What interesting changes can we expect this year in construction law?
Proposed changes to our existing body of construction law have been publicised and debated for many years. Various governments have announced plans to simplify the building code, to make life easier for investors big and small. To date, nothing concrete has happened. Amendments and improvements to the code have so far stalled at the planning stage. Finally, however, a deal looks imminent.
The Investment Act
The Ministry of Infrastructure has put forward a new 'Investment Act' (IA). Three key areas of change are proposed:
- new regulations related to obtaining decisions on development conditions (WZ)
- novel duties on local authorities designating urban areas
- a new planning instrument, called the organised investment area (OZI).
The Ministry, as author of the changes, explains that it is promoting the preservation of spatial order in public spaces, "to use WZ decisions as a tool to add buildings onto areas which are prepared for this, and not as an instrument for chaotic urban expansion."
Deciding on development conditions
Currently, obtaining a favourable WZ decision is possible when at least one neighbouring plot is developed; and when one can determine that the requirements relating to the planned buildings are the same as the neighbouring plots. For example, an office building may be located next to another.
The IA also clarifies the conditions which must be met to obtain a WZ decision in relation to access to public roads and utilities.
The IA will make it more difficult to obtain planning permission. A positive decision on the development plan will be granted only if "a plot has a common border of at least 4m in length and the building must not be an auxiliary building". The stipulations mean that the common border must be sizeable. They will also prevent the 'creep' of existing buildings. It would seem that permission to develop plots located next to roads, parks, forests or pieces of wasteland will not be looked on favourably.
An important issue for private investors and developers is that under the IA, decisions on development conditions will only be valid for two years. After this, they will automatically expire and it will not be possible to reapply for a building permit based on the original development plan. This statutory two year period will also apply to decisions which were issued beforehand, the term commencing on the day on which the Act comes into force. This change may be a huge obstacle for big investors and developers, who carry out large and technologically complex projects, which can be in the planning stages for as long as 10 years, often due to the necessity to source proper funding.
Another concern for investors is the narrowing of the ambit of those entitled to apply for WZ decisions. The IA stipulates that only owners and perpetual usufructuaries (long term leaseholders) may make applications. This will prevent potential investors from applying in order to 'see how the land lies'.
Currently, an authority can suspend taking a decision on a planning application for a period of nine months, if in the process of executing a new plan. The IA will now permit an enhanced suspension period of up to 18 months. This will not be popular with investors.
Designating urban areas
The IA introduces more specific principles applying to local authorities who prepare regional zoning plans. They will need to consider the conflicting demands for land holistically, as well as their obligation to designate urbanised areas.
The spatial development study is a high-level planning route-map which is generic in nature. In contrast, the zoning plan is a regional planning document specifying the type of development permitted in a locality. Currently, changes to the spatial development study and the zoning plan based on this study are carried out in the form of separate procedures involving separate personnel. In keeping with the holistic approach, the IA will introduce the possibility of joint amendments to the study and the plan; this will be a revolutionary change, which should facilitate and streamline the planning procedure.
A new planning instrument
A new planning tool will be introduced by the IA: the OZI.
The OZI is intended to combine the planning and executive stages of obtaining permission to develop. It provides for the issuance of integrated building permits. It is hoped that this will ensure the stability of arrangements for spatial development as well as promoting more high-quality developments. It should also minimise the uncertainty around the actual building requirements, which currently results in much uncertainty, especially when public space is developed eg specifications regarding the increased need for connectivity to utilities; parking; communal areas which place a burden on the existing area.
Other issues have been clarified, such as requirements related to environmental compensation for any loss of forestry areas.
Finally, the IA will allow the takeover, with the consent of the municipality, of planning initiatives within Areas of Organised Investments by the voivodship (similar to county councils). This will have the effect of aggregating such schemes to promote more uniformity and speed of response.
The Ministry has explained that the IA has been introduced to facilitate the preservation of spatial order. Of course, as we have heard repeatedly for years, the changes described above will be the beginning of the implementation of the Urban and Construction Code, which will be a comprehensive regulation of the investment process. The shape, timeframe and ultimate success of this vision remain to be seen.
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.