Property law: Down on the farm
It is a good starting point to ascertain whether the plot of land you are to acquire actually constitutes agricultural land. This information can be found in the Land Registry kept by the County Foreman's Office (Starostwo). In the case where there is a local zoning plan (miejscowy plan zagospodarowania przestrzennego) applicable to the property, such designation should be consistent with the designation in the Land Registry. When there is no local zoning plan applicable to the property the information from the Land Register is sufficient. The excerpts from the Land Registry and local zoning plan are documents evidencing the agricultural character of the land and therefore should be presented to a public notary at the signing of the agreement.
Get permission
The most important issue relating to foreign entities or persons intending to purchase land is obtaining a permit for acquisition of land by a foreigner from the Ministry of Internal Affairs and Administration.
Although the rules have undergone significant change since Poland's accession to the EU, the pre-accession restrictions regarding foreigners acquiring agricultural land in Poland are still applicable. Any foreigner, irrespective of being a European Economic Area (EEA) citizen or entrepreneur, is required to apply for a suitable permit if he or she wants to acquire agricultural land. The situation will remain as such until 2016, i.e. 12 years post EU accession. However, according to an official interpretation issued by the Ministry of Internal Affairs and Administration, such a permit is not required in the event where an entity located in the EEA purchases shares in a company holding a legal title to agricultural land.
Real-estate agent
There is another a hurdle when acquiring agricultural land in Poland, which is not as well known by foreigners as the above, but can cause equally serious legal consequences. In the event where agricultural land is subject to a purchase agreement, a right of pre-emption is vested in the Agricultural Property Agency (Agencja Nieruchomoci Rolnych). If the agency is to exercise this right, it is obliged to do so within one month of being notified of the conclusion of the purchase agreement. In practice, the agency sends a letter to the parties informing them whether it elects to waive the pre-emption right or not.
Consequently, it must be borne in mind that an agreement transferring legal title to agricultural land concluded without the requisite permit issued by the Ministry of Internal Affairs and Administration, or prior to the expiry of the one-month time limit within which the agency may choose to exercise its pre-emption right, is invalid under Polish law.
Landlocked
It is of vital importance that the purchaser ensures that the preliminary purchase agreement is concluded in a certain way. The parties would be well advised to conclude a conditional purchase agreement (umowa warunkowa) providing for two conditions: obtaining the Ministry permit and tensuring hat the agency will not exercise its pre-emption right.
Only upon satisfaction of these two conditions (because Polish law generally prohibits disposing of real property under any other conditions) would the final purchase agreement, which transfers the legal title to the property, be validly concluded. It remains crucial to ensure that the acquisition of agricultural land in Poland is a two-step transaction.
The potential purchaser should also bear in mind that if he or she wants to develop the property, the land should be excluded from agricultural production (wyłšczenie z produkcji rolnej) by virtue of a decision issued by the County Foreman prior to obtaining the building permit.
Paweł Lis is a junior associate at Linklaters law firm. E-mail: pawel.lis@linklaters.com
