1. Perpetual Usufruct in
Polish Law
Origin, content and application
English
version

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Index
Explanatory Memorandum ............................................................................... 4
Introduction ....................................................................................................... 5
The Perpetual Usufruct. Historical origin .......................................................... 6
The Perpetual Usufruct. Configuration, dynamic and content .......................... 8
Rights and duties of the usufructuary ............................................................. 11
The Perpetual Usufruct. Current trends in Polish Real State Law ................... 12

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Bibliography
DANIEL CHOJNACKI AND OTHERS Polonia: Un país generador de oportunidades. Claves legales para la
inversión, Warsaw: Polish Agencia for Enterprise Development, 2008.
DELOITTE ADVISORY SP. Z.O.O. AND POLISH AGENCY FOR FOREIGN INVESTMENTS ¿Cómo hacer negocios en
Polonia? Guía del inversionista en Polonia, Warsaw: 2008. ISBN 83-60049-48-3
CINCO DÍAS Guía del mercado inmobiliario 2007, Madrid: Cinco Días, 2007.
‘SERRANO INTERNACIONAL’ LEGAL OFFICE Aspectos administrativos, fiscales y legales de la inversión
inmobiliaria en Polonia, (www.serrano.pl)
ERNST & YOUNG Y DOMAŃSKI ZAKRZEWSKI PALINK Doing Business in Poland. Guía para hacer negocios
en Polonia, Warsaw: 2007

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Explanatory memorandum
The recent integration of Poland in the European Union, has increased the Spanish
investment made in that country, being the Real State industry one of the fauvorite
destinations for such investment. So, in the propper examination of the Polish legal system,
largely depend on the success or failure of any investment.
The nature of the current Polish real state law is far from the controlled and rigid
communist system of he past decades. However, even today there are still some legal
institutions inherited from that period such as the perpetual usufruct.
Over the next few lines, I will analyze the historical origin of this institution, its
configuration, and its nature, as well as its current trends and future prospects.

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Introduction
The regulation made by the Polish Civil Code
(Kodeks ciwilny) of property Law, can be described, in
general terms, as consisten with the nature of the
regulation that just makes the Spanish Law. However, it
is observed the existence of an institution somewhere
between property rights and a limited right of
ownership (such as the use, servitude, retention, joint
ownership, and mortgages), known as perpetual
usufruct (uzytkowanie wieczyste).
In the following lines, I will analyze the theoretical
and practical implications presented by this particular legal concept, yaking into account the
historical reasons that once identified the need of its creation, and some reasons that
currently have triggered the process of its progressive elimination.

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The Perpetual Usufruct
Its historical origin
The current configuration of the right or
Perpetual Usufruct has its historical origin during the
communist period, and as the final reason of its
creation, the necessary stimulus that the communist
Government had to give to promote housing
construction on public land. Obviously, after the
changes in the Polish legal system with the fall of
communism, its effects on the polish legal system has
been questionable. In fact, since 2005 has come into
force a law that gives the possibility of converting the
perpetual usufruct right to property, as I will analyze
later.
During the Stalinist years of the communist
period (from 1948 onwards), the housing market in
Poland had been virtually paralyzed by the tight control of the State carried out on the free
marketing of the soil. It has gone to establish a pre-emption law for the State against any
sale referred by a landlord. This, togehther with the indiscriminate expropiation of land that
both urban and rural areas were declared during the communist period, meant that the
State were itself the sole supplier of land in the housing market.

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Population growth in Poland 1946-2008 (in thousands)
+ 40%
The subsequent population growth experienced by the Polish cities during the decade
os 60’s and 70’s (view graphic above), forced the communist government to find alternative
ways to promote construction. Under the need to control growth and urban planning of
cities, they created the Perpetual Usufruct. His concesion depended on administrative
decisions wich led to problems of arbitrariness in their adjudication. It was also necessary to
follow a slow administrative process, wich led to the country have enormous needs for
construction of new housing.

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Perpetual Usufruct
Configuration, dynamic and content
Perpetual usufruct is together with the property, a subjetive relations provided in
conection with a public-owned property. These, maybe placed into the administrative
boundaries of cities, or not being found within these sites, may be including in some
General Urban Plan. The regulation of property is found on articles 46 and following of the
Polish Civil Code.
Articles 232 and following of the Polish Civil Code set out the basic content of the
perpetual usufruct right. It may be established by a strictly defined circle of owners (Treasury
or Territorial government authorities) in favor of another legal subject (natural or legal
person). Its constitution requires to be given in writing published and entered in the Register
of Property.
As the usufructuary rights, there is no difference to held by an owner. Thus, there is
absolutely equality in this regard.
With regard to the duration of the contract of constitution of the perpetual usufruct,
Polish law provides for a minimum duration of 40 years, setting a maximum limit of 99. It’s
possible to extend the concession of perpetual usufruct for another period of time within
the limits set out above, having to make such a request within 5 years immediately
preceding the termination date of the first contract.

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Content of the contract
The content of the contract will vary depending on the porpoise of it, or the
characteristics of the property.
If the property in which does constitute the right contains some kind of building, the
constitution of the perpetual usufruct should be done simultaneously with the sale of all
buildings contained therein. That’s because the right of perpetual usufruct can only be
predicated on the property. Likewise, ownership of the property and everything contained
therein must lie with the same person.
If the right of perpetual usufruct was granted for the purpose of constructing buildings
or facilities on the ground in question, it shall be specified in the contract the following
aspects:
 Commencement date and intended purpose of the
work
 The type of building or installation to be carried
 The obligation of the usufructuary to take
responsibility for the proper maintenance thereof
 The remuneration due to the usufructuary for
buildings and facilities built to date of termination of
the contract. Economic valuation thereof, shall be
made in the extinction of the contract as the
computing system agreed by the parties, or if no
disposition thereof, as the present value of the
buildings. The usufructuary will not be paid when the
things constructed wouldn’t correspond with what was initially agreed in the
contract.

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In practice, this type of contract does not contain clauses like these, so it is very
important to examine the specific conditions on which does constitute the perpetual
usufruct. The owner may terminate the contract, when the use made of the property has
been contrary to the clauses agreed by the parties.
Dynamic of the contract
At the time of constitution of the contract, the usufructuary shall pay the first
installment. After that, he would be obligated to pay an annual fee.
The amount of the first fee, can take values of between 15% and 25% of the value of
the land on which it is constitute the perpetual usufruct. The remaining annual installments,
would take values of between 0,3% and 3% of the value of the land, and they must be payed
before the first of march. The determination of the fee depends on the purpose for which
perpetual usufruct is constituted.

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Rights and duties of the usufructuary
The usufructuary is obliged to meet the payment of fees and to use its right as
stipulated in the contract of perpetual usufruct constitution
The usufructuary has the right not to
be violated in the use and enjoyment of
the property by third parties, as long as its
conduct would be consistent with what
was agreed in the contract.
The usufructuary may dispose of and
convey its right to perpetual usufruct, both
inter vivos and mortis causa. With regard
to the rules governing such transfers, it
shall be apply by analogy Articles 237 and following of the Polish Civil Code.
The buildings already constructed on the property at the time of the creation of the
perpetual usufruct right, as the subsequently made therein, shall be property of the
usufructuary. The property of the buildings contained in the land, and the right of perpetual
usufruct on it, may not belong to two different subjects. The transfer of the ownership of the
buildings cannot be done without the corresponding transfer of the perpetual usufruct.
Likewise, the right of ownership of the property (publicly owned) can only be transmitted to
the usufructuary thereof.

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The Perpetual Usufruct
Current trends in Polish Real State Law
Currently, the housing market does not distinguish between ownership and perpetual
usufruct. Both of these rights, without distinction, are the subject of property transactions
reaching the terrains the same prices, regardless of whether it is right to ownership or
perpetual usufruct right. In particular, perpetual usufruct does
not prevent the realization of real state and its successful
commercialization.
It is important to note that in October of 2005, came into
force the Law of 29 of July of 2005 of the conversion of
perpetual usufruct right to property right. The objective
pursued by that Law is to remove from the Polish legal system
the legal concept or perpetual usufruct. The Law has enabled a
period of time (until December 31, 2005) to request the
conversion.
To apply for the conversion, it is necessary that the property on which was on
perpetual usufruct right have been built or is going to be built housing or garages, or that the
property would be a rural property. Conversion may be request by the holder of perpetual
usufruct right, at the time to entry into force to law of July 29, 2005. In return for the
conversion, the usufructuary must pay the property owner the amount determined by
administrative decision.