The Polish Supreme Court in the case IV CSK 754/14 agreed with our view on interpretation of mandatory buyout rules in case the investors buy land with no zoning and find themselves later stuck with a not favourable new zoning. The case concerned a tricky issue of legal effects of a zoning plan that had expired before the given investor has bought the land. The question was whether the new zoning should be compared with the zoning that expired prior to acquisition or with the “no-zonning” interim period. The old zoning plan expired due to failure of the city to adopt new one within timeframe prescribed by law (in reference with Article 87.3 of the Act of 27 March 2003 on Spatial Planning and Land Development, hereinafter “SPLD”). The commune, which refused to buy a property from our client, claimed that the conditions specified in the expired plan shall be disregarded, because a few years have lapsed between the moment of expiration of the one plan and the adoption of another and the purchase of the property by the claimant occurred in this ‘no-zonning’ period.
The commune claimed that in case there is no plan at the acquisition date, the "previous designation of the land" (the change of which by the new plan may trigger a claim for compensation or buyout from the property owners) shall be understood as factual use of the property only or possibly the use indicated in a Decision on Land Development Conditions (DLDC), thus completely disregarding the provisions of the previously expired plan. Such an interpretation would be very unfavorable for those owners who had not managed to develop their properties according to the provisions of the previous plan. This is also because the possibility for applying for DLDC while there is no plan in force is limited both – theoretically (by the possibility of suspending the proceedings for up to 12 months) and practically (by the risk of incurring by the owners the costs for documentation necessary to issue DLDC while the zoning preparatory works are in progress, which may overrule that DLDC, once completed).
In our opinion, Article 36.1 in conjunction with Article 87.3 of the Act o on Spatial Planning and Land Development should be interpreted taking into account the principle of continuity of planning, i.e. having regard to the zoning plan, which expired by virtue of law pursuant to Article 87.3 of the aforementioned Act, regardless of the fact that between the expiry of the previous plan, and the adoption of another a time gap occurred.
If, however, one adopted a view that the lapse of time between the expiration of the previous, and the adoption of a new plan had the effect that the designation of the property development possibilities in the previous plan became legally irrelevant, that would provide a commune, which caused expiration of the plan by its own failure to act, with a possibility of avoiding claims of owners, who would have been entitled to claim if the adoption of the new plan coincided with the repeal of the previous one. Such an interpretation of Article 36.1 in conjunction with Article 87.3 of the Act on Spatial Planning and Land Development, in the scope excluding claims of owners where the zoning plan expired due to the lapse of time – before the adoption of another zoning plan – and thus depriving them of their claims, would be incompatible with Article 64.2 in conjunction with Article 31.3 of the Polish Constitution and the principle of social justice expressed in Article 2 of the Constitution. It should also be emphasized that Article 36, mentioned above, does not provide for a claim for damages due to the repeal of the zoning plan. The property owner would thus be deprived of legal protection against loss of property value by repealing a plan and introducing of a new one after some time. Such an approach would mean in effect that a commune could take advantage of its own failure to exercise its statutory obligation, because with regard to the ‘no-plan’ period it would refer only to those, narrowly defined above, development designation possibilities.
Although there are two rulings of the Polish Constitutional Tribunal on the Article 36 SPLD (on 18th December 2014, ref. no. K 50/13 and on 9th February 2010, ref. no. P 58/08), they do not concern the same legal issue. However, they seem to support the principle of continuity of planning, which requires to take into account – for the needs of Article 36 SPLD – of the development possibilities of a property as defined in the expired plan.
The city defended the application of the above principle to the claim of our client arguing that the Constitutional Tribunal in case P 58/08 dealt with a much different situation – in which a city wanted the owners to pay additional fee to reflect the allegedly improved zoning in the new plan. In our view however, there is no economic difference between "actively" taking advantage by a commune attempting to collect the zoning fee and "passive" benefit resulting from the avoidance of buyout or paying damages to the property owners. In both situations, the essence of the matter comes down to the same economic change (or lack of it) of value of the property, which shall be examined in relation to an expired plan, and not to the "no-plan" status in order to accurately determine the change.
The Supreme Court confirmed the application of the principle of continuity of planning in the factual circumstances as described above, treating it as an applicable rule for interpretation of the Article 36 SPLD. The Supreme Court also referred to the second issue on which the lower instances court have conflicting views, i.e. the way and possibility of establishing designation of the property (in terms of possible development) during a ‘no-plan’ period when it differs from the factual use of the property. The Court confirmed that it is possible and that the prior issuance of Decision on Land Development Conditions is not necessary.
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