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 Reconciliation of the legal status of the land and mortgage register versus rectification of the content of the land and mortgage register

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.

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What housing cooperatives’ management boards should bear in mind – new duties of cooperatives

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.

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The government plans to open the door a little wider to foreigners

Polish entrepreneurs in most sectors are experiencing a shortage of workforce. So far, they have been supported largely by citizens of Ukraine working temporarily in Poland. Despite the influx of hundreds of thousands of foreign workers, the number of vacancies in enterprises remains high. In an attempt to remedy this, the Ministry of Interior and Administration has prepared amendments to several acts regarding the provision of work by foreigners (these are the acts: on foreigners, promotion of employment and labour market institutions, and minor amendments to the Act on the Card of the Pole and repatriation). Below is a brief description of the most important changes:

1. Visas for students – reduction of the time limit for issuing Schengen visas for students from 60 to 30 days.

2. Issuance of national visas – the deadline for extending the proceedings due to the consul or the Ministry of Foreign Affairs requesting information from the President of the Office for Foreigners as to whether there are circumstances justifying a refusal to issue a visa has been shortened from 60 to 30 days.

3. Introduction of the possibility of considering applications for visas out of turn – the Act gives the Minister of Foreign Affairs, in agreement with the Minister of Internal Affairs, the right to issue regulations allowing for considering applications from a given country out of turn. At the same time, the same regulation may specify the professions for which the issuance of visas will also be considered out of turn.

4. Temporary residence permits – the amendment introduces a deadline for the decision to be issued – within 60 days, provided all documents have been submitted and the foreigner has appeared in an office in person.

5. The Act introduces the possibility of electronic communication between a voivodship office and the authorities of the Police, Border Guard, Internal Security Agency and consular services with regard to seeking an opinion on a foreigner during the procedure for issuing a temporary residence permit.

6. The obligation to have a stable and regular source of income is abolished and replaced by a requirement that the work which is to be entrusted to a foreigner must be remunerated at least at the minimum wage. 

7. The obligation to provide a place of residence is eliminated.

8. Pursuant to the new provisions of the Act, a change of the registered office or place of residence, name or legal form of the entity employing a foreigner, the takeover of an employer or a part thereof by another employer, the transfer of an establishment of work or a part thereof to another employer, the replacement of a civil law contract by an employment contract, a change of the name of the position at which the foreigner performs work while retaining the scope of his/her duties, or an increase in the working time with a proportional increase in remuneration do not require an amendment or a new temporary residence and work permit.

9. A foreigner will have the right to apply for a change of the residence and work permit if he/she intends to change the employer.

10. One of the most important issues is that all proceedings for issuing a work and residence permit that are pending at the moment of entry into force of the Act should be terminated by issuing a decision on granting a residence permit, except for situations when a foreigner is on a list of persons whose residence in the Republic of Poland is undesirable, his/her data is in the Schengen Information System for the purpose of refusing entry or it is opposed by defence reasons, security reasons, public order reasons or obligations arising from international agreements.

11. The period of work on the basis of a statement on entrusting work is extended from 6 months to 24 months.

The planned changes are likely to contribute to the acceleration of certain procedures related to obtaining work and residence permits by foreigners. It remains an open question to what extent the rigid deadlines introduced will actually be observed and implemented. The relaxation of the requirements for obtaining work and residence permits as well as the extension to 24 months of the period in which it is possible to work on the basis of a statement on the commission of work certainly deserve praise. The effect of the amendments may be to increase the influx of foreign workers, who are so necessary to the economy.

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Obligations of building owners to draw up energy performance certificates

When signing the notarial deed of sale of a house or flat, you can often find in it provisions on the transfer of the so-called energy performance certificate by the seller. Sometimes the provision of the contract informs only about the failure to provide this document by the seller. Not all buyers are aware of the rights they have if the seller fails to deliver the energy performance certificate.

The above issues are regulated in detail by the Act of 29 August 2014 on the energy performance of buildings (hereinafter as “the Act”).

According to the Act, the energy performance should be understood as a set of data and energy indicators for a building or part of a building, determining the total energy demand necessary for its use as intended. This information is a source of knowledge for the buyer about the potential costs of heating the building.

The owner or manager of a building or parts of a building is obliged to ensure the drawing up of an energy performance certificate for the building or parts of a building sold under a sales contract. The same obligations apply to the owner of a rented building or parts thereof. The certificate should be handed over to the buyer or tenant respectively:

– upon conclusion of the sales contract, or

– upon conclusion of the tenancy contract.

The certificate is drawn up in accordance with the methodology set out in the Regulation of the Minister of Infrastructure and Development based on the standard way of using a building or part of a building (calculation method) or with the method based on the actually consumed amount of energy (consumption method). The second method is available only for premises from the secondary market, in which the consumption of utilities is settled on the basis of meters and there are documents confirming the actual consumption of heat or natural gas from the last 3 years prior to the energy performance certificate.

The Act sets out the minimum requirements for the content of an energy performance certificate. It should include:

1) identification data of the building or part of the building;

2) energy performance of the building or part of the building;

3) recommendations specifying the scope and type of construction and installation works that will improve the energy performance of the building or parts of the building.

In the event that the seller or the landlord fails to comply with the obligation to provide the buyer or the tenant with the certificate, the buyer or the tenant may, within 14 days of the conclusion of the agreement on transfer of ownership or tenancy agreement, request in writing the transferor or the landlord to comply with this obligation within 2 months of service of the request. If despite the request the certificate is not handed over within this period, the buyer or tenant may have an energy performance certificate drawn up at the cost of the seller or landlord. The buyer or tenant may not waive this right. Possible inclusion of such statements in the sale contract or the tenancy contract will be ineffective.

The law also specifies the minimum qualifications of persons authorised to draw up certificates, and expresses a ban on the drawing up of certificates by property owners or managers – it is therefore unacceptable to draw up a certificate for oneself.

Finally, it should be pointed out that work is currently underway on a draft amendment to the Act on amending the Act on the energy performance of buildings and other acts. The legislator justifies the need for change, inter alia, by the fact that there are currently no effective mechanisms to ensure the transfer of energy performance certificates in connection with the sale or tenancy of buildings or parts of buildings. The amendment is intended to strengthen the mechanisms protecting the interests of property buyers in terms of obtaining an energy performance certificate for the acquired building or premises in connection with the conclusion of the agreement, and in the case of a tenant – receiving a copy of such a certificate upon conclusion of the tenancy agreement.

The amendment provides for an obligation on the seller or the landlord to provide a copy of the energy performance certificate of the building. According to the proposed change, in case of failure to provide the certificate, the notary will be obliged to refuse to perform notarial act.

The planned changes should be assessed positively. The rigour of refusal to draft a notarial deed will probably contribute to improving the implementation of the obligation to provide buyers or tenants with energy performance certificates.

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The conference “Public Procurement in the Face of the New Public Procurement Law” ended on 22 October. Piotr Loretański, partner in our law firm, was a speaker at the conference. He focused on the practice of abnormally low price in public procurement. We thank Must Read Media for inviting us to participate in such an interesting event for the public procurement sector.

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Changes in civil procedure

Recently, the President signed the Act of 11 August 2021 amending the Act – Code of Civil Procedure and certain other acts. What does the subsequent amendment of the Code of Civil Procedure provide for this time?

  1. Article 165 § 2 of the Code of Civil Procedure was modified, which indicates that the submission of a pleading in the form of registered mail in a Polish postal facility of a postal operator within the meaning of the Act of 23 November 2012. – Postal Law or in an establishment of an entity engaged in the delivery of correspondence on the territory of the European Union is equivalent to bringing it to court.
  2. Thus, currently, in order to comply with the deadline for filing a pleading an additional obligation must be fulfilled in the form of sending the letter by registered mail (previously an ordinary letter was sufficient). But it is enough to send the letter at any Polish postal operator (provided that it performs its activity on the basis of the Act of 23 November 2012. – Postal Law). However, such a requirement does not apply to posting of procedural writs in other European Union countries – obviously, entities operating there do not provide services under the Polish postal law. Thus, it will be sufficient to post a letter at an establishment of an entity engaged in the service of correspondence in the European Union – the choice of establishments will therefore be very wide.
  3. There have also been introduced changes in the proceedings by way of payment-order and writ-of-payment in such a way that Article 4802 has been given a new wording. The new wording of the provision allows the court to indicate in the order for payment a time limit other than 2 weeks and § 2 indicates in what cases the court should indicate in the order what the time limit should be. The time limit is:
    1) two weeks of the day of service of the order in the case of an order for payment issued under the writ of payment procedure if the order is to be served on the defendant in the country;
    2) one month as from the date of service of the order in the case of an order for payment issued under a writ of payment procedure if the defendant is to be served with the order outside the country in the territory of the European Union;
    3) one month from the date of service of the order in case of an order for payment issued under the order of payment procedure where the service of the order on the defendant is to take place in the territory of the European Union;
    4) three months from the date of service of the order, where service of the order is to take place outside the territory of the European Union.
  4. In addition, two new paragraphs 21 and 22 have been added in the wording, which allow for a change in the time limit for the performance indicated in the order for payment if, after the order for payment has been issued, it transpires that service of the order for payment is to take place in a place other than that originally indicated in the lawsuit.
  5. In the proceedings by writ of payment, article 485 has been amended, with a new wording of § 2, adding additional requirements for the issuance of an order for payment against a consumer in the form of presenting, together with the statement of claim, the agreement from which the claim secured by a bill of exchange arises, together with the bill of exchange declaration and appendices.  Additionally, in the content of the lawsuit against a natural person, it is necessary to include a statement whether the claim asserted in the slawsuit has arisen in connection with the agreement concluded with the consumer. As a consequence of this change, the new wording of § 4 indicates that if the original bill of exchange or cheque is not attached or the statement (new element) referred to in the fourth sentence of § 2 is not included in the body of the lawsuit, the presiding officer shall request the claimant to submit it under pain of the return of the lawsuit under article 130 of the Code of Civil Procedure. Another consequence of the addition of this declaration is the addition of § 5 which provides for the possibility to impose a fine on the claimant, his legal representative or his agent who, in bad faith or through lack of due diligence, has made a false statement that the claim asserted in the lawsuit did not arise from a contract concluded with a consumer.
  6. The above changes are a consequence of, inter alia, the judgment of the Court of Justice of the European Union, C-176/17 – Profi Credit Polska (OJ EU.C.408).
  7. The Act also amends the law on bills of exchange and the Act on court costs in civil cases.
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The creditor will not always recover the pre-litigation costs in excess of the flat rate

It is common practice in business transactions to use the services of professional debt collectors in order to avoid costly and lengthy court proceedings. The legislator, meeting the needs of entrepreneurs, made it possible to claim from debtors the costs of such services, pursuant to Art. 10 sec. 1 and 2 of the Act of March 8, 2013 on counteracting excessive delays in commercial transactions (ie. Journal of Laws of 2021, item 424). In the first place, the creditor, pursuant to Art. 10 sec. 1 creditor is entitled to a flat rate in the amount of the equivalent of 40, 70 or 100 euro, respectively. The flat rate is due by operation of law and without any additional actions on the part of the creditor. Flat rate claims are not a major subject of controversy in the jurisprudence of courts.

However, ambiguities arise with claims regarding the costs of recovery in excess of the statutory flat rate, the return of which may be demanded by the creditor pursuant to Art. 10 sec. 2 of the above-mentioned act. The key wording in par. 2 is the phrase “in reasonable amount”. This means that the creditor must meet certain conditions in order to be able to recover the incurred expenses in excess of the flat rate. First of all, it is a claim for damages (for example, the Supreme Court in the resolution of December 11, 2015, file number III CZP 94/15, and the District Court in Warsaw in the judgment of February 24, 2017, file number XXIII Ga 111 / 17), with all the consequences, so the creditor must prove the damage suffered, secondly, to prove the debtor’s guilt and the causal link between the debtor’s fault and the damage suffered by the creditor. Therefore, it is necessary to prove not only the fact of incurring costs, but also the legitimacy, i.e. both the amount and the fact that the costs were justified in the circumstances of a given case. Compliance with the above requirements often causes many problems for creditors and their attorneys. In one of the last cases of this type, in which our law firm represented the debtor, the court dismissed the creditor’s claim for reimbursement of pre-litigation costs in excess of the flat rate. The court rightly drew attention to several issues which the creditor failed to prove. First of all, the amount of the debt collector’s remuneration may not be arbitrarily determined by the creditor together with the debt collection company in percentage terms, the circumstances of a given case should be included in the calculation of the remuneration, including the duration of the debt collector’s operation, the scope of activities undertaken, and the difficulty of the case. Subsequently, the creditor should prove not only the fact of payment as a result of the actions of the debt collector, but also what actions the debtor undertook and whether they resulted in the payment of the debt by the debtor. The court also confirmed that activities such as sending a request for payment or contacting by phone fall within the scope of activities for which a flat rate is due, but they cannot be considered as extraordinary activities justifying the award of remuneration exceeding the flat rate – reference number of the case – X GC 294/21 judgment of 1 July 2021 in the District Court Poznań Stare Miasto in Poznań, 10th Commercial Division.  

In our practice we have had numerous cases, in which the courts refused to compensate creditors pursuant to Art. 10 sec. 2 of the Act of March 8, 2013 on counteracting excessive delays in commercial transactions, if these costs were not justified and were not properly demonstrated. It is also worth paying attention to another judgment, also issued by the Poznań Stare Miasto District Court, in which the Court indicated an additional circumstance limiting the possibility of seeking compensation above the lump sum, namely that the debt collector’s remuneration should not exceed half of the costs of a professional attorney’s remuneration for conducting a court case: “As a rule, it should be assumed that the costs of debt collection proceedings should be lower than the remuneration of a professional attorney for court proceedings. Initiating and conducting court proceedings requires a greater amount of work than taking standard actions in debt collection proceedings. In the case of a trial, apart from sending a request for payment or telephone contact with the debtor and a general substantive assessment of the merits of the request, it is also necessary to prepare a statement of claim. Of course, determining the amount of the reasonable costs of debt collection proceedings depends on the circumstances of a particular case. In the present case, the justified remuneration should amount to (…) PLN, that is about 50% of the costs of any possible court proceedings ”(reference number XII GC 1398/20). To sum up, debtors are not defenseless against unjustified claims related to pre-trial recovery costs. If the additional costs are not justified and duly proven, these claims can be effectively challenged.

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Appeal procedures in the new public procurement law

The provisions of the new Act on Public Procurement Law, in force since 1 January 2021, introduced changes in the area of legal remedies aimed at improving them, as well as making them more accessible. Although the new act has not introduced any revolution in the above scope, the changes made are very significant, in particular from the point of view of the contractor’s interest. Legal remedies continue to be an appeal to the President of the National Appeal Chamber and a complaint to the District Court in Warsaw – the Public Procurement Court. Additionally, the possibility of filing a cassation complaint with the Supreme Court has been introduced.   

According to the new act, a contractor, a competition participant or any other entity that has or had an interest in obtaining an order or an award in a competition and has suffered or may suffer damage as a result of an infringement of the act by the awarding authority is entitled to legal remedies. Another novelty is the extension of the circle of entities authorised to file legal remedies against the announcement initiating the contract award procedure or the announcement of the competition and the contract documents to include organisations on the list kept by the President of the Public Procurement Office (available here: https://www.uzp.gov.pl/kio/lista-organizacji-uprawnionych-do-wnoszenia-odwolan) and the Ombudsman for Small and Medium-Sized Enterprises.

The basic legal remedy is an appeal to the President of the National Appeal Chamber.  One of the most important changes is the extension of the catalogue of prerequisites enabling a contractor to lodge an appeal.  Pursuant to art. 513 of the new Public Procurement Law, an appeal can be lodged against:

1) the ordering party’s action incompatible with the provisions of the Act, undertaken in the procedure for the award of a contract, the conclusion of a framework agreement, a dynamic purchasing system, a system for qualifying contractors or a competition, including the draft provision of the agreement;

2) failure to act in the procedure for the award of a contract, conclusion of a framework agreement, dynamic purchasing system, contractor qualification system or design contest, to which the awarding entity was obliged pursuant to the Act;

3) failure to conduct a contract award procedure or organise a design contest on the basis of the Act, despite the fact that the contracting authority was obliged to do so.

Thus an appeal may be filed against any act or omission of the awarding authority. The value of the contract does not matter. This constitutes a significant novelty in relation to the previous act, where an appeal below the so-called EU thresholds was possible only against a specific catalogue of actions performed by the ordering party. Currently this catalogue has been extended to include all actions. The scope of the appeal also includes the ordering party’s omissions.  

Moreover, an appeal is available not only in procedures for the award of a public contract, but it has also been explicitly indicated that an appeal is available in procedures aimed at awarding a contract, i.e. for the conclusion of a framework agreement, in a dynamic purchasing system, in a system for qualifying contractors or in a competition. The possibility to lodge an appeal against a failure to act on the part of an awarding entity, as well as against a failure to conduct a procurement procedure or organise a competition has been clearly indicated. A contractor may also lodge an appeal against draft provisions of a contract, regardless of whether their non-compliance with regulations has a significant impact on the outcome of the procedure. Appeals can be filed against non-compliance with the provisions of the PPL Act, as well as with the provisions of the Civil Code applied pursuant to art. 8(1) of the PPL to actions taken by the awarding entity, contractor and participants in the procedure for the award of a contract or competition, as well as contracts in public procurement matters. In such cases the National Appeals Chamber may order the amendment of the draft contractual provisions or their removal. It cannot order the introduction of provisions of a specified content, but it can order the introduction of provisions of a specified type.  

Submissions in appeal proceedings shall be made in writing, in an electronic form or in an electronic form, with the proviso that an appeal and an accession to appeal proceedings made in an electronic form shall require a trusted signature.

Unlike the previous act, the lodging of an appeal does not affect the course of the tender validity period. The new provisions do not provide for suspension of the tender validity period.

The new act has introduced regulations concerning proxies in appeal proceedings. The previous regulations did not regulate this issue. The general rules of the Civil Code applied. According to the new wording of the act, an attorney or a legal counsel may be a representative in appeal proceedings, as well as a person who manages the property or interests of a party or participant of the proceedings and a person employed by a commission from a party or participant of the proceedings, if the subject matter of the case falls within the scope of the commission. Moreover, an employee of a legal person, an entrepreneur, including one without legal personality, or an entity without legal personality may also be an attorney. The above provisions are based on the provisions of the Code of Civil Procedure. The well-established position of doctrine and courts in this respect will be helpful in their interpretation.  It is worth emphasising that the rule is that an attorney at law or a legal adviser may be an attorney at law, which is a change in relation to the previous provisions.

In proceedings with a value above the EU thresholds, the principle of three-person panel review by the NAC has been reintroduced. The President of the National Appeal Chamber may appoint a one-person panel in less complex cases.

The new Public Procurement Law has a separate section devoted to evidence proceedings, which has been systematized and made more precise. Among other things, a decision has been introduced as a form of admitting evidence, issued both at a hearing and in closed session, and issues related to the appointment of experts and testimony of witnesses have been clarified.

As in the previous act, the rule is that in the case of an appeal the ordering party cannot conclude an agreement until a judgment or decision closing the appeal proceedings is announced by the Chamber. The new act added another situation in which the Chamber may waive the ban on concluding an agreement if the ordering party has made it probable that the appeal is brought with the sole purpose of preventing the conclusion of an agreement.

The rules of incurring the costs of proceedings have also been changed, introduced pursuant to the Regulation of the President of the Council of Ministers of 30 December 2020 on detailed types of costs of appeal proceedings, their settlement and the amount and manner of collecting the appeal fee. What is important, the issues of proportional bearing of the costs of appeal proceedings have been regulated. The NAC will divide the entry relatively, awarding respectively from the ordering party or participant in the appeal proceedings raising an objection in favour of the appellant an amount the height of which it will determine by calculating the proportion of the number of charges presented in the appeal, which the Chamber accepted, to the number of charges which the Chamber did not accept. It has also been specified that the NAC may, in justified cases, refrain from dividing the costs in a proportional manner, in particular if this is supported by the type of charges upheld by the NAC or their importance for resolving the appeal. This has an impact on the practice of constructing charges. On the grounds of the previous act, a significant multiplication of charges by contractors was observed, often without substantive justification.

To sum up, the changes introduced by the new Public Procurement Law are not only cosmetic in nature and systematize the existing provisions. In particular, the catalogue of prerequisites allowing a contractor to lodge an appeal will have a significant impact. This seems to meet the expectations of contractors, who in many situations were deprived of legal remedies. The positive impact of the changes is reflected in the increased number of proceedings before the National Chamber of Appeal observed after the Act came into force.

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Knowledge

Holding a general meeting of a housing cooperative in a stationary form during the COVID-19 epidemic

According to the current legislation, the obligatory body of a housing cooperative is, among others, the general meeting. By virtue of the Act of 2 March 2020 on special solutions related to preventing, counteracting and combating COVID-19, other infectious diseases and crisis situations caused by them, the deadline for holding general meetings in housing cooperatives was postponed, which, as a rule, were supposed to be  held by 30 June each year (Article 90 of the above-mentioned Act). Pursuant to the cited regulation, general meetings should be held within 6 weeks from the date of cancellation of an epidemic emergency or a state of epidemics. The changes introduced have led to a situation where some management boards of cooperatives interpret the provisions in such a way that they do not hold a general meeting because they comply with Article 90, which postpones the date of holding a general meeting. In other words, the boards believe that the general meeting should only be held once the state of the epidemic has ended.

The above view is not justified under the current legislation. Participation in a general meeting is a right of every member of a cooperative and a state of epidemics should not justify restricting this right.

There are two solutions for the legal holding of a general meeting. Firstly, during a state of emergency or epidemic the management board or supervisory board may order that a specific resolution be adopted by the general meeting either in writing or by means of direct remote communication. However, the main obstacle to holding general meetings in this form  are  worries of some of members of cooperatives about validity of meetings in such form  . Not without significance is also the lack of regulation in the current statutes or regulations concerning the course of meetings held in the remote format.

In such a case, the managers of cooperatives have the option of holding them in a traditional formula. When organising a general meeting, however, one should bear in mind the applicable epidemiological restrictions resulting primarily from the provisions of the Regulation of the Council of Ministers of 6 May 2021 on establishing certain restrictions, orders and prohibitions in connection with the occurrence of an epidemic (Journal of Laws of 2021, item 861). By introducing limits on the participants of meetings or assemblies, the legislator has restricted the possibility to hold meetings or assemblies in a traditional form. These restrictions also apply to general meetings of cooperatives.

The provisions of the Ordinance on the establishment of certain restrictions, orders and prohibitions in connection with the outbreak of an epidemic in § 26(15) indicate that:

– Until 31 August 2021, it is prohibited to organize and participate in assemblies other than those specified in paragraph 1 and paragraph 1a, including events, meetings and gatherings of any kind, except:

1) business and professional meetings or gatherings;

2) events and meetings of up to 25 persons which take place on the premises or in the building indicated as the address of the residence or stay of the person who organizes the event or meeting; the limit of persons does not include the person organizing the event or meeting and persons cohabiting or managing with him;

3) events and meetings of up to 150 persons which are held in the open air or on the premises or in a separate catering area of a sales hall, referred to in § 9(15)(2)

[§ 9(15)(2) concerning the conduct by entrepreneurs within the meaning of the provisions of the Act of 6 March 2018. – Entrepreneurs’ Law and by other entities the activity consisting in the preparation and serving of meals and beverages to guests seated at tables or to guests making their own choice of dishes from the displayed menu, consumed on the spot (included in the Polish Classification of Activities in subclass 56.10.A) and related to the consumption and serving of beverages (included in the Polish Classification of Activities in subclass 56.30.Z)];

4) gatherings, meetings or meetings related to the performance of tasks aimed at combating or preventing the spread of contagious animal diseases, including free-living (wild) animals.

It should be stated that in the period until 31 August 2021 it is possible to hold a general meeting provided that no more than 150 persons participate, it is held in the open air or in premises or a separate catering area belonging to an entrepreneur conducting food service activities. In addition, all participants should comply with the obligation to cover their mouths and noses.

The legislation in force as of the date of this information (16 August 2021) does not set limits for participants in assemblies or meetings held after 31 August 2021.

However, it cannot be ruled out that the legislator will decide to introduce new limits or maintain current limits also after this date. For this reason, it is essential to familiarize yourself with the current epidemiological restrictions each time before deciding to convene a general meeting.

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Knowledge

Opinion of the head of mayor on the consistency of the subdivision project with the zoning plan

The procedure for division of real property, regulated by the Act on Real Property Management, has been designed to remain consistent with the local zoning plan. The divisions themselves may not lead to circumvention of the provisions contained in the local plans. Most common disputes with authorities in regard to plot divisions are connected to minimum plot areas and  attempts to circumvent  the provisions on minimum plot area.  Importantly, in the absence of a local plan, the legislator has provided a separate set of  regulations on that matter, which will not be discussed in this article.

Article 93 of the Act on real estate management clearly indicates that a division of real estate may be made if it is consistent with the provisions of the local plan, and the consistency with the provisions of the plan concerns both the intended use of the land and the possibility of development of the separated land plots.  It is the consistency of the proposed division of real property with the provisions of the local plan (except for divisions which are made irrespective of the provisions of the plan) that is subject to the opinion of the mayor (hereinafter referred to as the head of the commune). The party requesting the division does not have to file a separate request for an opinion, as the opinion is a necessary stage of the division process, therefore the authority in charge of the case must ensure that such opinion is issued. Such an opinion is issued in the form of a decision which may be appealed against to the local government appeals board (org: samorządowe kolegium odwoławcze) and cannot be issued ‘separately’ from the division procedure. Thus it is not possible to request such an opinion before submitting the application for division, which the parties sometimes try to push through explaining that they want to “check whether it is worth initiating the procedure”.

In the decision itself the mayor specifies whether he assesses the proposed division “positively” or “negatively” – and in the justification of the decision, the mayor  is obliged to explain why the plots created as a result of the division can be  developed according to the local plan.

The administrative courts have repeatedly ruled on whether a decision giving an opinion is binding for the body performing the division. There is no doubt that it is binding. The Supreme Administrative Court – the “NSA” (judgment of 9 March 2018, ref: I OSK 946/16) indicates that ‘the authority approving the division of real property is bound by its opinion on the compliance of the proposed division with the local plan. This binding refers only to the fundamental issue which is subject to the opinion, and thus refers only to the compliance of the proposed division of real property with the provisions of the local plan”. The NSA further pointed out, however, that the body giving the opinion does not have a binding opinion on other substantive issues – therefore, if other obstacles to the division arise, a final refusal decision may be issued.

 It is worth bearing in mind that the opinion applies to the entire project of division – so if only a part of the proposed plots cannot be developed in accordance with the plan, a negative decision will be issued with respect to the entire project submitted for division. However, the applicant may change the project in accordance with the suggestions contained in the decision, in which case the authority will request a new opinion.

What if it turns out that the opinion was issued incorrectly and the authority has not yet issued its decision? The mayor cannot ex officio change the opinion, he/she may only request the local government board of appeals to initiate proceedings for its invalidity – if, of course, the conditions under Art. 155 of the Code of Administrative Procedure are met.