Accelerated Building Permit Procedures

Act No. 183/2006 Sb., on landscape planning and building regulations, in effect as of 1 January 2007 (the "Building Act"), has introduced the concept of an "authorised inspector". Builders typically use the services of an authorised inspector in the accelerated building permit procedures under Section 117 of the Building Act.

Accelerated building permit procedures can basically be used for any type of structure, including those that would otherwise require full building permits, other than structures that are directly excluded from building permit procedures by land planning documents, resolutions of land planning authorities, or a special regulation (for instance, all hydro-structures under the Water Act, other than water mains, sewers, and sewerage structures which are not subject to water handling permissions).

In order to use the accelerated building permit procedures for the aforementioned structures, the builder must enter into an agreement with an authorised inspector who reviews the project design documents and procures binding concurring opinions of the relevant authorities, as well as evaluations of the persons who would be parties to the standard building permit procedure.

By using the accelerated building permit procedure, the builder can carry out the construction after delivering a mere notification to the building office. The notification must be delivered together with the design documents required under the implementing regulation and a certificate issued by the authorised inspector. With this certificate, the authorised inspector confirms that he or she has reviewed the design documents and any materials attached from the perspectives described in Section 111 (1) and (2) of the Building Act (i.e., using the criteria normally applied by the building office to assess an application for a building permit), and also confirms that the proposed construction may be carried out. He or she also certifies the design documents by adding his or her name, the issue date of the certificate, his or her signature, and a stamp with the national emblem of the Czech Republic. Finally, he or she attaches a proposed construction inspection schedule, the binding evaluations of the relevant authorities, and the evaluations of the persons who would be parties to the standard building permit procedure (Section 109 of the Building Act).

Review of the authorised inspector's certificate

The advantage of the accelerated procedure lies particularly in its promptness. A disadvantage, however, is the necessity of obtaining the binding concurring opinions of the authorities and the evaluations of the persons who would be parties to the standard building permit procedure (the "participants"). The Building Act only provides a limited number of measures with which to deal with any objections of the participants. Any objection the participants have against the construction must be assessed by the authorised inspector and discussed with the persons who raised them. The inspector's methods used to address the objections, the conclusions made, and any materials used in the process, must also be attached to the certificate. If the inspector fails to settle a disagreement between the participants, he or she submits the relevant opinions, together with the design documents and the binding opinions of the authorities, to the building office, which then provides for the settlement of the objections, issues a resolution on the objections within the scope of its powers, or resolves that the structure is ineligible for the accelerated procedure. Given its nature, the accelerated procedure should be used particularly for problem-free construction projects that involve very few participants. In our experience, however, it is also often used for more complex projects involving a large number of participants and authorities. Under such circumstances, the participants' objections may remain unsettled by the authorised inspector, or some participants unaddressed.

In such an event, the requirements for the accelerated building permit procedure would not be met, and the certificate would be issued contrary to the Building Act. Although the Building Act does not stipulate explicitly whether, and how, the certificate and the builder's authorisation to carry out construction obtained under an accelerated procedure may be reviewed, the reviewability of the certificate has been inferred by the Supreme Administrative Court (SAC), for instance, in its Judgment no. 9 As 63/2010 of 4 August 2010 and Judgment no. 1 As 72/2010-110 of 11 November 2010.

According to the SAC: "after notification to the building office, the certificate constitutes a reviewable administrative act which may be challenged by both the builder and the persons who would otherwise be entitled to be parties of a building permit procedure." 1

The two judgments referred to above failed to deal with the issues of how and when the certificate may be challenged, or whether, and how, any deficiencies of the certificate may be rectified by the building office.

The SAC only dealt with the possible means of challenging the certificate in its Judgment no. 2 As 37/2011-81 of 25 May 2011. 2 According to the SAC, the certificate of an authorised inspector constitutes a decision within the meaning of the Code of Administrative Procedure, and it was therefore necessary to determine whether regular or extraordinary remedies (such as an appeal) are permissible with respect to the certificate, or whether the certificate may only be challenged by means of an administrative petition.

Pursuant to § 81(1) of the Code of Administrative Procedure, a party may appeal a decision unless the law stipulates otherwise. Thus, inadmissibility of an appeal must be provided directly by law; the SAC holds the opinion that, alternatively, the inadmissibility of an appeal might be implied by the nature of a particular case. The SAC believes that the latter applies to the certificate of an authorised inspector. This view is based on two arguments. First, that the purpose of the accelerated building permit procedures is to provide fast and less formal proceedings and to lift some of the administrative burden off the building offices. The right to launch construction works arises when the building office is notified of the certificate; it would be illogical to permit an appellate authority to review a decision which is final and binding. An appellate procedure would have an effect opposite to the one pursued by the accelerated building permit procedure. Second, that it is impossible to determine which administrative authority could, in a particular case, be designated as superordinate to the authorised inspector, and thus, that it is impossible to determine with which administrative authority the appeal should be filed. Since the jurisdiction of the appellate authority must be derived directly from a particular statutory provision, it may not be inferred by mere interpretation.

The SAC thus concluded that a certificate issued by an authorised inspector is not reviewable via appellate procedure under the Code of Administrative Procedure, and that the only admissible remedy is an administrative court petition.

A petition challenging a decision must be lodged within two months of the date of delivery of the decision to the petitioner in writing, or in any other form stipulated by law, unless the statute prescribes a different time period.

Since the certificate of an authorised inspector is notified solely to the building office (but not to any other parties to the administrative proceedings), it may be difficult to determine the two-month period for filing an administrative petition challenging a certificate. In this context, we would mention the legal opinion contained in Judgment of the SAC no. 2 As 25/2008- 118 of 17 February 2009, according to which "even a decision of an administrative body that has not been formally duly delivered (notified to the parties to the proceedings) may become final in the case of what is referred to as 'fiction of delivery' ... If a party to the proceedings, whose rights or lawful interests or obligations are affected by the decision, was omitted in the distribution of the decision, the 'fiction of delivery' shall occur, as of the time when it is, with certainty and without reasonable doubt, ascertained that the omitted party became substantially knowledgeable of the full text of the decision, its principal identifiers and its content, to the same extent as if the decision were duly delivered to that party".

Liability for damage caused by an authorised Inspector

Still another unresolved issue that appears in the practice connected with the certificates issued by authorised inspectors in the light of the SAC's judgments, is the question of who is liable for damage caused by a certificate issued in contravention of the legal regulations that is eventually cancelled in a judicial review.

Pursuant to the relevant provisions of the Building Act, an authorised inspector is liable for any damage caused by his or her professional activity. Before initiating his or her professional activity, and over the entire duration thereof, he or she must have valid liability insurance. Since the legal regulations do not specify the minimum statutory insurance coverage of an authorised inspector, the insurance coverage depends entirely on the inspector's agreement with the builder.

Based on the aforementioned judgments of the SAC, which implies that the certificate constitutes an administrative act, we believe that it should also be taken into consideration whether, in addition to the inspector's own liability, the state's liability for damage should also apply. In the cited judgment, the SAC concluded that "an authorised inspector may act within the accelerated building permit procedures, following appointment by the Minister for Regional Development, under the conditions stipulated in the Building Act. Within the Building Act, the authorised inspector thus becomes the person who indirectly performs state administration."

According to the theory of administrative law, indirect executors of state administration are the legal entities who have been delegated limited state administration competency by law, or by a resolution based on law. Delegation means devolution or the vesting of state administration competencies within a certain scope, for which the laws mostly use the term "entrustment". (Hendrych, D. et al. Správní právo. Obecná část, 5th expanded ed. Prague: C.H.Beck, 2003. p. 404).

Pursuant to Section 3 (b) of Act No. 82/1998 Sb., on liability for damage caused in the execution of public authority, the state is liable, among other things, for damage caused by the legal entities and individuals performing state administration under a law. The cited act explicitly states that the state is liable for certain activities of notaries and executors. The question is, however, whether the state should be liable per analogiam for the authorised inspectors; this question has not yet been dealt with by the courts.

Conclusion

When considering the accelerated building permit procedure for a certain construction project and an agreement with an authorised inspector, the builder should take into account the risk that the inspector's certificate may be challenged by a third person. This is particularly true in more complex projects involving a higher number of participants which could result in considerable uncertainty over the authorisation for carrying out the construction and significantly complicate relationships with the relevant parties (such as the financing parties). Nonetheless, if the builder still chooses to use the accelerated building permit procedure, it is advisable, in light of the admissibility of the court review of the certificate issued by an authorised inspector, to deliver the certificate to all the known parties, so as to set a time limit for the risk of the court review of the certificate.

As the state's liability for damage caused by an authorised inspector remains unclear and the inspector's minimum insurance coverage has not been set forth, a builder who enters into an agreement with an authorised inspector should also pay careful attention to the amount and conditions of the inspector's insurance, and make the appropriate provisions regarding the risks in the agreement on the review of the design documents he or she makes with the inspector.

Footnotes

1 Judgment of the Supreme Administrative Court no. 9 As 63/2010 dated 4 August 2010

2 Judgment of the Supreme Administrative Court no. 2 As 37/2011-86 dated 25 May 2011

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.