What will be the fate of applications for building permits prepared under the old energy-efficiency standards? | In Principle

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What will be the fate of applications for building permits prepared under the old energy-efficiency standards?

All buildings designed and executed in Poland on or after 31 December 2020 will have to meet stricter standards for consumption of non-renewable primary energy and the U-factor for heat flow. This change implements into the Polish legal system EU regulations adopted in 2010. It might seem investors have had a long time to prepare for the new energy-efficiency standards. But many of them are still waiting for consideration of applications filed under the existing standards, and their applications may not be decided before the more stringent standards enter into force. This raises the question of how those pending applications will be decided.

New energy-efficiency factors

The Regulation of the Minister of Infrastructure of 12 April 2002 on the Technical Conditions to Be Met by Buildings and Their Siting contains detailed technical design requirements for buildings, and sets precise standards for energy efficiency and thermal insulation for buildings under construction. These differ depending on the type of construction (residential, public use, commercial, warehouses, or manufacturing).

Sections 328–329 of the regulation contain detailed rules for calculating the values making up the primary energy factor, i.e. for consumption of non-renewable primary energy for purposes of heating, cooling, ventilation, hot water, and lighting. These values are then used to determine the annual consumption of non-renewable primary energy.

An analysis of these regulations shows that from 31 December 2020, the allowable annual consumption of non-renewable primary energy by a building will be much lower than it was from 1 January 2017. For example, the partial factor for non-renewable primary energy for heating, ventilation and hot water for a single-family home will be cut by more than 26%. The same factor for a healthcare facility will be cut from 290 to 190—more than 34%.

This change is dictated by the obligations arising out of Poland’s membership in the European Union, implementing into national law the solutions adopted in Directive 2010/31/EU on the energy performance of buildings. The change is aimed at combatting the uncontrolled, high consumption in the EU of electricity from non-renewable sources, and fits within the broader EU programme of cutting energy consumption by end users, increasing the share of energy from renewable sources, and achieving the targets under the Kyoto Protocol to the 1992 United Nations Framework Convention on Climate Change.

The change in parameters which investors must factor in when designing new buildings has been known for a long time. The stricter energy values and the deadline for their entry into force were reflected in the regulation from the start of 2014. Nonetheless, many investors filed applications for building permits without taking the restrictive new standards into account, expecting that their applications would be decided before the higher standards entered into force.

But the overburdening of architectural and construction authorities, particularly due to the need to adjust the work of the offices to meet new sanitary requirements, has caused significant delays in consideration of applications. Many applications for building permits filed this year may not be decided by 30 December 2020, which will have serious consequences for the applicants.

New indicators and pending proceedings

Under Art. 61 §3 of the Administrative Procedure Code, the administrative proceeding for approval of an architectural design and issuance of a building permit is deemed to be commenced upon delivery of the investor’s application to the authority. But under Art. 6 of the code, which enshrines the principle of legalism and the corollary rule of direct application of new law, a public administrative authority is required to apply the substantive and procedural law in force as of the date of issuance of an administrative decision. The only exceptions to this rule must be provided for in transitional provisions contained in the act amending the law.

In this case, the regulation does not contain any transitional provisions modifying the general rule under Art. 6 of the Administrative Procedure Code, and thus the revised energy parameters will apply to all administrative matters not resolved prior to 31 December 2020. Thus if pending applications for building permits do not reflect the new factors for consumption of energy from non-renewable sources, the authority applying the new factors on or after 31 December 2020 will have to refuse to approve the construction design and deny the application for a building permit.

Investors awaiting a decision from the architectural and construction authorities who do not receive a decision by 30 December 2020 will have to prepare new designs reflecting the stricter energy factors, and file new applications. Sometimes this will require investors to reincur substantial financial outlays. It cannot be ruled out that a number of major modifications will have to be introduced into the design, and new analysis and documents will have to be prepared.

Proposal of the Ministry of Development, Labour and Technology

In response to needs voiced by market participants, the Ministry of Development, Labour and Technology has drafted an amendment to the regulation introducing transitional provisions. According to the proposed new §330 of the regulation, the thermal insulation requirements and other energy-efficiency requirements which under the regulation enter into force on 31 December 2020 would not apply to proceedings involving inter alia building permits commenced but not completed prior to 31 December 2020.

In practice this would mean that if an investor files an application for a building permit by 30 December 2020 at the latest, the design documentation will be evaluated based on the existing energy factors (in force from 1 January 2017 through 30 December 2020). Importantly, the application must be filed so that an administrative proceeding is initiated in accordance with Art. 61 §3 of the Administrative Procedure Code no later than 30 December 2020. It is not sufficient to dispatch the application at the post office by 30 December 2020; it must reach the authority by that date.

The draft from the ministry, dated 29 October 2020, is currently undergoing public consultations. Before the proposal enters into force, it must still pass through the opinion, signing and publication phases. There is very little time left before the stricter requirements for consumption of energy from non-renewable sources enter into force, so at the current time it is hard to predict the fate of pending applications.

If the regulation remains unchanged, and applications are not decided on a timely basis because the authority has been dilatory (which may occur even during a pandemic), the applicants are left with the option of pursuing their rights arising out of the inaction or delay in proceeding by the public administrative authority. If such a violation is found, applicants can even seek damages for the resulting loss (Civil Code Art. 417). But measures aimed at establishing inaction or delay by the architectural and construction authorities can be taken now.

Olga Połowianiuk, attorney-at-law, Real Estate Development practice, Wardyński & Partners