The Ministry of Infrastructure and Construction prepared a draft of the Act Amending Certain Acts in Connection with Simplifying the Investment and Construction Process. As assumed by its authors, the draft, referred to as the “Investment Act,” is to be a pilot piece of legislation preceding an Urban Planning and Construction Code and put into practice some of the latter’s solutions. Taking into consideration that the reform introduces serious amendments concerning issuance of decisions on development conditions, under which presently nearly a half of all construction investments are realized, investors must prepare for far-reaching and unfavourable changes.
In the first place, in the light of the draft reform of the Construction Law and provisions on spatial planning, decisions on development conditions will be issued only for built-up areas – as specified in a resolution of the municipal council and limited to actually developed land. In the resolution, the municipal council will only confirm what areas in the municipality are actually developed and will not be in a position to allocate any specific areas for development. In the absence of a local spatial plan, implementation of investments outside the built-up area will be limited to a catalogue of activities which do not require issuance of a decision on development conditions, such as renovation, reconstruction not affecting the object’s use or change to existing homestead buildings. The prepared amendment provides for the requirement to obtain a decision on development conditions for each land development change in built-up areas which involves implementation of construction works requiring a building permit.
Serious consequences for investors
Under the draft reform, building permits issued under decisions on development conditions will cover the area for which the development conditions were specified – as a result, the scope of the application for a building permit will have to be identical to the scope of the decision on development conditions. The amendment will also affect the terms of transfer of a decision on development conditions to other persons. Today, the authorities are obliged to make such transfer if the other person accepts all the conditions set out in the decision. However, according to the proposed reform, transfer of a decision on development conditions will be possible only to entities that either own or are perpetual usufructuaries of all the properties making up the building plot covered by the decision. The significance of these amendments is immense since they will prevent transfers of a single decision on development conditions to several investors. Until now, there has been a practice of procuring a single decision on development conditions for a few building projects and its subsequent assignment to a number of investors. As a result, such investors could obtain separate building permits for each investment. Such practice enabled realization of many construction investments despite the general absence, in the Polish context, of local spatial development plans. Moreover, under the proposed reform, upon completion of the investment for which the decision on development conditions is issued, such decision will be “exhausted,” which means that no other building projects may be realized on its basis. In other words, the legislator plans to remove the possibility to implement the decision on development conditions in stages. Even now it should be remembered that analogous solutions are included in the draft Urban Planning and Construction Code.
Entry into force of the proposed amendments
From the practical point of view, the schedule of entry into force of the proposed amendments is crucial. The reform will not apply to the currently pending procedures for a decision on development conditions. The validity period of such decisions will be three years from the date of entry into force of the Act. A three-year period was also prescribed for the delimitation by the municipality of built-up areas. Until the entry into force of such resolution, the reform permits to apply the previous provisions on the issuance of decisions on development conditions. However, in the event of non-adoption by the municipal council of the resolution within three years from the entry into force of the amendment, in areas not covered by a local spatial plan it will only be possible to carry out renovation works of the existing buildings.
In other words – development of investments following the entry into force of the amendment will no longer depend on investors’ capital but on the efficiency of legislative works of municipal councils. This situation, taking into consideration the time and cost consumption of enactment of urban planning regulations, may lead to uneven development of investments in different parts of Poland. In view of the above, it may be expected that many investors will try to obtain a decision on development conditions before the entry into force of the legislative reform.