Poland’s Ministry of Development and Technology proposes restoring perpetual usufruct rights to resolve legal issues on cooperative-owned land.
Proposal to Restore Perpetual Usufruct Rights
Poland’s Ministry of Development and Technology wants to restore the possibility of establishing perpetual usufruct rights for residential land. The ministry has submitted a draft bill to the Government Legislation Centre that would also regulate the legal status of land, particularly under Warsaw’s apartment blocks.
Lifting a Seven-Year Ban
Currently, there is a ban on establishing perpetual usufruct for residential purposes. The ministry proposes to abandon this restriction, partially reversing a reform from seven years ago that aimed to gradually eliminate this right. That reform enriched nearly 2.5 million residents of apartment blocks and single-family houses.
Benefits for Housing Cooperatives
Housing cooperatives and Social Housing Initiatives will benefit from the return of perpetual usufruct rights. The lifting of the ban is intended to facilitate their implementation of social housing investments—projects not focused on profit but on meeting actual housing needs.
Preferential Financial Conditions
The proposal includes preferential financial conditions for land leased for perpetual use for apartments, social housing, and student housing. The annual fee would be 0.3% of the land value, with the initial fee not exceeding 10% of its price.
PRL-Era Legal Uncertainties
The unclear legal status of land under apartment blocks is a legacy of Poland’s communist era (PRL). The problem originated during that period and worsened over years, as authorities issued construction permits without proper formalities.
Historical Context
Until 2012, tenant rights could be converted to ownership rights in buildings on land with unregulated status, with Supreme Court approval. In 2013, however, the Court ruled that such ownership rights only had “expectative” character, making it impermissible to establish land registers for them.
Legal Provisions for Cooperatives
The draft bill would allow housing cooperatives to demand perpetual use rights to land and free transfer of building ownership if the buildings were constructed on State Treasury or local government land under specific conditions related to construction dates and prior claims.
Implementation Timeline
These regulations would apply only for one year. Cooperatives could make claims to local authorities, with the first annual fee ranging from 15-25% of market value, followed by 1% annual fees. Building ownership transfers would be free of charge.