On 9 August 2011 the provisions of the Act of 29 July 2005 on the conversion of perpetual usufruct rights into property ownership rights bounding municipalities to assign allowances (up to 90%) ceased to apply. This is related to the expiry of the deadline set in a sentence of the Constitutional Tribunal of the Republic of Poland of 26 January 2010, in which the Court ruled that those provisions are inconsistent with the Basic Law, since former owners (local governments) have been deprived of their right to dispose of the property. The obligation to apply allowances resulted in local government units’ lower income, with no possibility of obtaining additional income nor the possibility of gaining compensation. But it must be noted that rules on subsidies do not change in relation to land belonging to the Treasury. Simultaneously, on 28 July 2011, the Sejm adopted amendments to that Act. They are primarily designed to fasten and facilitate the conversion process. Under the new rules, the municipality will be able to update the annual fee for perpetual usufruct once every 3 years, or less often. Once a year, the perpetual usufruct holder will be able to request for the annual fee updating. The right of converting the perpetual usufruct right into an ownership right will also apply to other users, including the legal entities, which have hitherto been deprived of such opportunities. Also the co-holders of the perpetual usufruct right will be able to place a request – but only if the sum of their shares reach at least the half of the total sum (until now they were able to do it only all together). However, state and local legal entities, foreigners, foreign companies and the Polish Association of Allotment Holders will not hold such rights.

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