Legal Highlights for Real Estate – January 2024

1. NSA: retroactive application of provisions of the Act on the reprivatisation special commission possible

In a resolution of 11 January 2024, the Supreme Administrative Court (case file I OPS 3/22) adopted the position that the Commission for the reprivatisation of Warsaw properties (“the Commission”) may overrule a reprivatisation decision due to the premise of the occurrence of consequences grossly contrary to the public interest, even if it occurred prior to the entry into force of the Act establishing the Commission.

The resolution is related to the proceedings before the Commission, which overturned the reprivatisation decision of the President of the Capital City of Warsaw of 2009 on transfer of a building with communal tenants of 21 flats who, as a consequence of various actions, were forced to leave the occupied premises.

The Act allows the Commission to revoke a reprivatisation decision if, as a consequence of its issuance, there have been consequences grossly contrary to the public interest or the purpose for which the perpetual usufruct was established, and, in particular, when there is obstruction of the use of the premises by means of unlawful actions such as threats or acts of violence.

The fact that the described premise may constitute grounds for revoking a reprivatisation decision, even if it occurred before the Act entered into force, i.e. in 2017, is of particular importance, bearing in mind that a large number of them were issued before that time.

2. A structure that does not require earthworks when being moved or dismantled does not have to be categorised as a building

The classification of a given object as a building within the meaning of the construction law has given rise to many doubts regarding the understanding of the attribute of permanent connection to the ground, particularly in the case of unconventional solutions of investors.

The Supreme Administrative Court, in a judgement of 30 November 2023 (ref. III FSK 748/23), ruled on the categorisation of a building object, being a structure within the meaning of the construction law, for the purposes of property taxation under the Act on Local Taxes and Fees

The definitions of a building in the two aforementioned Acts contain the same structural elements. One of them is the ‘permanent connection to the ground’ of the object in question, which, according to the NSA, includes:

i) the possession by the building of foundations below ground level (buried in the ground),
ii) a permanent (i.e. stiff, stable, continuous, unchanging) connection of the object with those foundations.

The NSA pointed out that an object whose bottom level of the foundation is at ground level and whose relocation or demolition does not involve earthworks cannot be described as permanently connected to the ground.

The court emphasised that the disconnection of an object from the foundations, resulting in significant changes to the entire structure and sometimes leading to damage or destruction of the section above the foundations, eliminates the possibility of treating the disconnected element as a separate building.

Consequently, a temporary structure cannot be considered as a building, given that it is intended to be relocated or is not permanently attached to the ground. On the other hand, it should be borne in mind that a building intended to be demolished (pending demolition) may be considered as a temporary building.