Works on a draft bill on the transformation of joint perpetual usufruct to land for residential purposes into co-ownership are currently pending. Pursuant to the bill, an apartment block dweller or a tenement house dweller, who is a holder of joint perpetual usufruct, by virtue of the law, will acquire the co-ownership right and will no longer be required to obtain a respective administrative decision.
In its reasons, the draft maintains that current legislation, i.e. the Act of 29 July 2005 on the transformation of the perpetual usufruct into the ownership title fails to guarantee the owners of premises in apartment blocks an actual possibility to transform the perpetual usufruct into ownership, since, in practice, in the absence of consent of all the joint perpetual usufruct right holders for such a transformation, it will take years until the case is finally resolved in court.
The source of problems are both the provisions which govern the essence of the perpetual usufruct and the regulations on principles of disposal of joint property and undertaking acts which exceed the scope of ordinary management.
The draft assumes the transformation of the perpetual usufruct to land developed for housing needs, which is an appurtenant right to the title of separate ownership of premises or to a share in the ownership of a building will become effective on 1 January 2017.
At the same time, the new co-owners of land will be obliged to pay a transformation fee – basically for a period of 20 years – charged for. the acquisition of the ownership title. The fees are to compensate the former land owners, i.e. the State Treasury or a relevant self-government units for a loss of profits which would otherwise be earned by them under perpetual usufruct. The draft also provides for a possibility of a discounted fee.
It should be, furthermore, pointed out that the bill prohibits to establish perpetual usufruct to land for multi-family housing investments and to establish a separate ownership title to premises with an appurtenant right being a share in perpetual usufruct to land with regard to real properties intended or used for housing purposes.
The draft bill has not yet been submitted to the Sejm. It is therefore difficult to predict if perpetual usufruct will be effectively transformed into co-ownership on 1 January 2017 or not and whether the principles of transformation set out in the draft will be passed by the Parliament without any amendments.
Author: Konstancja Paczkowska, Lidia Wesołowska