On 24 September 2023, part of the provisions of the Act of 7 July 2023 amending the Act on spatial planning and development and certain other acts (Journal of Laws of 2023, item 1688) (hereinafter: the ‘Amending Act’) entered into force.
As a result of the amendment, a planning tool in the form of an integrated investment plan as a planning act (hereinafter: ‘Integrated Investment Plan’ or ‘IIP’) shall enable the amendment or replacement of a local spatial development plan (hereinafter: ‘LSDP’). A prerequisite for the enactment of an IIP is an urban development agreement, which is the subject of this issue.
An urban development agreement is an agreement between an investor and a municipality in which the investor undertakes to carry out or cover the costs of a so-called supplementary investment (for example technical infrastructure, social infrastructure or residential units) on the terms and conditions indicated in the urban development agreement.
The urban development agreement:
(i) the catalogue of obligations between the developer and the municipality is open,
(ii) under pain of nullity, it shall be concluded in the specific form of a notarial deed,
(iii) the IIP constitutes a mandatory appendix to the urban development agreement,
(iv) is an effective legal and formal tool between the private sector in the form of an investor and the local government unit in the form of a municipality.
Examples of obligations set out in an urban development agreement:
(i) on the investor’s part, e.g. the transfer to the municipality of real estate that is part of the main project, e.g. residential units that the municipality shall allocate and use as social housing,
(ii) on the part of the municipality, e.g. the implementation of a complementary investment in the event that it falls within the scope of the municipality’s tasks.
It should be noted that the legal effects of the Urban Development Agreement arise from the date of entry into force of the IIP annexed to the Urban Development Agreement.
*Please refer to the issue of the Integrated Investment Plan I wrote,
**The Urban Development Agreement may entitle the developer to be exempted in whole or in part from the fee for the increase in the value of the property as a result of the adoption of the IIP.
30 September 2023
