Perpetual usufruct: housing developers are facing a risk of collapse

Much attention has recently been paid to the issue of the transformation of the perpetual usufruct right. Katarzyna Woroszylska – – Partner at Baker Tilly Woroszylska Legal presented the above problem during the  FLEX Forum Prawa Nieruchomości on November 26-27, 2018.

The interest in this particular topic is increasing as it is becoming more and more controversial, especially now, as it has turned out that adopting the law on transformation the parliament had taken into consideration EU public aid regulations, at the same time failing to include the financial risk it entails for developers or housing cooperatives. Exceeding the public aid limit following a transformation will require the present perpetual usufructuary to pay the difference between the market value of the transformed land and the amount of annual transformation fees. On the national scales it means millions worth of losses for entrepreneurs. The Ministry of Investment and Economic Development has taken steps to amend the act, but the limited time for the amendment to pass the entire legislative procedure is not an encouraging sign.


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