Tax & Legal Highligts for Real Estate – November 2019

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1. Delivery of the first procedural document by a bailiff

One of the many revolutionary changes introduced by the largest amendment to the Civil Procedure Code in recent years, which came into force on 7 November 2019, is the introduction of a new principle of service of pleadings. Until now, a non-collected, double-notified consignment with a procedural letter has been considered to have been effectively delivered. The new article 1391 puts an end to the fiction of service of the first procedural document. Currently, if the defendant, despite a double attempt at service, does not collect the summons or any other pleading calling for the defense of its rights, and no written document has previously been served, the pleading will be returned to the court and the chairman will inform the plaintiff accordingly and, by sending him a copy of the pleading, oblige him to serve it to the defendant through a bailiff. The plaintiff will be obliged, within two months from the receipt of the copy of the pleading, to present the court with a confirmation of service of the pleading to the defendant or to return the pleading indicating the current address of the defendant (determined by the bailiff or by himself/herself) or evidence that the defendant is staying at the address indicated. After the ineffective lapse of the time limit, the court may suspend and then discontinue the proceedings.

2. Five-year period for the declaration of invalidity of the decision

On 6 November 2019, the Council of Ministers adopted (with a comment) a project of amendment to the Construction Law and some other acts. This project includes, inter alia, the introduction of a provision according to which it will not be possible to declare a building permit invalid if the construction was already carried out on its basis and 5 years passed from the date of its delivery or announcement, and in the case of an occupancy permit, 5 years from the date on which the decision became final. In the Council of Ministers’ opinion, this is a way to strengthen the sustainability of administrative decisions and to prevent situations in which the building permit or the occupancy permit is invalidated when the construction works were completed and the building is being used by new owners for many years.

3. Accelerating the investment and construction process

 The abovementioned draft of the amendment to the Construction Law provides also for the division of the construction design into a land or land development design, architectural and construction design and technical design, which is to make the scope of responsibility of the designer and administration bodies clearer. The draft regulation makes a distinction between elements of a construction project that will be subject to verification by the public administration body and elements that proper preparation will be the sole responsibility of designers, which in order to make the issuance of a building permit or acceptance of a notification together with the project more efficient and faster. These and other changes will come into force after the six-month or twelve-month vacatio legis from the date of publication.

4. The next version of the draft of the Act on the protection of rights of a purchaser of a residential unit or a single-family house and on the Developer Guarantee Fun

Recently, the third modified version of the draft Act on the protection of rights of a purchaser of a residential unit or a single-family house and on the Developer Guarantee Fund has been published. The purpose of this regulation is to improve the effectiveness of buyer protection in relations with the developer. The fundamental change in relation to the Act currently in force is replacement in the catalogue of measures to protect the purchaser’s payments of the existing security in the form of an open housing trust account offered together with additional security in the form of an insurance or bank guarantee by a new manner of securing the funds paid into the housing trust account, i.e. new obligation of the developer to pay contributions to the Developer Guarantee Fund (“DGF”).  The starting point was the maximum amount of the contribution to be paid by developers to the DGF. In the last edition of the draft, the proposed premium is 3% of the value of purchasers’ contributions to the open trust housing account and 0.6% in the case of closed accounts.

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See the previous editions: February 2019 | March 2019 | April 2019 | May 2019 | June 2019 | July 2019 | August 2019 | September 2019


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