As of 29 June 2022, the rights and obligations under three types of decisions issued under the Public Roads Act can be transferred to another entity. These are decisions permitting the location or reconstruction of an exit from a public road; placement of devices and advertising in a right of way; or occupation of a right of way for purposes not related to construction, reconstruction, repair, maintenance or protection of roads.
This change was introduced by the Act of 28 April 2022 Amending the Act on Investments in the Liquefied Natural Gas Regasification Terminal in Świnoujście and Certain Other Acts.
This is a very significant change from the developers’ perspective. It will enable efficient transfer of decisions necessary for building an exit from a public road or installation of equipment (e.g. connections) in the right of way for a public road after transfer of the property. Previously, the process was much more complicated. Often the administrative authorities required the developer to follow a procedure for terminating existing decisions and issuance of new decisions.
Non-transferability results from the nature of the decision
As a rule, according to the basic principle of the permanence of administrative decisions, the rights and obligations arising from administrative decisions cannot be transferred. Here, transfer is understood as the assignment of rights and obligations from the entity to whom the decision was originally issued to another entity.
The lack of transferability of administrative decisions is a consequence of the public nature of the administrative law relationship, which is characterised by the inequality of the entities. The public administrative body always has a superior position over the other party to the relationship, which is a citizen or other entity outside the administrative structure. The public body is vested with administrative authority, thanks to which it can unilaterally frame legal relations and enforce the performance of obligations imposed by them. In turn, the need to exercise oversight over the addressee of the decision makes the administrative law relationship personal to the specific addressee.
Exceptions that prove the rule
However, there are exceptions to this rule. Some administrative decisions can be transferred to another entity when allowed by a specific provision of law. In particular, this applies to decisions issued in the real estate development and construction process, where lawmakers believe that transferability will streamline the process without causing difficulties in subsequent enforcement of the administrative decision.
Pursuant to Art. 40(1) of the Construction Law, it is possible to transfer a building permit decision, as well as a decision permitting resumption of work, and the rights and obligations arising from a notification to which the authority has not objected. The authority that issued the building permit decision is obliged, by way of decision, to transfer the permit at the request of the new investor, if the new investor encloses with the application:
- A declaration that it accepts the conditions set forth in the building permit decision
- A declaration that it has the right to use the real estate for construction purposes
- Consent of the existing investor.
Significantly, under current law, consent of the existing investor will not be required if, after issuance of a building permit, ownership of the real estate or the right of perpetual usufruct of the real estate covered by the decision on the building permit has passed from the existing investor to the new investor applying for transfer of the building permit.
The institution of transfer of the building permit decision has a wide practical application, as it can apply both to a project that has not yet been started or one that is already under construction. Additionally, the parties to these proceedings are only the existing addressee of the building permit decision and the entity applying for transfer of the decision.
A similar solution is contained in Art. 63(5) of the Spatial Planning and Development Act, which allows for the possibility of transferring the rights and obligations arising under a zoning decision to an entity other than the one to whom the decision was originally issued. The authority that issued the decision on zoning conditions is obliged, with the consent of the party to whom the decision was issued, to transfer the decision to another person, if the transferee accepts all the conditions set forth in the decision. However, the necessity to transfer a zoning decision does not arise in a situation where the building permit decision was previously transferred, as the authority that issues the building permit is bound by the zoning decision. In practice, investors often choose to transfer the zoning decision in order to ensure the possibility of modifying the zoning decision.
Separate regulations also provide for the transfer of decisions on environmental conditions and water law permits.
These regulations are aimed at simplifying and, most importantly, expediting the development process, as it is not necessary to initiate new proceedings after a change of investor.
The latest changes
Recently, the catalogue of transferable decisions has expanded to include decisions permitting:
- Location or reconstruction of an exit from a public road
- Installation of equipment and infrastructure in the right of way for a road
- Occupation of the right of way for purposes not related to construction, reconstruction, repair, maintenance or protection of the road.
Permit for location of an exit from a public road
Art. 29 of the Public Roads Act provides that it is up to the owner or user of property adjacent to the road to construct or reconstruct the exit (only in the case of construction or reconstruction of a road is the road administrator obliged to construct or reconstruct existing road exits). For this purpose, the owner or user must obtain a permit from the road administrator through an administrative decision. In principle, such a decision is issued for an indefinite period.
Art. 29(7)–(13) have now been added, regarding the transfer of decisions. With consent of the party to whom the decision was issued, the road administrator will transfer the decision to another entity which agrees to accept all the conditions set forth in the decision. The parties to the proceedings for transfer of the decision are the entity to whom it was issued and the entity to whom the decision is to be transferred. As of the date of transfer of the decision, the entity to whom the decision is transferred assumes the rights and obligations arising from the decision. With the exception of the provisions on tacit resolution of the matter, the provisions of the Administrative Procedure Code on simplified proceedings apply to the proceedings on transfer of the decision.
Permit for installation of equipment and infrastructure in a right of way
Under Art. 39 of the Public Roads Act, it is prohibited to carry out activities in the right of way for a road that could damage or destroy the road and its equipment, reduce its durability, or endanger traffic safety. In particularly justified cases, it is permissible to install devices owned by others, and advertising, in the right of way, exclusively with the permission of the road administrator, issued by administrative decision.
As in the case of a permit for location or reconstruction of an exit, under current law it is now possible to transfer this decision to a third party. The procedure for transferring such decision is analogous to that for a decision on location of an exit.
Permit to occupy the right of way
As referred to in Art. 40(1) of the Public Roads Act, the possibility of transferring the rights and obligations under a decision authorising occupation of the right of way for a road with respect to permits related to telecommunications infrastructure was previously introduced by the Act of 9 June 2016 Amending the Act on Support for Development of Telecommunications Services and Networks and Certain Other Acts.
In the new amendment, the drafters rightly noted that as there is a provision regulating the transfer of a decision authorising occupation of the right of way in relation to telecommunications infrastructure, it is reasonable to extend this regulation to any case of relevant changes on the part of the addressee of the decision.
The procedure for transferring such decisions is analogous to that for a decision on locate an exit from a public road or a decision allowing installation of equipment or infrastructure in the right of way.
It should be borne in mind that this is a different procedure than that provided for in Art. 40e of the Public Roads Act, which is more liberal and does not require obtaining the consent of the existing addressee of the decision, and provides for the possibility of applying the provisions of the Administrative Procedure Code on tacit resolution of the matter.
Practical considerations behind the change
According to the explanatory memorandum to the bill of 28 April 2022, which introduced the amendments to the Public Roads Act discussed above, the motive for the amendment was procedural efficiency. Before, there was no general regulation clarifying the possibility of transferring the rights and obligations obtained by a party to another entity. Thus new decision-making proceedings had to be initiated when the investor changed, which significantly prolonged the implementation time for projects initiated by the previous party to the decision, and could even threaten implementation of the project.
Thus, the parliament has made a nod not only to investors, for whom the possibility of transferring decisions is of considerable practical importance, but also to administrative bodies, which will not have to conduct proceedings on the same matter twice. This solution should be evaluated positively, as in commercial practice there is often a change of investors after the development process begins (e.g. if the real estate is sold). Then the new investor had to obtain new decisions necessary to carry out works in the right of way for a public road (such as an exit), which significantly prolonged the development process.
Aleksandra Szczepińska, Sylwia Moreu-Żak, attorney-at-law, Real Estate practice, Wardyński & Partners