Amendments in the Construction Law

The Act of 13 February 2020 amending the Construction Law and certain other acts (the Construction Law “Major Amendment”) entered into force on 19 September 2020. The changes, which are the result of many months of work, simplify the construction process and make the interpretation of the law easier. They also introduce a number of solutions that were much needed from the practical point of view and which have long been proposed by investors and developers.

This summary presents the most significant changes from the perspective of the practice of real estate law.

1. Building permits and occupancy permits can no longer be declared invalid after five years

In accordance with the new Article 37b and Article 59h of the Construction Law, it will no longer be possible to declare invalid:

• a Building permit – after five years from its delivery or announcement;
• an Occupancy permit – after five years from the date it became final.

If following the lapse of above five years period an application for invalidation of a building permit or occupancy permit will be filed, a public authority will only state that a challenged decision was adopted in breach of the law and indicate why the decision might not be invalidated. Until now, it was possible to question the validity of a decision even many years after the completion of an investment undertaking. The current provisions seek to create a more stable situation for investors and to provide greater legal certainty. Determining that a decision was issued in breach of the law will not affect its validity; it will only make it possible to seek damages.

The provisions do not explicitly state whether they are applicable to decisions issued before 19 September 2020. Thus, following the literal wording of new law, it can be assumed that, as a rule, from 19 September 2020, it will no longer be possible to invalidate a building permit delivered or announced before 19 September 2015 or an occupancy permit that became final at least five years earlier.

2. Change in the rules for the legalisation of unauthorised construction; introduction of a simplified legalisation procedure

The amendment creates a uniform and combined legalisation procedure for construction objects (in Polish: obiekty budowlane) erected or under construction:

• without a necessary building permit;
• without notification filed to a public authority prior to commencement of construction works; or
• despite a public authority’s objection to a notification.

Until now, the law provided for two separate procedures, differing in terms of documentation and fees required to undertake legalisation procedure.

The amendment also introduces a simplified legalisation procedure that is applicable to construction objects that were completed at least 20 years ago (new Article 49f). The scope of the documentation required to initiate the simplified legalisation procedure has been greatly reduced – an investor submits only:

• a declaration on the right to use the property for construction purposes;
• a post-completion land survey of the construction object; as well as
• a technical evaluation indicating whether or not the technical condition of the object poses a risk to human life or health and whether it can be used safely in accordance with the existing or intended use of the object.

What is important is that there is no requirement to pay a legalisation fee and that, under the simplified legalisation procedure, the public authority will not verify whether the construction object is in line with the local zoning plan or the zoning decision. However, this simplified procedure will not apply if a public authority issued a demolition order or a decision to cease construction work within last 20 years.

Under the new wording of Article 52, the investor is responsible for the performance of obligations relating to unauthorised construction works. Such obligations will be imposed on the owner or property manager only if construction work has been completed or it is no longer possible for the investor to perform such obligations.

3. Modification of rules on penalties for the illegal use of a construction object

Until now, a penalty for commencement of use of a construction object or its part in breach of the provisions of the Construction Law (in particular if an occupancy permit was not obtained) could have been imposed only once.

The amendment introduces provisions which:

• explicitly state that a building may not be used without obtaining an occupancy permit or notifying the authorities of the completion of construction works; and
• allow the authorities to impose multiple penalties on an investor or owner for as long as the violation continues, i.e. if illegal use does not cease despite the public authority’s decision and provided that at least 30 days have passed since the last penalty was imposed.

The first penalty for illegal use may only be imposed after the ineffective lapse of 60 days from the delivery of a notice to the investor or owner informing of the obligation to obtain an occupancy permit or to file a notification of the completion of construction works.

4. Expansion and clarification of the catalogue of construction works that do not require a building permit or notification

The amendment clarifies the types of construction objects and categories of construction works that require: (i) a building permit or (ii) notifying the authorities of the planned construction works (new wording of Article 29 sec. 1–4). The previous wording of the provisions was unclear to investors due to numerous references and amendments of law which introduced many exceptions.

Consequently, the catalogue of construction works that do not require any formalities has been simplified, extended and adapted to satisfy practical needs. One of the most significant practical changes is the amended Article 29 sec. 4 point 1 subsection (a) stating that there is no requirement to obtain a building permit or file a pre-construction notification to the public authorities for the redevelopment of buildings (the construction of which requires obtainment of a building permit) if such redevelopment does not affect the external partitions or structural elements of a building, which means that performance of tenant fit-out works shall not be subject to any of the above formalities.

5. Change in the structure of a construction project

Currently, a construction project consists of a land development plan and an architectural-construction plan. As a result of the amendment, a technical plan will be treated as a separate part, which, together with the land development plan and architectural-construction plan, will comprise the construction project (new Article 34 sec. 3 of the Construction Law).

The technical plan must be prepared and handed over to the construction manager (in Polish: kierownik budowy) before construction works commence, but the investor will not be obliged to attach it to the building permit application. The technical plan will only be presented to the authorities when the investor files a notification of the completion of construction works or submits an application for an occupancy permit (amended Article 57 of the Construction Law). The aim of the amendment is to speed up the building permit issuance procedure and to make a distinction between documents which are subject to public authorities’ review and those with respect to which responsibility for their proper preparation rests solely with designers.

However, the Act provides for a transitional period of 12 months from the date of its entry into force (i.e. until 19 September 2021), during which construction projects can be submitted to the authorities in both the old and the new form.

6. Modification of the provisions on significant deviations from a construction project (requiring an amended building permit)

Pursuant to provisions of the amended Article 36a of the Construction Law, not every change to a land development plan shall be considered a significant deviation from the construction project (i.e. a deviation requiring an amended building permit). Only a change that may increase the area of the construction object’s impact beyond the plot for which the construction object was designed will be considered as such.

In the case of a change in the characteristic parameters of a construction object, a significant deviation (i.e. a deviation requiring an amended building permit) shall occur, in particular, in the following cases:

• an increase in the number of storeys;
• a change in the development area of more than 5%;
• a change in height, length or width of more than 2%.

The cubic capacity of an construction object is no longer a relevant feature.

The clarification of the catalogue of significant deviations and the introduction of a provision on technical plan deviations (new Article 36b) resulted in deletion of the catalogue of insignificant deviations.

7. Narrowing the definition of the impact of an object / limiting the number of parties to proceedings

The boundaries of the area on which a contemplated construction object has an impact are currently determined by land use restrictions (in Polish: ograniczenia w zagospodarowaniu terenu), but following the amendment they shall now be determined by land development restrictions (in Polish: ograniczenia w zabudowie terenu).

Narrowing down the definition of a construction object’s area of impact (Article 3 sec. 20 of the Construction Law), currently interpreted in courts’ rulings as a wide catalogue of nuisances, will make it possible to significantly limit and more easily identify the entities qualifying as parties in proceedings for the issuance of a building permit, which will in turn accelerate building permit issuance proceedings.

8. No requirement to obtain the consent of a previous holder of a building permit for the transfer of a building permit to a new property owner/perpetual usufructuary

As of 19 September 2020, a buyer of real estate or the right of perpetual usufruct will be able to apply for the transfer of a building permit (and, accordingly, a decision to resume construction works, an amended building permit or a demolition permit) obtained by a previous owner or perpetual usufructuary, without a consent of such holder of a permit. The new investor will only be required to submit a statement indicating acceptance of the conditions contained in the building permit and a statement on the possession of the right to use the real estate for construction purposes (new Article 40 sec. 1 and 1a of the Construction Law).

The requirement to obtain the consent of the holder of a building permit remains unchanged if the transfer of the building permit is requested by an entity that is not the owner or perpetual usufructuary. The change simplifies the building permit transfer procedure, which may also shorten the proceedings.

9. Possibility of the issuance of a building permit in a situation where construction works were performed on the basis of an invalidated building permit

The amendment clarifies whether it is possible to issue a new building permit if the previous one was revoked or declared invalid following the completion of construction works. In line with the new wording of Article 37 sec. 2 of the Construction Law, a new building permit can be issued after a building permit has expired, has been revoked or declared invalid.