On 9 May 2019, the upper house of the Polish parliament (the Senate) adopted, without revisions, the Act of 26 April 2019 on Amendments to the Agricultural System Act and Selected Other Acts (the “Amendment”). The Amendment was subsequently signed by the Polish President on 27 May 2019.
It will come into force on 26 June 2019.
We have prepared an overview of key changes brought – in our opinion – by the new legislation, which will relax the restrictions on agricultural land transactions.
1. The list of cases to which the provisions of the Agricultural System Act do not apply was expanded to include, among others, agricultural land situated within the administrative boundaries of cities/towns, with respect to which a resolution on location of a residential project (as defined in the Facilitation of Preparation and Implementation of Residential Projects and Auxiliary Projects Act of 05 July 2018), or a resolution on location of an auxiliary project (as defined in the aforesaid Act) has been passed.
2. In accordance with the Amendment, agricultural land may be acquired by persons/entities other than individual farmers if the area of such farmland is below 1 ha.
3. The period over which agricultural land has to be used by its acquirer for agricultural purposes has been reduced from 10 to 5 years.
4. The definitions of ‘farm’ and ‘relative’ have been rephrased. Pursuant to the Amendment, a ‘farm’ should be understood to mean a “farm’ defined in the Polish Civil Code, in which the area of agricultural land or the total area of agricultural land lots is no less than 1 ha. As far as a ‘relative’ is concerned, the definition will now include stepchildren and parents’ siblings.
5. The Amendment names new entities entitled to apply for an agricultural land acquisition approval to the Director General of the National Support Centre for Agriculture. These include, among others:
– public higher education institutions – if the property is necessary for educational, research or development purposes, and will be put to agricultural use;
– those acquiring agricultural land for public purposes, as defined in the Property Management Act.
The requirements applicable to entities named in the Act before the Amendment, i.e. sellers of agricultural land and individuals intending to set up a family farm, have also been modified.
6. The Amendment elaborates on the procedure of and conditions for agricultural land acquisition approval (expressed in an administrative decision issued by the Director General of the National Support Centre for Agriculture) by setting forth the requirements that an application for approval needs to satisfy, and listing documents to be attached.
7. There are also changes to the right of first refusal and the acquisition right held by the National Support Centre for Agriculture.
8. The Amendment provides for the establishment of a system designed for free publication of agricultural land sale advertisements and responses to them, while also setting the rules of publication and basic requirements which such advertisements and responses should satisfy.
The changes outlined above reflect the general trend to make the rules applicable to agricultural land transactions more lax for certain entities and in specific cases.
If you have any questions about the issues discussed above or other changes to the Act, please feel free to get in touch with us any time.
Attorney-at-law / Partner
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