The end of legal chaos? The government wants to regulate the land under blocks of flats

The establishment of perpetual usufruct of land intended for housing purposes is to return to legal circulation – according to the draft amendment, the assumptions of which were published on Wednesday in the list of government works. The related fees are to be 0.3%. land value.

This is a draft act on regulating rights to land developed by housing cooperatives, amending the Real Estate Management Act and certain other acts.

The draft amendment prepared by the Ministry of Development and Technology provides for, among others: abolition of the general ban on establishing perpetual usufruct for residential purposes. In this way, the legal status before January 1, 2019, when the Act on the transformation of perpetual usufruct of land developed for residential purposes into ownership rights, came into force is to be restored. As indicated by the Ministry of Development, this will enable the public land owner to establish a permanent legal title “in favor of an entity implementing socially and economically important projects”, while maintaining control over the implementation of a specific goal.

In accordance with the presented assumptions, the project assumes the introduction of preferential fees for perpetual usufruct established for the purposes of social housing construction and the construction of dormitories. The proposed annual fee for perpetual usufruct is to be 0.3%. land price, and the first fee for perpetual usufruct is not to exceed 10%. real estate prices. This will only apply to land put into perpetual usufruct after the new regulations enter into force.

As indicated in the assumptions of the project prepared by the Ministry of Development and Technology, the amendment is also intended to regulate issues relating to land developed by housing cooperatives. This need results from historical events. In the period of the Polish People's Republic and the first years of political transformation, cooperatives most often acquired land from the state or commune. However, the perpetual usufruct transferred to them excluded the cooperatives from using the institution of adverse possession. It was also impossible to transfer ownership of land to cooperatives under the Civil Code. As noted by the Ministry of Development, this problem concerns primarily land in Warsaw.

The Ministry of Energy and Technology also noted that some cooperatives did not submit claims for the establishment of perpetual usufruct of land and the free transfer of ownership of the buildings located on them. These solutions are provided for in the Real Estate Management Act of 1997. Moreover, as indicated by the ministry, a significant number of applications submitted in this manner remain unconsidered due to the lack of “effective instruments to prevent the inaction of authorities”.

The ministry also pointed out that some cooperatives are entitled to non-permanent legal titles to land, such as lease or usufruct, which impose additional costs on the cooperatives and their members, but “without the prospect of securing their rights to the premises.” As indicated in the assumptions, the situation of cooperatives became additionally complicated after the resolution of the Supreme Court of 2013. It follows that if a housing cooperative does not have ownership of land or its perpetual usufruct, a cooperative ownership right to the premises cannot be established.

The project also provides for clarification of regulations regarding the management of public real estate. Among others The catalog of grounds for refusing to grant perpetual usufruct of Warsaw lands – covered by the so-called by Bierut's decree – to the former owners or their legal successors. The Ministry of Energy and Technology indicated that this would eliminate the obstacle to regulating the legal status of the land due to the claims submitted.

The amendment prepared by the Ministry of Energy and Technology also envisages supplementing the catalog of real estate that constitutes the resources of the State Treasury and local government with real estate in relation to which a cooperative ownership right to the premises has been established.

It will also be possible to revoke the decision on the free transfer of ownership of real estate to a state or local government legal person if the real estate is used contrary to its intended purpose. As indicated, this will protect the interests of the public landowner.

The bill also provides for supplementing the provisions of the Real Estate Management Act regarding the provision of real estate for an indefinite period of time. It will require the consent of the relevant minister. (PAP)

gkc/ mrr/