The PINK Association continues to work to resolve issues related to granting so-called owner consents for the division or merger of properties granted for perpetual usufruct in the land and mortgage register and land surveying sense, which is one of the most significant problems faced by perpetual usufructuaries in the commercial real estate sector.
In the PINK Association's opinion, it is necessary to regulate the procedure for obtaining so-called ownership consents, as the current practice of public administration bodies that own land granted for perpetual usufruct often involves, without providing a reason, refusing to grant perpetual usufructuaries consent to the division or merger of real estate, or failing to respond to requests for consent. This, in fact, radically limits the rights of perpetual usufructuaries to manage their rights and rationally manage the property. This, in turn, often results in measurable damages for perpetual usufructuaries.
Below is a brief description of the correspondence conducted on this matter with the Ministry of Justice and the Ministry of Development and Technology:
- In a letter dated August 2, 2021, the PINK Association submitted a proposal to the Ministry of Justice to amend the regulations regarding problems with obtaining owner consent for the division and merger of real estate held for perpetual usufruct. The letter outlined the consequences for the commercial real estate market of unjustified refusals to grant consent for the division of real estate or the lack of a response to a request for consent. The PINK Association indicated the need for specific changes to the Act on Land and Mortgage Registers and Mortgages (including the introduction of a regulation that would explicitly make the division and merger of real estate held for perpetual usufruct into a single land and mortgage register dependent on the consent of the property owner, and the introduction of a closed list of grounds for refusing consent for division or merger in the land and mortgage register sense) and clarification of the provisions of the Real Estate Management Act (clarifying the provision to explicitly state that obtaining the owner's consent for the geodetic division of real estate held for perpetual usufruct is not necessary). The letter is available here. HERE.
- In response to the PINK Association's letter, the Ministry of Justice, in a letter dated August 30, 2021, stated that the implementation of the solutions proposed by PINK would limit and weaken property rights. In the Ministry's opinion, there is no need to undertake legislative work on the Act on Land and Mortgage Registers and Mortgages in the scope proposed by the PINK Association. Regarding the proposed amendments to the Real Estate Management Act, the Ministry indicated that it does not see the need for legislative changes, referring to the institution of reminders, present in administrative proceedings, and indicated this institution as a solution to the problems. Response available HERE.
- In a letter dated December 17, 2021, the PINK Association contacted the Ministry of Justice, outlining practical problems related to the exercise of perpetual usufruct rights, and highlighting the consequences of the authorities' inaction in granting consent to perpetual usufructuaries for entities in the commercial real estate sector. The letter is available at: HERE.
- In its response of January 19, 2022, the Ministry of Justice evasively indicated that the currently applicable regulations contained in the Act on Perpetual Property and Mortgage and the Act on Real Estate Management, supplemented by the provisions of the Code of Administrative Procedure, sufficiently regulate the issues identified by the PINK Association as problematic. The response is available. HERE.
- The PINK Association, via email, requested the Ministry of Justice to clarify its assessment that a perpetual usufructuary wishing to divide real estate "must have a substitute consent to undertake activities in this respect" and at the same time: "that in the case of division or merger of real estates granted for perpetual usufruct, the owner's consent is not required.".
- In response, in a letter dated February 2, 2022, the Ministry of Justice indicated that, on the one hand, the Act on Land and Mortgage Registers regulates the division and merger of real estate in terms of land and mortgage registers, i.e. disclosing changes in real estate in the land and mortgage registers maintained for them (for such activities, it is necessary for the perpetual usufructuary to obtain the consent of the owner of the real estate held in perpetual usufruct), while the Act on Real Estate Management regulates the rights to divide and merge real estate in terms of surveying (for these activities, the Act on Real Estate Management does not provide for the obligation for the perpetual usufructuary to submit the consent of the owner of the land granted for perpetual usufruct together with the application). Supplementary information to the response is available HERE.
- On March 21-22, 2022, the PINK Association sent letters to the Ministry of Justice and the Ministry of Development and Technology, pointing out the need to regulate the issue of obtaining so-called owner consents in the context of the problems faced by perpetual usufructuaries. In the letters, the PINK Association argued that the problems that prevent, among other things, rational planning of commercial investments on larger properties could be solved by regulating the procedure for obtaining such consents by applying an administrative procedure to their issuance. The letter is available at HERE (MS) and HERE (Ministry of Agriculture and Technology).
- In response, in a letter dated June 7 this year, the Ministry of Justice maintained its previous position, set out in the letter dated August 30, 2021. The response is available HERE.
The PINK Association continues to work to resolve problems related to the granting of so-called ownership consents.