This morning's alert opens a series in which we will discuss issues related to the implementation of housing investments. In particular, we will analyze the draft law on the protection of the rights of purchasers of residential premises or single-family homes and on the Developer Guarantee Fund. According to the agenda, the report on the work of the Infrastructure Committee on this matter may be considered by the Sejm as early as April 14-15. However, we want to begin by presenting the regulations already in force, namely, discussing the issue of usable floor space of premises and buildings, including apartments.
Calculating and determining the usable floor area of a property is an extremely important issue for every owner. It is crucial not only for calculating the sale price but also influences the share of the common property and the basis for calculating property tax. This issue should also be of no less interest to building owners, as the usable floor area, among other factors, determines the property tax rate.
Article 3, Section 3 of the Act on Ownership of Premises states that a unit owner's share in the common property corresponds to the ratio of the usable area of the unit, including the area of its associated rooms (e.g., storage units or basements), to the total usable area of all the units, including their associated rooms. This means that the higher the share, the more the owner must contribute to the housing community budget.
Another important consequence of this regulation is that the measurement of the area in each unit should be conducted using the same method – to ensure that everyone shares equitably in the maintenance of the common areas. In practice, this is not always the case, and problems often arise in older buildings where the share entered in the land and mortgage register is disproportionate to the size of the apartment. There are ways to resolve such situations, but they require the cooperation of the housing community/cooperative and all owners.
The share (calculated based on the usable area) also influences the tax rate. Pursuant to Article 3 of the Local Taxes and Fees Act, the tax liability rests with owners to the extent corresponding to their share in the common property. This means that the larger the share, the higher the property tax. In the case of buildings, the larger the usable area, the higher the tax, and this area should be measured along the internal length of the walls on all floors, excluding stairwells and elevator shafts.
Now that we've outlined why usable floor area is so important, we'll move on to discussing how it's calculated. It's important to note that there's no single definition of usable floor area in Polish law. This is accepted by both public authorities and courts. This was noted by, among others, the Supreme Administrative Court, which stated that "one apartment should have a single floor area," but "currently, depending on the purpose for which the usable floor area of a property needs to be determined, its size may vary" (judgment of February 24, 2020, file reference II OSK 3795/18). Therefore, we'd like to point out two applicable definitions, the application of which may lead to different floor area measurement results.
The first definition is used for the purposes of the land and building register. According to its wording, the usable floor area of a premises is:
• the area of all rooms in the premises, in particular rooms, kitchens, pantries, hallways, alcoves, halls, corridors, bathrooms and other rooms serving the tenant's residential and economic needs , regardless of their purpose and method of use,
the area of balconies, terraces and loggias, mezzanines , wardrobes and storage spaces in walls, laundry rooms, drying rooms, bicycle rooms, attics, basements and rooms intended for storing fuel is not considered to be the usable area of the premises
The second definition used for the purposes of a construction project is that:
- the usable area of the building [and similarly of the premises] is reduced by the area of the horizontal cross-section of all internal building partitions, passages and openings in these partitions, passages in external partitions, balconies, terraces, loggias, internal stairs and landings in multi-level residential premises, unusable attics,
- the usable area of the building is increased by the area of: mezzanines, winter gardens and built-in wall wardrobes, storage rooms and dressing rooms.
It's worth noting that these definitions agree that usable floor area excludes balconies, terraces, and loggias, but they say something completely different when it comes to mezzanines. Unfortunately, legal interpretation methods don't help resolve these discrepancies, and ultimately, much depends on the circumstances of a specific case.
It is also worth pointing out that in the case of both definitions, the area should be calculated: (i) in square meters with a precision of two decimal places and (ii) in the case of rooms: with a height equal to or greater than 2.20 m should be included in the calculations in 100%, with a height equal to or greater than 1.40 m but less than 2.20 m – in 50%, with a height less than 1.40 m should be omitted completely.
Both definitions also refer to the Polish Standard, with the former referring to the standard "suitable for determining and calculating surface and volume indicators in construction," while the latter explicitly states that the PN-ISO 9836 standard should be used. It's worth noting that until September 18, 2020, this was the Polish Standard PN-ISO 9836:1997, while for construction designs submitted in accordance with the amended provisions of the Construction Law, it is PN-ISO 9836:2015-12. Against this backdrop, many discrepancies and uncertainties arise, and today's alert is too short to discuss them. However, if you would like to discuss these issues further, please contact us.
In summary, Polish law lacks a single, overarching definition that would ensure consistency in calculating the usable area of buildings and premises, and the definition depends on the intended purpose. In our practice, we encounter various calculation methods, and much depends on the arrangements with the surveyor who measures the area of the premises or building.
Today we invite you to read another alert in which we will take a closer look at the proposed provisions of the new development act, which will introduce a new type of contract into civil law called a reservation contract.
This alert is for informational purposes only and does not constitute legal advice.
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