REALNOŚĆ 5/2025
SELECTED ELEMENTS OF THE PROCEDURE FOR EXPROPRIATION OF
REAL ESTATE FOR PUBLIC ROADS
LEGAL SOURCE AND ESSENCE OF EXPROPRIATION
In today’s world, we observe the constant development of local road investments and networks of expressways, i.e. expressways or motorways. The construction of a public road is an extremely important and complex undertaking that requires a thorough analysis of technical conditions and road regulations. The stage preceding the construction of the above-mentioned public roads is the effective expropriation of real estate designated for public roads, i.e. deprivation or restriction of the right of ownership, perpetual usufruct or other property right to the property. The Constitution of the Republic of Poland, as a fundamental legal act, provides for a special procedure for the expropriation of real estate designated for public purposes, accompanied by the payment of just compensation (Article 21 of the Constitution of the Republic of Poland) – “The constitutionally protected right of ownership cannot be interpreted broadly. Otherwise, encroachment on the right of ownership would violate the Constitution of the Republic of Poland. Limitation of the right of ownership by taking it away from the owner must be carried out strictly in accordance with the regulations, which in practice means that only the actually existing course of a public road on the land allows for taking away the owner’s right and establishing ownership in favor of a public entity.1” Therefore, the fundamental legal acts in further considerations on the legal aspects of expropriation of real estate for public roads will be the Act of 10 April 2003 on special principles for the preparation and implementation of investments in the field of public roads2 (“special road act” or “ZRID”), the Act of 21 August 1997 on real estate management3 (“UGN”) or the Act of 21 March 1985 on public roads4 (“u.d.p.”). It should be noted that the legal sources of expropriation for infrastructure investments also include the Act of 12 February 2009 on special principles for the preparation and implementation of investments in the field of public-use airports5 (“special airport act”), the act on special principles for the preparation for the implementation of investments in flood protection structures6 (special flood act) or the Act of 10 May 2018 on the Central Communication Port7, however, the subject of this article is fully devoted to road investments.
NATURE AND MODE OF DELIVERY OF THE ZRID DECISION
First of all, it is pointed out that the issuance of an expropriation decision is of an administrative (coercive) nature. As a result of the decision of the administrative authority apparatus, the transfer of ownership of real estate to the State Treasury or the relevant public road manager occurs by operation of law. The obligatory prerequisites reserved by the Polish Constitution for the application of such an invasive solution as expropriation of real estate are the aforementioned public purpose and just compensation. It is worth mentioning that the expropriation decision is a legal tool accompanied by far-reaching legal consequences in the form of: (i) the division and consolidation of real estate according to the needs of the investor (ii) the transfer of real estate rights from the previous owner to the State Treasury (“SP”) or a local government unit (“JST”), and (iii) the granting of permission for the construction of a road investment project (“The legislator equates the decision to authorize the implementation of a road investment project with the decision on land development conditions1”). As a result, due to the seriousness of the aforementioned administrative decision, additional prerequisites reserved in Article 112(3) for the application of the expropriation procedure are necessary, according to which: expropriation of real estate may be carried out if public purposes cannot be achieved otherwise than by depriving or restricting rights to real estate, and these rights cannot be acquired by contract. In turn, in the case of investors
In accordance with formal requirements, the proceedings for issuing a ZRID decision are conducted by the locally competent voivode – if it concerns national or provincial roads, or the locally competent starosta – if the subject of the proceedings are municipal or district roads. The applicant for the proceedings is the General Director for National Roads and Motorways in the scope of roads under his management or the competent administrator of other roads according to the Act. The submitted application for issuing a ZRID decision is accompanied as obligatory elements by a map with projects of the division of real estate on which the future road investment is to run, or a list of intended real estates for expropriation in favor of the SP or local government unit. The above information clearly shows that already at the stage of submitting the application for issuing an expropriation decision, the real estates that will potentially be expropriated are known. It is indicated that the notification of initiation of the proceedings in the ZRID case and the notification of issuing this decision are sent to the addresses listed in the real estate cadastre. It is explained that the real estate cadastre (also known as land and building register) in accordance with the content of art. 2 point 8 of the Act of 7 May 1989 – Geodetic and Cartographic Law1 is an information system ensuring the collection, updating and provision, in a manner uniform for the country, of information on land, buildings and premises, their owners and other entities possessing or managing such land, buildings or premises – further discussion on the cadastre is devoted to the next paragraph. “The address data contained in the PESEL system will be decisive for determining the address for sending notifications of the initiation of proceedings in the case for issuing a ZRID decision or for issuing this decision. Persons whose current address data have not been disclosed in the PESEL system will most likely not receive these notifications. In the light of art. 22 sec. 2 sentence 1 of the GeodKart Act, there is no doubt that the obligation to update data on property owners, including primarily their place of permanent residence or registered office address, rests with them.2” In accordance with the thesis of the Regional Administrative Court in Gdańsk of March 10, 2021. “in accordance with art. 22 sec. 2 sentence 1 of the Geodetic and Cartographic Law, the obligation to update the data included in the land and building register rests, as a rule, with the property owners. Therefore, if – as the complainants claim – they have not resided at a given address for many years, or if the company is not a civil partnership but a general partnership and has a different registered office, then this is the data that they should have updated in accordance with the indicated provision. Thus, delivering correspondence to the address listed in the cadastre, even if it is out of date, does not, as a rule, constitute a violation of the provisions of the cited act.3” As a result, property owners should be vigilant in updating the above address data, because any negligence in this respect may result in far-reaching negative legal and factual consequences for them.
ENTRY IN THE LAND REGISTER AND REAL ESTATE CATASTRE
The specific nature of the decision on the permit for the implementation of a road investment is associated with appropriate legal consequences of a property-related nature. In accordance with the content of art. 12 sec. 3 of the special road act, the decision on the permit for the implementation of a road investment constitutes the basis for making entries in the land register and the real estate cadastre. In light of the presented legal structure of the provision, on the basis of the ZRID decision, a change in the legal status of the property and the cadastral designation of the property are made. The subject of the entry in the land register is the change of the entity of the previous owner, in whose place a public-law entity is entered. The described change is also accompanied by the deletion of limited rights established on the property and entered in the land register, including mortgages. “The change is of course made to the part of the property that is covered by the lines delimiting the area for the public road, unless the entire property is part of this area.1” In addition to changes in ownership value, the ZRID decision also has consequences for the cadastral description of the property and its parts. This is dictated by the division of the property, as a result of which the cadastral division of land plots is made along with their new designation, cadastral boundaries and surface area. Due to the mechanism of operation of administrative decisions, changes in the land and mortgage register and land and building records are made only when the ZRID decision has become final.
RIGOR OF IMMEDIATE ENFORCEMENT
Due to the specific nature of implementing road projects, the legislator has provided the governor or the district governor with the possibility of imposing the order of immediate enforceability on an expropriation decision submitted at the request of the relevant road administrator – art. 17 of the Special Road Act. Several important postulates result from the cited structure of the legal provision: (i) this order may be imposed in the decision itself or in a separate resolution after the decision is issued and may only refer to the decision of the first instance body (ii) the order of immediate enforceability is not imposed ex officio, but at the request of the future public road administrator (iii) the applicant should justify imposing the order of immediate enforceability with the social and economic interest; however, the construction of a public road constituting a public purpose is insufficient argumentation, because imposing this order is exceptional in nature, dictated by special circumstances. In accordance with the content of the judgment of the Supreme Administrative Court of 27 February 2007. “(…) a necessary condition for issuing a permit is to establish that a justified case exists in the case.1” How to understand the concept of a justified case, when the legislator has not created its legal definition in the special road act, requires practice, experience and appropriate knowledge of the circumstances accompanying the road investment. The line of case law indicates through specific cases what the concept of a justified case means. For example, “improvement of road traffic safety, improvement of road transport, as well as planned investment implementation dates, or financing of the investment from European funds justify granting the decision on the permit for the implementation of the road investment the order of immediate enforceability.2” In turn, in accordance with the judgment of the Voivodeship Administrative Court in Łódź of 29 May 2018 “the argument contained in the application for granting the order of immediate enforceability regarding the need to limit the possibility of filing claims against the city by a private entity as a result of possible delays in the implementation of the investment constitutes a justified premise for granting such a order. Undoubtedly, we are dealing with the road administrator’s invocation of the city’s economic interest. It is also impossible to disagree with the thesis that improving communication on district and municipal streets is consistent with the public interest.3” It should be noted that the construction of the provision of art. 17 sec. 1 of the special road act does not result in an absolute order to immediately commence the implementation of the road investment under penalty of its being endangered. In the event of delays in starting the road investment, the possible consequences come down to the risk of repealing the order of immediate enforceability; whereby “(…) the commencement of a road investment is not only the construction of the road itself, but also preparatory works, which are not always related to the performance of the construction works themselves.4” However, the imposition of the rigour of immediate enforceability should be accompanied by caution, because it gives rise to serious legal consequences in the form of: (i) the obligation to immediately hand over the property, empty the premises and other rooms (ii) the right to actually take possession of the property by the relevant road manager (iii) the right to commence construction works (iv) the right to issue a construction log by the relevant body. It is also necessary to remember the important obligation imposed on the public road manager, reserved in art. 17 sec. 4 of the Special Road Act, according to which, if the decision referred to in sec. 1 concerns a property with a residential building or a building in which a residential premises have been separated, the relevant road manager is obliged, on the date of actual taking possession of the property, to indicate alternative premises. “This standard does not apply to cases in which the real estate occupied for public purposes is built up with an agricultural building, a building with commercial premises or a building used to meet needs other than residential.”
COMPENSATION FOR EXPROPRIATED REAL ESTATE
“The granting of compensation for real estate expropriated by operation of law shall be made in a separate proceeding than the proceeding on granting a permit for the implementation of a road investment.1” The legal structure of the mechanism for expropriating real estate for road purposes distinguishes the legal effect of expropriating real estate on the date on which the expropriation decision becomes final from the necessity to pay compensation in a separate compensation decision. Due to the divergent nature of the expropriation decision and the compensation decision, the adopted solution should be assessed as appropriate, transparent and ordering the sequence of necessary action steps. In accordance with procedural requirements, the decision establishing the amount of compensation shall be issued within 30 days from the date on which the decision on permitting the implementation of a road investment becomes final. If the expropriation decision has been subject to immediate enforceability, the compensation decision shall be issued within 60 days from the date of the aforementioned rigor. The guiding principle of expropriation of real estate requires that the amount of compensation be fair (Article 21 of the Constitution of the Republic of Poland) – “The amount of compensation should compensate the owner for the value of the property rights taken away. (…) Furthermore, full compensation, corresponding to the principle of full compensation adopted in Article 361 of the Civil Code (covering both the losses incurred – damnum emergens and the unobtained benefits – lucrum cessans), differs from fair compensation within the meaning of Article 21, section 2 of the Constitution.2” The compensation described above should correspond to the market value of the real estate, which is discussed in more detail in the next paragraph. If it is impossible to determine the market value of the real estate (e.g. due to the nature of the real estate or its absence on the real estate market), then the replacement value of the expropriated real estate is determined. It is worth remembering that the lack of finality of the expropriation decision does not in any way prevent the possibility of initiating and conducting administrative proceedings to determine fair compensation3. “The amount of compensation for the expropriation of real estate for roads is determined according to the condition of the real estate on the day of issuing the decision on the permit for the implementation of the road investment by the first instance body and according to its value on the day on which the amount of compensation is determined.4” In the case of proceedings for determining and paying compensation for the expropriation of real estate, transparent rules reserved for the valuation of real estate according to the UGN are applied. The legal definition of the market value of real estate is contained in the content of art. 151 of the UGN, according to which it is the estimated amount that can be obtained for the real estate on the day of valuation in a sale transaction concluded on market terms between the buyer and the seller, who have a firm intention to conclude an agreement, act with discernment and proceed prudently and are not in a forced situation. In practice, when assessing the market value of real estate, the following postulates are followed – “(…) in particular, its type, location, manner of use, purpose, condition of the real estate and current prices in real estate trading are taken into account. The value of the real estate for compensation purposes is determined according to its current manner of use, if the purpose of the real estate, consistent with the purpose of expropriation, does not increase its value.5” In accordance with the content of art. 156 of the UGN, a valuation report is prepared that reflects the market value of the real estate and the material result of the expert’s work.6 Formal requirements have been reserved for the valuation report as an official document prepared by a qualified property appraiser – “In addition to the subject, scope, date and purpose of the valuation, the valuation report must indicate the formal basis, description of the condition of the real estate and its purpose together with attached photographic documentation, analysis of the real estate market, description of the selected valuation method, calculations performed and, of course – the valuation result, rounded to a full sum. The result must be justified.”7 The essence of the valuation report assumes that it should be prepared based on the current circumstances on the real estate market. As a result, the period of validity of this document was provided by the legislator as twelve months, subject to the possibility of its updating in the form of a clause attached to the relevant document.
SUMMARY
The procedure for expropriating real estate for public roads is a departure from the general rule of property protection established in the Constitution of the Republic of Poland. The sole premise justifying the application of the procedure for expropriating real estate in relation to a citizen is the public purpose premise – “The constitutionally protected right of ownership cannot be interpreted broadly. (…) Limiting the right of ownership by taking it away from the owner must be strictly in accordance with the regulations, which in practice means that only the actually existing course of a public road on the land allows taking away the owner’s right and establishing ownership in favor of a public entity.”1 The institution of expropriation of real estate is implemented on the basis of the delicate matter of the contact between the public interest and the interest of the individual. Due to the undeniable counterbalance of the forces of public administration bodies towards the citizen and the compulsory nature of the act of expropriation, the deprivation or limitation of the right of ownership should be accompanied by extraordinary precision and caution in the application of generally applicable legal provisions. Nowadays, the implementation of infrastructure projects is inevitable, and the expansion of the expressway and motorway network is an inseparable element of the development of urban agglomerations. As a result, it is difficult to imagine today’s world of road projects and investments without an efficiently functioning procedure for the expropriation of real estate. However, special care and caution should be taken when a citizen is deprived of the right to property in the name of achieving a public purpose, so that the compensation received constitutes just compensation.
Managing Partner ALICJA SŁAWIŃSKA AS LAW FIRM
attorney at law
