Author: Michał Łomżyński

The land and mortgage register is an official set of documents maintained by the court competent for the location of the real property. Land and mortgage registers are maintained in order to establish the legal status of real estate. One of the main principles of keeping land and mortgage registers is a presumption, according to which a right disclosed in the land and mortgage register is entered in accordance with the actual legal state. This principle justifies the presumption that: 1) the registered right exists; 2) it belongs to the entity indicated in the entry; 3) the content of the right is consistent with the entry; 4) the right has priority resulting from the entry.

The above presumption is dictated primarily by ensuring security of legal transactions in real estate by ensuring reliability of land and mortgage registers. The land and mortgage register consists of four sections marked with Roman numerals I, II, III, IV. Section I of the land and mortgage register comprises section I-O “Designation of real property” and section I-Sp “Inventory of rights connected with ownership”. Section II discloses the right of ownership and perpetual usufruct. Section III is used to disclose limited rights in rem (except for mortgages), restrictions on the disposal of real property or perpetual usufruct, as well as personal rights and claims against the real property (except for claims concerning mortgages). Section IV records mortgages and claims relating thereto.

In order to ensure security of real estate transactions it is desirable that land and mortgage registers disclose the full legal status of real estate, updated on an ongoing basis as changes occur. It should be emphasised that the presumption of conformity of entries with the actual state extends only to the legal state of the real estate, which is disclosed in sections I-Sp, II, III, IV, but does not extend to entries in section I-O, which contains factual data regarding the designation of the real estate.

In fact, there are situations when an entry in the land and mortgage register is inconsistent with the actual legal state. The inconsistency of the content of the land and mortgage register with the actual legal state may have various forms, and may consist, in particular, in the lack of disclosure of a right, the lack of entry of existing encumbrances or limitations of a right, an incorrect entry of a right, or finally the disclosure of a non-existent encumbrance or limitation. Therefore, it cannot be automatically assumed that every land and mortgage register reflects the current legal state of the real estate.

In the event that the legal status of a real estate disclosed in the land and mortgage register is not consistent with the actual legal status, then the only way to remove the inconsistency is to institute an action for reconciliation of the land and mortgage register with the actual legal status. The legal basis for such an action are the provisions of the Act on Mortgage and Land and Mortgage Registers. A request for reconciliation of the content of the land and mortgage register with the actual legal state is subject to examination by a civil court. Action for removal of discrepancies may be brought if:

1) an existing right is not registered in the land and mortgage register, e.g. a second spouse has not been registered as a co-owner of the real estate, despite the fact that the real estate was purchased during the course of the marriage, one of the partners of a civil partnership has not been registered as a co-owner;

2) the right is registered in the land and mortgage register incorrectly, e.g. incorrect amount of share in co-ownership of the real estate in fractional parts is entered, another spouse is registered as a co-owner of the real estate, despite the fact that the real estate belongs to the personal property of one spouse only; or

3) in the land and mortgage register a non-existing encumbrance or restriction is entered, e.g. mortgage established on the real estate being a joint property of a spouse without the consent of the other spouse is entered, life-tenancy is entered whereas the real estate has been encumbered with life-tenancy servitude of dwelling.

A court judgment in a case for reconciliation of the content of the land and mortgage register does not automatically correct an erroneous entry. Only on the basis of a positive verdict, stating the discrepancy between the legal status of the real estate as disclosed in the land and mortgage register with the actual legal state, the competent land and mortgage register court makes a corrected entry in the land and mortgage register. Therefore, there is a need for cumulative, successive proceedings of both courts, and their joint result is a final reconciliation of the content of the land and mortgage register with the actual legal state.

Reconciliation within the meaning of Article 10 of the Act on Mortgage and Land and Mortgage Registers does not include rectification of real estate designation, e.g. when it appears from the land and mortgage register that the real estate is undeveloped, while in fact it is developed or the wrong area of the real estate is entered in the land and mortgage register. Rectification of faults in entries in Section I-O takes place under a simplified procedure pursuant to the provision of Article 27 of the Act on Mortgage and Land and Mortgage Registers. According to this provision, on the basis of data from the land and building register, at the request of the real estate owner or perpetual usufructuary, the designation of the real estate is rectified in the land and mortgage register.

Rectification of the real estate designation is made in the course of non-court proceedings. The rectification is made by the land and mortgage register court by making an entry. When considering the application to change the designation of the real property in the land and mortgage register, the court ex officio checks the data contained in the application and the designation of the real property disclosed in the land and mortgage register against the data of the real property cadastre (land and building register). As opposed to rectification of an erroneous entry of the legal status of real property, in this case there is no need to obtain a prior court ruling confirming the erroneous entry in the land and mortgage register, as the application for rectification is immediately examined by the land and mortgage register court.

In October this year, legislation came into force which imposes additional obligations on those serving on the boards of housing cooperatives.

On 31 October 2021, an amendment to the Act on Prevention of Money Laundering and Financing of Terrorism comes into force. Among other things, the Act regulates the operation of the Central Register of Beneficial Owners (CRBR). This is a system that collects and processes information on beneficial owners, i.e. natural persons exercising direct or indirect control over companies and other entities.

Until now, the obligation to make notifications to the CRBR concerned primarily commercial law companies. Pursuant to the Law on amending the Law on Anti-Money Laundering and Financing of Terrorism and certain other laws of 30 March 2021 (Journal of Laws of 2021, item 815), the circle of entities obliged to make a notification to the Register of Beneficial Owners has been expanded to include, among others, cooperatives and European cooperatives. These entities are obliged to make a notification to the Central Register of BeneficialOwnerswithin 3 months from the date of entry into force of the amendment, i.e. from 31 October 2021.

The notification to the CRBR is made by a person authorised to represent a given entity (in practice it will be the management board of a cooperative). It shall be made free of charge by means of electronic communication. The notification shall be submitted in the form of an electronic document in accordance with the template made available by the minister competent for public finance. The notification should be made via the website: https://www.podatki.gov.pl/crbr/. The notification should bear a qualified electronic signature or a signature confirmed by the trusted ePUAP profile and contain a statement of the person making the notification to the Register on the veracity of the information reported to the Register.

The Act contains a very extensive definition of a beneficial owner. In order to simplify, it should be indicated that it is a natural person who directly or indirectly controls a given entity and who has an actual or legal possibility to exert a decisive influence on this entity. In the case of cooperatives, members of the management board should be regarded as such persons.

Failure to comply with the obligation to notify the CRBR may result in a fine of up to PLN 1,000,000 being imposed on persons responsible for its implementation.

The second significant change, which came into force on 5 October 2021, is related to the amendment of the Act on electronic delivery (Journal of Laws of 2020, item 2320). By the above-mentioned Act, the legislator amended the content of Article 16 of the Cooperative Law, giving it the following new wording:

§ 1. The condition for admission as a member is the submission of a declaration. The declaration should be submitted in writing recorded in paper or electronic form. The letters recorded in electronic form shall be sent to the electronic delivery address of the cooperative as referred to in Article 2 item 1 of the Act of 18 November 2020 on Electronic Delivery (Journal of Laws, item 2320) and shall bear a qualified electronic signature, a personal signature or a trusted signature. A letter fixed in paper form shall bear a handwritten signature. The declaration signed by the acceding member should contain his/her name and place of residence, and if the acceding member is a legal person – its name and seat, the number of declared shares, data concerning contributions, if the statutes provide for their payment, as well as electronic delivery address referred to in Art. 2 item 1 of the Act of 18 November 2020 on electronic delivery, entered in the database of electronic addresses referred to in Art. 25 of that Act, if the acceding member has such, and other data provided for in the statutes.

§ 2. If the cooperative is at the same time an obliged institution within the meaning of the Act of 1 March 2018 on the prevention of money laundering and terrorist financing (Journal of Laws of 2020, item 971, 875, 1086 and 2320), the declaration referred to in § 1 may also be submitted under nullity in documentary form within the meaning of Article 77(2) of the Civil Code. In such a case, the provisions of the Act referred to in the first sentence shall apply to the identification and verification of the identity of the person who seeks admission as a member.

The amendment of Article 16 of the Cooperative Law consists in enabling the submission of a membership declaration in writing recorded in paper or electronic form. The changes, coming into force as of 5 October 2021, correspond with the obligation to have an address for electronic delivery entered in the so-called electronic address database, linked to a public registered electronic delivery service or a qualified registered electronic delivery service imposed on cooperatives in Article 9(1)(8) of the Electronic Delivery Act. According to this provision, each entity entered in the Register of Entrepreneurs of the National Court Register (i.e. also housing cooperatives) is obliged to have an address for electronic delivery entered in the database of electronic addresses, connected to the public registered electronic delivery service or a qualified service of registered electronic delivery.

The amended provisions allow members of housing cooperatives to submit membership declarations in electronic form (this possibility applies to persons acquiring membership on the basis of a declaration – i.e. persons acquiring separate ownership of premises and tenants of cooperative premises) by sending them electronically to the cooperative’s e-mail address. However, in order to be able to fulfil the above obligation it is not sufficient to have a regular e-mail address. It will be necessary to use a special e-delivery application that will allow sending and receiving electronic correspondence being the equivalent of registered mail (registered or with return receipt).

In order to create a public address, it will be necessary to submit a relevant application to the minister competent for informatisation. Once the e-mail address has been entered into the database of electronic addresses, it will be possible to receive membership declarations submitted electronically.

Pursuant to the Act on Housing Cooperatives, by default the management board should convene a general meeting at least once a year within 6 months after the end of the financial year. In practice this means that a general meeting of members should be held no later than June 30th each year. The date of holding a general meeting is often of significance for the moment when the term of office of members of the cooperative’s governing bodies, especially supervisory boards, ends. Often the statutes link the term of office with the moment the general meeting is held.

The provisions of the “Covidowa” Law (Law on Amendments to the Law on Special Arrangements for Preventing, Counteracting and Combating COVID-19) due to the state of epidemic extended the term of office of housing cooperative’s governing bodies. According to Article 90 of the cited Act, the deadline for convening a general meeting of a cooperative that falls during a state of epidemic or epidemic threat is extended. Therefore, the management board may postpone the convening of a general meeting for up to 6 weeks after the state is revoked.

In connection with the foregoing, the legislature also extended the term of office of members of housing cooperative’s governing bodies by enacting the provision of Article 90a according to which, “If the term of office of a cooperative’s supervisory board or board of directors expires during a state of epidemic emergency or a state of epidemic which is in effect on the day this Act comes into force or which is declared to be in effect immediately after the period in effect on the day this Act comes into force, it shall be extended until the date on which the first general meeting of the cooperative is convened within the period referred to in Article 90.”

A legal norm has been adopted that by law extends the term of office of the supervisory board or management board if the term of office has expired or will expire during a state of epidemic emergency or a state of epidemic. Some practitioners indicate that, as a result of this norm, the term of office of the members of the bodies has been extended until the expiration of the period indicated in Article 90 (i.e., 6 weeks after the cancellation of the epidemic state).

The above view is incorrect and does not deserve to be accepted.

It should be noted that the Act on Housing Cooperatives and analogously the “Covidava” Act set the maximum, limiting deadline for the management board to convene a general meeting which may also be held prior to this date.

There is no provision that would prohibit holding a general meeting during the state of an epidemic (only sanitary-epidemiological restrictions apply which may make it difficult or impossible to hold a meeting during such period).

Article 90a extends the term of office of supervisory boards, but only until the first general meeting is convened during the extended period (“the period referred to in Article 90”) in which a general meeting should be held. Thus, if the managemet board calls a general meeting of its members during the epidemic or up to six weeks after its cancellation, the term of office of the members of the governing bodies will be extended, but only until the general meeting is held. Article 90a does not provide that the term of office is extended until the end of the period referred to in Article 90, but only until the first general meeting is held during that period.

The same position was expressed by the Polish Revision Association of Housing Cooperatives  (“on the statutory extension of the term of office of the governing bodies of housing cooperatives and the possibility to convene a general meeting in a stationary format”).

In the opinion of the Association, the notion of convening the first general meeting within the deadline referred to in Article 90 should be understood as the first general meeting in a stationary format convened between the period from the entry into force of the Act of 19 June 2020 on interest subsidies for bank loans granted to entrepreneurs affected by the consequences of COVID-19 and on simplified proceedings for approval of the arrangement in connection with the occurrence of COVID-19, i.e. from 24 June 2020 to 6 weeks from the date of cessation of the state of epidemic threat or the state of epidemics. Thus, this term does not include the adoption of resolutions by the general meeting in writing or by means of direct remote communication.

In the opinion expressed by the Revision Association it was also pointed out that “if the first general meeting is convened within the deadline referred to in Article 90, the term of office of statutory bodies shall expire on the date of holding this general meeting, and consequently, members of the governing bodies of a new term of office should be elected at this general meeting.” The above regulation does not limit housing cooperatives in convening general meetings in a stationary format if the sanitary regime regulations concerning e.g. the limit of persons during meetings allow for it. To sum up, when convening a general meeting during an epidemic, one should remember to appoint members of the supervisory board if the statute binds the expiry of their term of office to holding a general meeting.  

According to Art. 60.7 of the Act on Public Finance of August 27, 2009 , public funds constituting non-tax budgetary receivables of a public law nature are included in the income collected by state and local government budgetary units on the basis of separate acts. The zoning fee is such a budgetary receivable.

Let us remind you what a zoning fee is. According to Art. 36.4 of the Act on  Planning and Spacial Development of 27 March 2003 , if in connection with the adoption of the local zoning plan or its amendment, the value of the real property increases and the owner or perpetual usufructuary sells the real property, the head of the commune, mayor or president of the city collects a one-off fee established in this plan, determined as a percentage of the increase in the value of the real property. This fee is the municipality’s own revenue. The  fee may not exceed 30% of the increase in the value of the subject property.

What then happens in the course of the proceedings on imposition of the zoning fee if the party to the proceedings dies?  This issue has in the past been quite a challenge for the authorities. However, it can be concluded that recently the position of administrative courts on this issue has become more uniform.

Therefore, below I indicate three judgments that consistently represent the latest jurisprudence position. Interestingly, this issue has appeared relatively few times  in the jurisprudence of administrative courts.

Thus: in the Judgment of the  Voivodship Administrative Court in Łódź of November 8, 2017 (file reference: II SA / Łd 689/17),  it was indicated (following the resolution of seven judges of the Supreme Administrative Court of December 10, 2009, file ref. II OPS 3/09), that: The complainant did, admittedly, indicate that he had acquired the real estate on the basis of an inheritance division agreement and an agreement of annulment regarding  joint ownership, and that he had acquired the plot in question when the current zoning plan was already in force. In his opinion, in such a situation, the imposition of the zoning fee was unjustified, because the purchase and sale of the plot took place when the same local zoning plan was in force – but as indicated above, the Voivodship l Administrative Court pointed out that the mere fact of acquiring real estate by inheritance does not exempt from the obligation to pay the fee. Only here the party purchased the property before the proceedings for calculation of the fee were initiated.

Unlike in the second case, which we are considering, where the death of the party took place in the course of the fee determination procedure. The judgment indicated that the zoning fee, which was not charged before the testator’s death (despite the fact that the proceedings were pending), cannot be charged (judgment of October 7, 2016 of the Voivodship  Administrative Court in Glwice, file ref. II SA / Gl 272/15).

The third case involves the situation when the zoning fee has already been calculated and the administrative decision conerning this issue becomes final. This is where the  Voivodship Administrative Court in Poznań comes to our aid, which in its judgment of March 14, 2013, file ref.  II SA / Po 60/13, unequivocally ruled that “only the zoning fee concretisedin the final administrative decision may be considered an equivalent to a tax liability, and thus only in the case  when such a decision is issued with respect to the seller of the real property and becomes final during the seller’s lifetime, that the provisions of the Tax Ordinance may apply accordingly to the obligation to pay zoning fee in a certain amount resulting from this decision”.

To sum up:

we calculate the planning fee when: the seller acquired the property by inheritance and then sold it within 5 years from the date of entry into force of the development plan, and also if the death of the party occured after the decision on the zoning fee became final and legally binding – then we charge the heirs with the fee.

However, we cannot charge the fee if the death of the party occurred in the course of the proceedings regarding the determination of the zoning fee but before its completion.