Amendment to the Construction Law – transfer of the building permit without the seller’s separate consent

On January 23, 2020, the Sejm (the Polish lower house of the parliament) has adopted an act amending the Act – Construction Law and some other acts.

The amendment adopted by the Sejm provides, among other things, for simplifying the rules for transfer of a building permit to a real estate buyer.
Pursuant to the regulations in force to date, the acquisition of real estate together with a building under construction does not automatically result in the acquisition of building permit decision. To obtain the transfer of such a decision it is necessary to obtain a separate consent of the current investor (usually the seller). This is usually stipulated by provisions included in the sales contract.

The amendment to the provisions of the Construction Law in the discussed scope excludes the need for a separate consent of the buyer of the property covered by the building permit after the one issued to the current investor who is the seller of the property. This means that the purchaser of the property where construction works are carried out covered by the building permit will not have to obtain the seller’s separate consent to transfer the decision. However, it will still be necessary to obtain a decision of the architectural and construction administration authority confirming the transfer of the decision to the buyer. In addition, the simplified procedure for transferring a building permit will not apply if the seller of the property is not the addressee of the building permit, e.g. in the event of an investment being carried out by a substitute investor. In such a situation, the buyer will be obliged to obtain a separate consent of the current investor and present it to the authority along with the application for the transfer of the building permit.

Determining the addressee of a building permit decision is an important element of examining the legal status of real estate as part of due diligence prior to the asset deal or share deal transaction in the real estate market.
Please feel free to contact our Law Firm to get acquainted with legal advice on real estate transactions and construction projects.