Tax & Legal Highligts for Real Estate – December 2019
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1. New approach to reserving a contractual penalty
On 20 November 2019 the Supreme Court adopted a resolution (ref. III CZP 3/19) which is of significant importance for the construction business. The Supreme Court ruled that it is unacceptable to reserve a contractual penalty in case of withdrawal from a contract due to a non-performance of a monetary obligation. In previous jurisprudence two interpretations on the reservation of contractual penalty in case of withdrawal from the contract were applied. The first stated that the right of withdrawal is related to the type of service the non-performance/undue performance of which was the reason for the withdrawal. According to the second the withdrawal from the contract is possible regardless of the monetary or non-monetary nature of an obligation, because upon the withdrawal an obligation under Article 494 of the Civil Code arises between the parties, which is not a monetary obligation. As a consequence, the nature of the original obligation existing between the parties is not significant. The above ruling of the Supreme Court clearly states that Article 483 of the Civil Code is mandatory and construction contracts providing for contractual penalties in the event of withdrawal by a contractor due to late payment of an investor are not correct.
2. Another amendment to the Building Law
Another amendment to the Building Law came into force on November 1, 2019. The legislator amended Article 29, which contains a catalogue of works that do not require a building permit. From the obligation of obtaining the building permit are released construction works consisting of the execution and reconstruction of irrigation and drainage system – previously these were specific irrigation and drainage system, construction of leak-proof tanks for liquid manure or slurry and silage silos.
3. The statutory reservation of inadmissibility of the division of real estate
The Voivodship Administrative Court in Poznań in its ruling dated 10 October 2019 (file no. IV SA/Po 454/19) stated that provisions of the Act of 21 August 1997 on real estate management introduce a general prohibition for legal division of a real estate if it would result in the creation of plots of land deprived of legal access to a public road. This court also stated that the decision approving the division shall only include a reservation of the need to secure access to the public road for newly created plots of land, without indicating specific design solutions in this respect. The statutory reservation of inadmissibility of the division of real estate in connection to lack of access to the public road shall be applied to the time when those plots of land will be sold. Therefore, plots of land may be separated as a result of the real estate division without providing them with access to the public road at the stage of the division approval, but their sale into separate ownership is possible only with simultaneous provision of legal access to the public road by the seller.
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