Proceedings before the National Support Centre for Agriculture: Obtaining approval for acquisition of agricultural property
The procedure for obtaining approval for acquisition of agricultural property is highly formalised. Not every entity is eligible to acquire agricultural property. For example, this cannot be done by a commercial company interested in starting agricultural activity. Additionally, strict requirements have been enacted governing the price at which the vendor can offer agricultural property for sale.
In Poland, trading in agricultural property is subject to strict administrative and legal rationing. It should be noted that the Agricultural System Act does not apply to an agricultural property with an agricultural area of less than 0.3 hectare. We examine in detail what is meant by agricultural property in the article “Definition of agricultural property.”
The Agricultural System Act provides that individual farmers and entities specified in Art. 2a(3) of the act may acquire agricultural property without obtaining approval from the National Support Centre for Agriculture (KOWR)—for example, family members of the seller, purchasers in the course of bankruptcy or restructuring proceedings, or when the property is acquired as a result of conversion of an individual business or partnership into a company. Additionally, the area of the agricultural property to be acquired, along with the area of agricultural property included in the purchaser’s family farm, must not exceed 300 hectares of agricultural land (subject to other exceptions in Art. 2a(3) of the act). And it is worth noting that currently it is not necessary to obtain approval from KOWR for acquisition of agricultural property if the area of the agricultural property being acquired is less than one hectare.
Apart from the exemptions stated in the Agricultural System Act, acquisition of agricultural property in Poland requires the formal approval of the director general of the National Support Centre for Agriculture, which is issued after meeting the conditions described below. The parties to the administrative proceedings seeking consent to acquire such property are the seller and the buyer.
A request for consent may be submitted:
- By the seller of agricultural property if:
- The seller demonstrates that there was no possibility to sell the agricultural property to an individual farmer
- The purchaser will undertake to carry out agricultural activity on the agricultural property after acquiring it
- The acquisition will not result in excessive concentration of agricultural land (i.e. holding more than 300 hectares), and
- The sale price is not less than 95% of the price stated in the notice of intent to sell the agricultural property.
The prospective seller of the agricultural property must post an announcement of the intended sale in the ICT system maintained by KOWR, including:
- Identification of the agricultural property being sold with data from the land and building register and the number of the land and mortgage register
- A description of structures and other assets included in the property
- Information on the designated use of the property in the local zoning plan, or if there is none, information on the siting of a public-purpose project established in the final siting decision
- Information on land use and development conditions
- The price of the agricultural property being sold
- The deadline for responses to the announcement, which may no earlier than 30 days after posting of the announcement in the ICT system.
The condition of demonstrating that there was no possibility of selling the agricultural property to an individual farmer is considered fulfilled if no individual farmer submitted a response to the announcement and the price of the property stated in the announcement is no more than 50% greater than the average sale price for arable land per hectare in private transactions in the given province, as reported by Statistics Poland for the quarter preceding the date of publication of the announcement, unless the seller presents an appraisal showing that the value of the agricultural property exceeds that threshold, or the circumstances indicate that a potential acquirer responding to the announcement is no longer interested in acquiring the agricultural property.
A response to an agricultural property announcement is also deemed not to have been submitted if the price proposed in the response was more than 5% lower than that stated in the announcement, or the response was submitted after the stated deadline.
- By a natural person intending to establish a family farm who:
- Holds agricultural qualifications
- Undertakes to carry out agricultural activities on the property, and
- Undertakes to reside for a period of five years following the acquisition date in a commune in which one of the agricultural properties that will become part of the family farm to be created is located.
- By a natural person intending to enlarge a family farm if:
- He or she was granted financial assistance from EU funds
- Acquisition of the property will comply with the terms of such financial assistance
- He or she undertakes to conduct agricultural activity on the property and reside for a period of five years following the acquisition date in a commune in which one of the agricultural properties that are part of the family farm owned by the applicant is located, and
- The acquisition will not result in excessive concentration of agricultural land.
- By a university if the agricultural property is necessary for its instructional purposes, or research or development work, and will be used for agricultural purposes.
- By a purchaser of agricultural property if:
- The agricultural property is located in the area of distribution of public-purpose projects, in furtherance of public purposes
- The purchaser undertakes to begin implementation of the project within 12 months after the date of acquisition of the agricultural property, and
- The purchaser sets a deadline for completion of the project.
The act does not specify the exact form of an application for consent to acquire agricultural property, but provides that the application must meet the formal requirements set forth in the Administrative Procedure Code, as well as identifying the seller and the buyer, the property as listed in the land and buildings register, and the justification for the application, including the purpose for which the agricultural property is being acquired and the intended method of use.
The application must be accompanied by a number of documents, including:
- An extract from the land and building register for the parcels included in the property
- A copy of the land and mortgage register or a certificate issued on the basis of the set of documents maintained for the property, or the number of the land and mortgage register available in the central database
- A certificate on the designated use of the property in the local zoning plan
- Documents confirming that the conditions for approval are met
- The seller’s statement of its intention to sell the property to the applicant
- A statement by the seller on the inability to find an individual farmer to purchase the agricultural property, and the sale price agreed with the purchaser.
The application should be submitted to the local field office of KOWR, based on the location of the property.
The Administrative Procedure Code applies to these proceedings, so the case should be resolved promptly, but within one month, or in particularly complicated cases within two months, from the date of initiation of the proceedings.
If approval is granted, the approval is valid for one year after the decision becomes legally final. Additionally, the National Support Centre for Agriculture will refuse to issue approval to acquire the property if the application is submitted more than six months after the deadline for responding to the seller’s announcement of its intention to sell the agricultural property.
Sylwia Moreu-Żak, attorney-at-law, Karolina Dawidczyk-Bełc, adwokat, Real Estate practice, Wardyński & Partners
