Property law: Transmission facilities and the law

On April 11, the Polish Parliament passed an amendment to the Civil Code Act introducing, among other things, a transmission easement. The new legal institution is assumed to be a clarification of numerous doubts regarding the legal status of water, electricity, gas and other transmission facilities which have been developed on real estate owned by a third party.

Historical background

In the days of the People's Republic of Poland (PRL), when private ownership was not respected, a large number of transmission facilities were developed on private real estate without legal title and even without the owner's consent. Now, in post-communist Poland, some property owners are demanding the protection of their rights, calling for buy-outs of the portions of their properties occupied by the facilities and asking for remuneration for the use of the real estate. The courts have interpreted the provisions pertaining to the transmission facilities in many different ways, which has caused discrepancies in court judgments and a general uncertainty of law.

In accordance with the current line of court judgments, it is deemed that the person who developed the transmission facility with his/her own funds is the owner until he/she transfers the legal title to this facility to the transmission enterprise. However, even if a third person is the owner of the facility, the transmission enterprise uses it for the purpose of providing the services of utility supply. It often happens that the person who developed the facility and the transmission enterprise cannot agree on terms and conditions (in particular with regard to payment) for transferring ownership. The present legal provisions do not allow the court to force the transmission enterprise to enter into an appropriate agreement.

Effects of the amendment

The new amendment is expected to change that status. It stipulates that both the person who developed the transmission facility and the transmission enterprise will be entitled to demand transfer of the ownership of the facility to the transmission enterprise in return for remuneration. This means that if one of the parties refuses to enter into an agreement, the court will be authorized to obligate that party to enter into said agreement. The amount of the remuneration will be determined by a court expert.

Apart from the legal title to the transmission facilities, the amendment deals with the question of access to the property where the transmission facility has been developed. The transmission facilities are, as a rule, developed on real estate which does not belong to the transmission enterprise. The owners of said real estate may object to the development of the facility on their property, and also may deny employees of the transmission enterprise access to their real estate, even access required for maintenance or repair of the facility.

At present, the legal provisions insufficiently secure the right of the transmission enterprise to use real estate owned by another person in order to provide utility supply services. The possibility of establishing the appropriate easement to deal with this was created by the Polish Supreme Court in its resolution of 2003, in which the Supreme Court stated that, by way of agreement, a transmission easement can be established for the benefit of the energy enterprise. However, the resolution has been criticized. The critics have alleged that the resolution was issued for market purposes, without sufficient legal grounds.

Growing relevance

In accordance with the amendment bill, any real estate plot can be encumbered with a transmission easement. The entrepreneur vested with that easement will be entitled, for example, to develop transmission facilities on the site and afterwards to access that property in order to perform maintenance or repair of the facility. Furthermore, if the owner of the real estate does not consent to enter into an agreement in that scope, the entrepreneur will be entitled to take it to court to establish the easement and offer the appropriate remuneration.

The question of the legal status of transmission facilities is becoming more relevant in relation to building development and infrastructure - extension of the energy, water supply, sewage and telecommunications networks. Utility suppliers have problems accessing the real estate through which the transmission networks run. The amendment to the Civil Code Act meets their expectations by providing them with measures allowing extension of the network.

The act introducing the transmission easement to Polish law has been passed by the Polish Parliament. On May 8, the Senate adopted a resolution introducing some small changes to the bill. It is expected that the amendment will come into force in the near future.

Magdalena Włodarska is a legal advisor at the law firm Windmill Gąsiewski & Roman. magdalena.wlodarska@rwgr.pl