Legal Highlights for Real Estate – November 2023

1. Crucial changes in inheritance law enter into force – inheritance unworthiness, limitation of the circle of heirs.

On 15 November 2023, the amendments provided for in the Act of 28 July 2023 amending the Act – the Civil Code and certain other acts (Journal of Laws 2023, item 1615) (the “Amendment”) enter into force. The Amendment provides for a number of significant changes in inheritance law, including the limitation of the ‘third group’ of heirs and the broadening of the catalogue of situations allowing an heir to be declared unworthy of inheritance.

The Amendment introduces changes to the content of Article 934 of the Civil Code regarding statutory inheritance in the case where the testator’s grandparents are appointed to the inheritance. In a situation in which they do not live to see the opening of the inheritance, the share of the inheritance falling to them will fall to their children in equal parts (in the case of deceased children of grandparents, to their children, and in the absence of children and grandchildren of a deceased grandparent, to the remaining grandparents in equal parts). Further descendants will be excluded from the succession. The amendment aims to reduce the length of proceedings and the need to search for and summon the testator’s further relatives.

The Amendment also added two new grounds of unworthiness of inheritance to the Civil Code. It will be possible to apply the introduced provisions of Article 928(1)(4) and (5) of the Civil Code for events constituting grounds for declaring an heir unworthy of inheritance occurring after 15 November 2023, i.e. the possibility of declaring an heir unworthy of inheritance was introduced in the case of:

• persistent evasion of an obligation to fulfill the alimony obligation towards the testator as determined by a court decision, an agreement concluded before a court or other authority or any other agreement;
• persistent evasion of the duty of care towards the testator, in particular arising from parental authority, custody, the exercise of the function of a foster parent, the matrimonial duty of mutual assistance or the duty of mutual respect and support between the parent and the child.

In addition to the above-mentioned broader changes, among other things, the need to obtain court authorization for the parent to reject an inheritance on behalf of a child in statutorily defined situations will be excluded. The purpose of the Amendment is to increase the protection of heirs as well as to increase the efficiency of the succession process.

2. Amendments to the Act on the Formation of the Agricultural System

Last month, an amendment to the Act of 11 April 2003 on the Formation of the Agricultural System (“UKUR“) entered into force, which includes a number of key changes. In particular, it should be borne in mind that from 5 October this year:

• The provisions of the UKUR do not apply to agricultural properties within which the agricultural area (użytki rolne) is less than 0.3 ha. Previously, agricultural properties of up to 0.3 ha were excluded from the UKUR provisions and the size of the area of agricultural land was not relevant;
• The National Support Centre for Agriculture (“KOWR“) shall have priority to exercise the right of pre-emption in the event of the coincidence of this right with the right of pre-emption provided for in other regulations;
• The definition of a close relative also includes parents of the spouse, stepmother and stepfather;
• The list of cases allowing the acquisition of agricultural property without the need to obtain a permission of the Director General of the KOWR is:
  • extended to cases of transformation of an entrepreneur or a civil partnership into a commercial company on the basis of the provisions of the Commercial Companies Code. It should be borne in mind that acquisition of agricultural property in case of e.g. a merger of commercial companies is still related to the possibility of the KOWR exercising its acquisition right (prawo nabycia);
  • reduced by entities such as the family foundation or its beneficiaries;
• the catalogue of cases in which obligations arising from the acquisition of agricultural property do not have to be fulfilled has been extended.