales agreement entered into by the previous owner and the original purchaser.
For Warsaw residents, the right of first refusal means greater certainty about the development of their city. It also provides them with the assurance that decisions regarding property acquisition are made with their interests in mind. Furthermore, this right can influence real estate prices, which can be crucial for those seeking housing or running a business in the capital. In light of the above, the right of first refusal in Warsaw is a crucial element of real estate market regulation, aimed at ensuring a balance between the city's interests and the needs of its residents. It is a tool that allows the city to effectively manage the development process while maintaining flexibility in investment decisions.
In the next article, we'll present another topic related to pre-emption rights and their exclusions – this time in the area of agricultural real estate. We also encourage you to follow our publications, which are available on our website.
This article is for informational purposes only and does not constitute legal advice.
Legal status as of May 14, 2024.
author:
