Design contest in the new public procurement law

The provisions of the new public procurement law, in force since 1 January 2021, introduced a number of modifications to the institution of the design contest, aimed at improving it and making it more widely used by contracting authorities.  The essence of the design contest remained unchanged. It is worth recalling that in accordance with the statutory definition, a design contest is a special form of a public promise, in which the contracting authority, by means of a public announcement, promises a reward for the execution and transfer of the right to the design contest work selected by the jury. It is important to note that a design contest is not a public procurement procedure, but a public promise of a prize, which may include, among other things, inviting the author of the work selected in a design contestto negotiate in single source procurement or to negotiate without an announcement.

The contracting authority can organise a design contest in order to select a creative work, concerning in particular spatial planning, urban design, architectural design, architectural and construction design, data processing, IT design, and an innovative project. The presented catalogue is not closed, but it makes it easier to specify the contracts to which the design contest may apply.  A novelty is the addition to the catalogue of “IT design” and “innovative project”.  The most important thing is that the design contest is held in order to select a work of creative character, thus having the character of a work in the understanding of the copyright law, to which the participant who submitted the selected work will transfer the author’s economic rights.

Unlike the previous act, which provided for the optional nature of the design contest, the current regulations introduced the obligatory principle, in a situation where the contracting authority intends to award a contract for architectural design or architectural and construction design services. There are three exceptions to this rule.  There is no obligation to hold a design contest if the contracting authority intends to award a contract for architectural design services or architectural and construction design services that has a negotiated element, i.e. in the form of negotiations with announcement, competitive dialogue, negotiations without announcement or single source procurement. There is also no need to hold a design contest for contracts of this type with values lower than the so-called EU thresholds – here it is worth noting that the value refers to design services, not the planned construction work (as the law stands, depending on the type of contracting authority, it is the equivalent of EUR 139,000 or EUR 214,000, i.e. PLN 593,433 or PLN 913,630). Moreover, a design contest does not have to be held if the subject of the procurement is a linear object within the meaning of the construction law – for example, a road construction project is such a procurement. It does not require creative solutions, and waiving the requirement for a design contest seems fully justified, particularly in the context of the length of potential proceedings. 

The award in a design contest is obligatory. It is a pecuniary or material prize awarded to the author(s) of the selected entries, or an invitation to the author(s) of the selected entries to negotiations with a view to providing a service based on the selected entry, or such an invitation along with a pecuniary or material prize. Under the previous act, the reward in the form of an invitation to negotiations could only lead to the detailed elaboration of a design contest entry, so the introduced change should protect against a situation in which the execution of a design services contract would be performed by an entity other than the winner of the design contest.

Another novelty introduced are two types of design contest procedures: an open design contest and a restricted design contest, in which, after verification of the subject of the design contest, only the participants invited to submit entries may submit entries. 

The staged nature of design contests has been retained. In a two-stage design contest, in the first stage, studies complying with the requirements laid down in the design contest regulations are selected. In the second stage, the jury evaluates the entries based on the studies submitted in the first stage, using the criteria specified in the design contest regulations. In a two-stage design contest, the Contracting Authority may also limit the number of participants who will be invited to the second stage of the design contest by applying all or some of the criteria for the evaluation of the entries as specified in the design contest Rules to the study designs.

A very important practical innovation is the possibility of inviting to negotiations, and thus concluding an agreement, with the participant whose entry received the second highest score. Such possibility can be provided for in the Rules and Regulations of the design contest in the event that negotiations conducted in the mode of single source procurement with the author of the selected entry do not lead to the conclusion of a public procurement agreement.

The provisions of the new act also introduced the limitation of the publicity of those design contest entries or stage studies, which were not awarded.

The above principles are the basic rules according to which a design contest should be conducted. Moreover, just as under the previous regulations, the contracting authority organizes the design contest on the basis of the rules and regulations, which contain detailed principles of the design contest, including the rights and obligations of the design contest participants. The provisions of the regulations are binding not only for the design contest participants, but also for the contracting authority, which has limited possibilities of making changes.  The act indicates the minimum scope of the regulations, which includes a description of the subject of the design contest, the detailed procedure of the design contest, requirements for participants, the composition of the jury, and legal protection measures.  A thorough familiarisation with the regulations is crucial for any possible participation in the design contest procedure. Also from the contracting authority’s point of view, it is extremely important to properly prepare the regulations, so that they meet the requirements of the Act and do not leave any doubts in the interpretation of their provisions. It is worth mentioning that, among other things, the recommendations of the president of the Public Procurement Office are prepared for this purpose with the participation of entities bringing together entrepreneurs active in the field of construction and architecture. This document, once established, may constitute useful guidelines for the ordering parties and interpretative guidelines for the participants. Draft available here:

It is worth reminding that the jury, which makes the evaluations, consists of at least three persons appointed by the contracting authority, whodo not have to be its employees, should have the knowledge and experience to evaluate the submitted entries, and if specific provisions require that they have the qualifications to develop a design contest entry, at least 1/3 of the jury members, including the chairman, should have the required qualifications.  

It should also be remembered that there are legal remedies in contests, which should be specified in the rules of procedure. The legal remedies are available to design contest participants, if they have or had an interest in obtaining a prize in a design contest and suffered or may suffer a loss as a result of an infringement of the Act by the ordering party.

To sum up, the changes introduced by the new public procurement law are not only cosmetic and systematic. It seems that conclusions have been drawn from the design contests held and the problems that have arisen there. Moreover, by making design contests obligatory to a certain extent, the legislator aims to increase their role, which is already visible in the practice of awarding contracts, particularly for architectural services.   


Possibility for private owners to influence spatial planning


At the outset, it should be emphasised that local spatial development plans shape the way in which the ownership right to real estate is exercised. Planning acts directly or indirectly affect the rights of individual owners by specifying the way in which land covered by the plan is to be used. In this way, by their actions in the sphere of public law, authorised local government bodies affect the rights of private owners. It is of utmost importance to ensure that the interests of the entities affected by the spatial development plan can be protected.

In the Act on spatial planning and development, the legislator ensured the possibility of active participation of the public in the work on the adoption or amendment of local spatial development plans. Ensuring broad participation of residents in the planning procedures is to foster a proper diagnosis of the needs and expectations of the residents, and a balancing of the interests of various entities. Openness and transparency of planning procedures should also serve this purpose. Article 1(3) of the Act on spatial planning and development directly implies the obligation to balance the public interest with the private interest when determining the purpose or manner of development and use of land. It should be noted that none of them is superior. In case law it is even indicated that the public interest has not been given primacy over the interest of an individual (II OSK 791/19 – judgment of the Supreme Administrative Court (NSA) of 25-11-2020).

Therefore, property owners have the opportunity to influence planning acts in principle at each stage of their adoption. Protection of their interests requires active participation in the planning procedure. The discussion of particular rights vested in the interested persons requires a brief introduction to the planning procedure.


The procedure begins with adoption of a resolution by the municipal council on commencing the preparation of a plan. A draft resolution is prepared by the mayor of a municipality. In order to determine the purpose of the land and specify the manner of its management and development, the municipality council first adopts a resolution on the accession to the preparation of a local spatial development plan. First, however, the head of commune, the mayor or president of the city performs analyses concerning, inter alia, the legitimacy of the plan’s accession to preparation, prepares geodetic materials for preparation of the plan and determines the necessary scope of the planning works. Following the adoption of the aforementioned resolution by the municipal council, the executive body of the municipality (the head of the commune, the mayor or the president of the city) is obliged to undertake activities facilitating public participation in the planning procedure. To this end, it announces in the local press, by way of a notice and in the Public Information Bulletin, as well as in the customary manner adopted in the given municipality, about the adoption of the resolution to proceed with the preparation of the plan, specifying the form, place and deadline for the submission of applications to the plan, which should not be shorter than 21 days from the date of the announcement. The authority does not send to private owners the information about the commencement of the local plan procedure, therefore it is necessary to follow the announcements referred to in the previous sentence. Proposals to the plan within the specified deadline may be submitted by practically anyone, the Act does not contain any subjective restrictions in this respect. Therefore, any owner may, in any form, submit to the executive body their proposals concerning the plan under procedure.

The head of the commune, mayor (city president) is obliged to consider all applications to the plan. The Act does not require the reviewing authority to specify the manner in which the applications are to be incorporated into the plan, nor to provide justification for the rejection of the applications.  Each designation in the local spatial development plan of additional limitations on the exercise of the ownership right must be adequately justified in detail, professionally and credibly, therefore the lack of adequate justification for disregarding the applications or comments may constitute grounds for challenging the resolution adopting the local plan.

The next stage of the planning procedure is preparation of the draft local  plan by the mayor. At the stage of preparing the draft, the authority considers the applications received earlier. The draft plan contains both text and graphics and therefore a town planner is involved in its preparation.

The opportunity to influence the content of the local plan is given to the local community in the course of a public discussion on the solutions adopted in the draft plan, which should take place during the public examination of the draft. The Act does not contain a definition or further specification of the rules of holding a “public discussion”. Based on the literal wording of the provision of Art. 17 item 9 of the Act, it may be assumed that:

1) the discussion is organised by the head of commune, mayor (city president);

2) it takes place during the public inspection of the draft;

3) the subject of the discussion are to a large extent the solutions adopted in the draft local plan;

4) there are no restrictions as to the entities that may participate in the discussion (thus, the discussion may be attended by both the municipality inhabitants and non-residents, representatives of the communities, legal entities through their representatives, and public administration bodies and organisational units without legal personality through their representatives).

Legal and natural persons as well as organisational units without legal personality are entitled to submit comments on the draft local plan within the deadline specified in the announcement on public disclosure of the draft local plan. The mayor is obliged to consider the comments and may take them into account by amending the draft plan. The decision of the head of commune, mayor (city president) not to consider the applications to the local plan, as well as the comments on the draft plan, are not subject to appeal to the administrative court. If the municipal council finds it necessary to amend the draft local plan submitted for adoption, including as a result of taking into account the comments on the draft plan, it is obliged to partially repeat the procedure of preparing the plan.


Persons whose comments on the project have not been taken into account in the course of the planning procedure may use another instrument, i.e. they may challenge the resolution adopting the local plan. Following the public discussion and consideration of comments on the project, the council of the municipality adopts by way of resolution the local plan or amends it. Based on the provision of Article 101 of the Act on Municipal Self-Government, “Anyone whose legal interest or right has been violated by a resolution or order made by a municipal body in a matter of public administration may challenge the resolution or order to an administrative court.” Thus, the above provision gives a legitimacy to persons whose requests and comments were not taken into account at the stage of the plan procedure to challenge the resolution adopting the local plan. Importantly, it does not follow from the provisions of the Act on Planning and Spatial Development that the inactivity of the owner of the real property covered by the draft plan and his failure to submit comments on the draft plan deprives him of the possibility to demonstrate that his legal interest has been violated by the plan’s provisions and to demonstrate that the violation occurred in excess of the planning authority. In other words, anyone whose legal interest was violated by a resolution adopting a local plan may challenge such resolution, regardless of whether they participated in the earlier stages of adopting the plan by submitting motions to the plan or by filing comments.

A condition for challenging a resolution on adopting or amending a local spatial development plan is that it violates an individual interest of a citizen. The judicature indicates that a complaint may only be filled by an entity that demonstrates its ownership right. Thus, in order to fill a complaint effectively, it is necessary for a party to demonstrate that as a result of adoption of a contested resolution, its specific legal interest or entitlement has been violated by limitation or deprivation of rights arising from its right. In other words, it is necessary to demonstrate that as a result of the adoption of the appealed resolution, a specific and current individual interest has been violated and to indicate the violation by a municipal body of a specific provision of substantive law, having a negative impact on the legal situation of the complainant.


Irrespective of challenging the resolution adopting the local spatial development plan and the possibility to make motions and comments in the course of the planning procedure, another legal remedy available to the owner whose interest has been violated by the adoption of or changes to the plan is the possibility to pursue claims for compensation for damage resulting from the adoption or changes to the local plan. In order to assert such claims it is necessary to meet strict conditions described below. Pursuing claims does not constitute a stage of the planning procedure, however their emergence is connected with the solutions adopted in the plan, and it is up to the interested party to decide whether to pursue such claims.

The issue of the financial effects of adopting or amending the local plan is regulated by Art. 36 par. 1 of the Act, under which if, in connection with the adoption of a local plan or its amendment, it has become impossible or substantially restricted for the owner or the perpetual usufructuary of the property to use the property or a part thereof in the manner or for its intended purpose, the owner or the perpetual usufructuary of the property may demand from the municipality

1) compensation for the actual damage incurred, or

2) to purchase the real estate or a part thereof.

The above claims may also be executed by way of the municipality offering the owner or perpetual usufructuary a substitute real estate (Article 36, paragraph 2).

Accordingly, if, in connection with the adoption of a local master plan or its amendment, it has become impossible or substantially restricted for the owner (perpetual usufructuary) to use the real property or a part thereof in the manner or for the purposes previously intended, the owner (perpetual usufructuary) is entitled to file a claim against the municipality for compensation or purchase of the real property. The municipality is obliged to execute the claim indicated by the entitled person. If he chooses compensation, he may effectively claim it for the damage he actually suffered (damnum emergens) and not for lost profits (lucrum cessans).

Claims for lack of possibility (limitation) of using a real estate in the same way as before, due to the adoption of a local plan or its change, are time-barred pursuant to the general rules under the Civil Code (see Article 118 of the Civil Code).

The second situation in which the owner has a claim against the municipality is when, following the adoption of the local plan or its change, the use of the property or its part in the existing manner (consistent with the existing purpose) is possible, but the value of the property is diminished. If, in connection with the enactment of the local plan or its amendment, the value of the real property is diminished and at the same time the owner (perpetual usufructuary) has not availed himself of the possibilities referred to in Article 36 (1) and (2) of the Act (i.e. it is possible to use the real property in the existing manner), the owner (perpetual usufructuary) may request from the municipality to pay compensation equal to the diminished value of the real property. Such compensation becomes payable as of the date of sale of the real property (date of conclusion of the sales agreement). Therefore, if the value of the real property is diminished as a result of enactment of the plan or plan amendment, but the owner (perpetual usufructor) does not sell the real property, the claim in question does not arise at all.

In such cases it is essential to obtain an opinion of a real estate valuation expert who will assess whether and in what amount compensation is due.

The following articles will be devoted to detailed discussion of, in turn:

1. principles, form and deadline for submitting applications and comments at the stage of plan procedure;

2. the premises and procedure of appealing against resolutions adopting or amending local plans;

3. pursuing claims for damages by owners related to change of the designation of real property.


How to deal with excessively long payment terms?

The vast majority of entrepreneurs operating in Poland, especially from the SME sector, encounter the problem of excessively long payment terms. Extending payment terms is a common practice used by contracting parties, whether in construction services, transport or the supply of goods. Ordering parties often use contract templates with payment dates after 90 or 120 days. Often you can also find provisions extending the already long payment date by another month in the event of failure to comply with some minor formalities.

How to deal with such challenges? Since the beginning of 2020, the legislator has made available several tools that may be helpful. One of the amended regulations contained in the Act of March 8, 2013 on counteracting excessive delays in commercial transactions (ie Journal of Laws of 2021, item 424) is Art. 7 sec. 2a, which indicates that “The payment deadline specified in the contract may not exceed 60 days, counted from the date of delivery of the invoice or bill to the debtor, confirming the delivery of goods or the performance of a service, unless the parties expressly agree otherwise in the contract and provided that is not grossly unfair to the creditor, with the exception of paragraph 2a “. Wherein paragraph 2a applies to transactions where the debtor of the micro, small or medium-sized entrepreneur is a large entrepreneur. In such a situation, a large entrepreneur cannot set a payment period longer than 60 days. How to assess whether a contract clause is not grossly unfair indicated in Art. 11a of the Act, according to which, when assessing, the entirety of the circumstances of the case should be examined, in particular:

“1) flagrant departures from good commercial practices that violate the principle of good faith and the principle of fairness;

2) the nature of the goods or services that are the subject of the commercial transaction, in particular the time usually needed for the sale of the goods by the debtor to third parties, or

 3) adjusting the schedule for the delivery of goods or performance of the service in parts to the schedule of meeting the corresponding parts of the cash benefit. “

Translating the above general guidelines into the realities of business situation that were conducted by our Law Firm and in which the courts recognized payment terms longer than 60 days as violating the Act and, as a result, ruled that our Law Firm’s clients were entitled to payment after 60 days for the service provided, for example the following particular provisions were considered grossly unfair:

 – “the date of payment of the amount of a single freight set on (…), i.e. more than 3.5 months after the actual performance of the contract by the carrier meant that the carrier credited the defendant’s business activity, who could freely dispose the funds allocated to the payment of remuneration for the carrier during this period, when he had the remuneration paid by the entity ordering the transport ”;

– “the provisions (…) of the order, which authorized the defendant to extend the payment deadline by another 60 days in the case of any complaints or entries in the CMR document, – taking into account the behavior of the defendant who did not report any claims to the claimant related to transport – as gross unfair to the carrier (…) “and ” (…) the contractual provisions extending the payment period were grossly unfair to the creditor, and were contrary to the socio-economic purpose of the contract and the principles of social coexistence, and above all were objectively unjustified, taking into account the type of service and the duration of the contract (only 3 days elapsed between loading and unloading the goods). It should be noted that the approximately 4-month period for the payment of the unit freight amount de facto meant that the plaintiff was crediting the defendant’s business activity ”;

The cited opinions of the courts indicate that if the payment deadline is set for more than 60 days or is extended unilaterally by the debtor, such deadlines may most likely be considered grossly violating the creditor’s interest. In the event of a court dispute, it is the debtor who will have to prove that the special circumstances justified such a long payment period. This issue was also considered by the courts in cases conducted by the Law Firm, and as circumstances justifying the extension of the payment deadline, the courts indicated these might be, for example: “(…)the complexity of the order, the need to produce goods from unique elements as the basis for extending the payment deadline, and thus proving that the extended payment term will in no way infringe the interests of the creditor”.

Following the remarks of the courts presented above, it can be concluded that if the debtor has set a payment term longer than 60 days, it will not be relevant for the maturity of the creditor’s claim in most commonly concluded contracts in business transactions, and only in the case of atypical specific contracts, the deadline longer than 60 days will be justified. As a result, the creditor will be able to demand payment of the due amount already after 60 days from the date of delivery of the invoice or bill, even in the case of a payment deadline exceeding 60 days resulting from the contract between the parties. If the claim becomes due after 60 days, it will mean that the creditor will also be able to claim the lump sum costs of pre-trial debt collection after these 60 days.

The possibility of demanding payment from the debtor of the receivables after the statutory payment deadline and before the contractual deadline may contribute to the improvement of the creditor’s liquidity and avoid crediting contractors at his own expense.


Unjustified prohibition on building septic tanks on plots of land covered by the zoning plan

Reasons cited for granting planning authority to the municipalities include the need to ensure consistency in spatial order and to provide the municipality with the possibility to effectively perform their own tasks as assigned by the Act on Municipal Self-Government. For example, when designating areas for housing development in their plans, municipalities take into account the need to provide roads, health care or education for future residents who will occupy the new land designated for development. This is one of the reasons why development restrictions must exist and the owner cannot always develop the property as he/she wishes.

The Act on spatial planning and development, however, requires the municipal council to balance both the public interest and the interest of the property owner.

This provision is indicated right at the beginning of the Act in Article 1. It lists a number of elements that are taken into account in spatial planning and development. These include:

– requirements of spatial order, including urban planning and architecture,

– architectural and landscape values,

– environmental protection requirements, including water management and agricultural and forestry land protection,

– ownership rights,

– public interest needs,

– the need to ensure appropriate quantity and quality of water for the purposes of supplying the population,

and it was indicated that it is necessary precisely to weigh public interest and private interests – without favouring any of those interests.

The legislator also distinguished elements that should be taken into account when locating new development in the plan, these are, in particular

– locating new residential development in a manner that allows residents to make maximum use of public mass transit as their primary means of transportation,

– providing spatial solutions, facilitating the movement of pedestrians and cyclists.

The provision was thus constructed in such a way as to give the municipal council the possibility to influence, among others, the increase or decrease in the number of residents. As it has already been pointed out, it is important for the municipality to provide infrastructure according to the population that resides there.

Often both commercial investors and small owners do not want to accept the designation of their property in the plan and feel hurt because they cannot dispose of their property in any way they want.

In the following articles I will analyze the jurisprudence of administrative courts concerning the limits of planning authority. I will show how differently the courts approach some issues in order to be almost completely unanimous in others. I will also explain when an investor has a chance to obtain a planning provision in line with his wishes, and when such chance is slim.

We will start with the Supreme Administrative Court ruling of 25 November 2020

(ref. II OSK 791/190).  The case concerned a complaint against a local law zoning which changed the existing zoning plan in such a way that for a part of the geodesic area specified in the local law, it was stated that in the absence of a sanitary sewer system, until such a system is built, sewage may be disposed of only to the existing septic tanks. After the complaint was dismissed by the Voivodship Administrative Court, the case was referred to the Supreme Administrative Court. The  SAC, in contrast to the Voivodship Administrative Court, stated that taking into account the justification of the local law, the plan should be interpreted in such a way that it prohibits the construction of septic tanks and “since no suitable facilities exist in this area and at the same time there is no possibility of building new facilities, the applicant was deprived of the possibility to discharge sewage. The applicant’s right to property, under which he has the right to construct the necessary sewage disposal facilities on his property, was thereby restricted.”

It was further pointed out that:

– ‘the municipal council violated the principles for drawing up the local plan by abusing its planning authority, resulting in a restriction of the applicant’s property right,

the council failed to indicate the circumstances justifying the imposition of a ban on the construction of new sealed septic tanks in the entire area belonging to the applicant in a situation where this area is deprived both of access to the collective sanitary sewage system and of access to the existing sealed septic tanks.

It was also pointed out that “the essence of the operation of the principle of balancing the opposing interests is based on the correct implementation of two elements of this principle: the balancing of interests and the result of the balancing. If the balancing of interests has not taken place or the rule of domination of any of the interests has been unjustifiably adopted – this principle is violated. Therefore, when interfering in the sphere of private interests of the owners, the municipal council should unconditionally follow the principle of proportionality understood as the prohibition of excessive, in relation to the protected values, interference in the sphere of rights and freedoms of individuals”.

The SAC judgment allows us to state that the municipal council, when determining the content of the plan when resolving the conflict of public and private interests, should each time analyze in detail the effect of the violation of each of these interests and justify its position. It should be concluded that in this case the prohibition of construction of new septic tanks was found to be unjustified as it infringed unjustifiably on private interest, moreover, the local law did not indicate justification of such decision and its advisability in terms of public interest.


Remuneration for establishing a transmission easement and for non-contractual use of real estate vs. tax consequences

In most cases, the rules for a transmission companies’ use of land on which devices for the transmission of electricity, water and gas are located, are regulated through establishing transmission easements. According to Art. 305 (2) of the Civil Code, transmission easements are established for an appropriate fee.

Establishment of an easement involves the obligation of the owner to tolerate the existence of electricity, water or gas transmission facilities on his land, but also to receive a benefit in the form of one-off payment (usually) or periodic compensation. Should tax be paid on the remunaration received? Before October 4, 2014, the tax authorities took the position that the remuneration received by the taxpayer for establishing a transmission easement was taxable. This position was confirmed by issued general interpretations (interpretation of the Minister of Finance of July 10, 2013, DD3 / 033/101 / CRS / 13 / RWPD-48186 / RD-70022/1).

In 2014, an amendment to the Personal Income Tax Act entered into force, which determined that  income from remuneration received for the establishment of a transmission easement within the meaning of civil law became free from income tax. Therefore, at present, there should be no doubt, that in accordnace with the aforementioned amendedment, no tax is to be collected on the remuneration received for the establishment of the transmission easement.

When regulating the issue of transmission easement, the property owner and transmission company (in the absence of a consensus of the parties, this is done through the courts) often make mutual settlements with respect to the prior use of the property by the entrepreneur without legal title. On this basis, the owner is entitled to remuneration, for so-called non-contractual use of the property. Importantly, the remuneration due under Articles 224 § 2 and 225 of the Civil Code cannot be regarded as compensation for damage caused to the owner.  Therefore, renumeration is to be regarded exclusivley as payment for the use of owner’s property by the utility holder.  It should go without saying, but does not hurt to mention, that the full legal basis of the ownership for the property subject to the easement needs to be demonstrated prior the negotiation of the easement.

The amount received for non-contractual use of real property constitutes revenue from other sources, as referred to in Art. 10 sec. 1 point 9 in connection with with Art. 20 paragraph 1 on the Personal Income Tax Act, subject to taxation according to the tax scale referred to in Article 27 sec. 1 on the Personal Income Tax Act and should be disclosed in the tax return to be submitted to the competent tax office by 30 April of the fiscal year following the year in which the above-mentioned remuneration was received (e.g. the judgment of the Provincial Administrative Court in Łódź of 07-07-2016, case no. I SA / Łd 487/16; the judgment of the Provincial Administrative Court in Warsaw of 23-10-2014, case no. III SA / Wa 1666/14).

Therefore, revenue obtained as remuneration for non-contractual use of land does not benefit from the tax exemption enjoyed by the payment for the establishment of a transmission easement. The amount received as remuneration for the use of the real property must be subject to taxation according to the general rules, i.e.  the 17% or 32% scale.


Is the obligation to pay the zoning fee inheritable?

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.