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Right to Use Real Property for Building Purposes Is of Funda- Sentation Required Under Law

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Right to Use Real Property for Building Purposes Is of Funda- Sentation Required Under Law Polish Construction Review – Issue No. 1 (106) Friday, 8 January 2010 lation establishes the right to use real proper- ty for building purposes under the Law, but only such property rights and such contrac- tual relations which explicitly encompass ri- ghts to perform building works. This, if a title of ownership held by an investor does not en- compass the right to perform building works, Right to use real property for it should be presumed that the investor does not have the right to use the real property for building purposes building purposes and the investor cannot in compliance with law submit such the repre- The issue of the right to use real property for building purposes is of funda- sentation required under law. Meanwhile, if mental importance from the perspective of the building process as well as the the investor nevertheless submits such a re- broader concept of the investment process. Despite the gravity of the insti- presentation, he exposes himself to penal lia- bility and the possibility of the reopening of tution on the boarder of civil law and administrative law, Construction Law of proceedings for the issuance of building per- 7 July 1994 (hereinafter referred to as the “Law”) regulates it to an exceptional- mit and, as a consequence, the annulment ly limited extent, dedicating to it a definition in the dictionary contained in the of the permit. Law and referring to the discussed institution in providing guidance on regula- Thus, for the investor to be able to submit tions relevant to other concepts. a representation in compliance with law, on the right to use real property for building purposes, the following two prerequisites In line with Art. 3.11 of the Law, whenever Acting by virtue of the delegation con- must be jointly fulfilled: the Law uses the term “the right to use real tained in Art. 32.5 of the Law, the Minister The investor must hold the legal title to property for building purposes”, it is refer- of Infrastructure issued an Ordinance of real property under a property right or ring to a legal title arising under the right of 23 June 2003 on templates for: building per- a contractual relation ownership, perpetual usufruct, administra- mit application, representation on the held The above legal title must encompass the tion, limited rights in property, or a contrac- right to use the real property for building right to perform building works. tual relation providing for rights to perform purposes, and building permit decision. In Polish law, the catalogue of property ri- building works. Therefore, there is a prescribed form and wor- ghts is a closed catalogue, meaning that pro- Pursuant to Art. 4 of the Law, any person ding for the representation on the held right perty rights can be established only by way of can have the right to build-up real property as to use the real property for building purpo- provisions entered into a statute; they cannot long as the person provides proof of his right ses, required under Art. 32.4.2 and Art. 30.2 be established as part of the freedom of con- to use the real property for building purpo- of the Law. Such representations submitted in tract. At present, in addition to ownership ses, and as long as the person’s building plans the course of proceedings to be issued a buil- and perpetual usufruct, property rights inc- are compliant with the relevant regulations. ding permit or together with the submission lude the following limited rights in property: Under the Law, an investor must submit of a notice of building works not requiring usufruct, easement, pledge, cooperative pro- a representation on the title under which a building permit should be compliant with perty right to a dwelling, and mortgage. he holds the right to use the real property the templates provided in the abovementio- Of course, a mortgage as a limited property for building purposes together with the bu- ned Ordinance. right established to secure a debt on real pro- ilding permit application (Art. 33.2.2 of the Yet, the institution of the right to use real perty and a pledge as a limited property right Law) and together with the notice of buil- property for building purposes is a much established to secure claims with movables ding works not requiring a building permit more complex concept that could be inter- and rights do not comprise titles of owner- (Art. 30.2 of the Law). preted under the provisions of the Law. As ship under which one would be conferred the Pursuant to Art. 32.4.2 of the Law, the sub- mentioned earlier, pursuant to the Law’s de- right to use real property for building purpo- mission of the representation, under the pain finition “the right to use the real property for ses. Such a title can arise, and as a rule will of penal liability, on the held right to use the building purposes” means a legal title confer- arise, under title of ownership as the broadest real property for building purposes is a ne- red under the right of ownership, perpetu- and fullest right of property. cessary prerequisite for the investor to be al usufruct, administration, limited right in In the case of the right of ownership, re- issued a building permit. Thus, on the con- property, or a contractual relation providing strictions on the right may arise only by vir- trary, the failure to submit such a represen- for rights to perform building works. tue of spatial planning or zoning regulations, tation comprises a barrier to the issuance of In the above scope, one should look at the and from general or individual administrati- a building permit, and if a building permit is conjunction contained in the above provi- ve acts. issued to an investor even though he does not sion, which refers to the legal title to a real In the case of the right of perpetual usu- submit such a representation, it may be re- property arising under a defined property ri- fruct, the rights of the perpetual usufructu- garded as a premise for a gross violation of ght (ownership, perpetual usufruct, limited ary will be determined by the manner the law under Art. 156.1.2 of the Polish Code of right in property) or from a defined contrac- real property can be used, which should be Administrative Proceedings, meaning that tual relation providing for rights to perform defined in the legal act establishing the per- the issued building permit is effectively ren- building works. This means that not every petual usufruct right or the substance of the dered null and void. property right and not every contractual re- legal action by way of which the real property PMR 1 Friday, 8 January 2010 Polish Construction Review – Issue No. 1 (106) was ceded under perpetual usufruct. In the mited rights in property and, for example, in pairs and only to that extend would the lessee case of the right of perpetual usufruct, often the case of an easement of passage the enti- be able to say he holds the right to use the real the perpetual usufructuary’s rights of use are ty with rights under the easement will not property for building purposes, unless these restricted in the extent the real property can have the right to build a road, unless such rights are broadened in scope under the pro- be used or can be built-up or spatially plan- a right is explicitly provided for in the agre- visions of the lease agreement. ned. Very often, there is a material differen- ement establishing the real easement. This is This article provides only a very general ce between the intended by the usufructuary because systemically the construction and overview of an exceptionally complex insti- building process and the effective in this sco- maintenance of installations necessary to tution of the right to use real property for pe administrative law provisions and civil perform the easement rests with the owner building purposes. Given the exceptional im- law perpetual usufruct regulations. As a con- of the real property encumbered with the portance of the institution, special attention sequence, the executed building works are in easement. Thus, this types of issues need to should be paid to its complexity, while issu- breach of the wording of the right of perpe- be considered within the context of speci- es related to it should be subject to a deta- tual usufruct and can serve as grounds for its fic cases and it is recommended that the ri- iled analysis on a case-by-case basis, in order annulment by the State Treasury or local go- ght to perform building works is guaranteed to ensure a safe and sure-footed investment vernment authorities. Therefore, the perpetu- under the agreement under which the limi- process founded on that institution, and then al usufructuary should be especially mindful ted right in property is established. At pre- the safe and sure-footed use of the erected of the wording of the held right of perpetual sent, work is underway to implement into the building structure. usufruct conferred onto him, and how it can Polish legal system another limited right in be enforced. property in the form of the right to build-up/ Beyond the above-excluded mortgage and develop, whose very essence would encom- pledge, every remaining limited right in pro- pass the right to build or use a defined buil- perty can encompass in its wording the right ding structure. to perform building words and, thus, usu- In the case of contractual relations (e.g.
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