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The Warsaw Voice » Real Estate » October 1, 2010
The Real Estate Voice
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Reversed Roles
October 1, 2010   
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A growing number of construction projects in Polish cities are either derailed or delayed by owners of neighboring properties.

Protests against a construction project imply significant delays. As a result, cities suffer considerable losses, since their development is effectively restrained. But the investors suffer the most in such cases. Growing delays in investment projects may result in tangible damage to the investors’ budgets. Fortunately, there are several strategies investors can adopt to protect themselves.

Owners of properties directly neighboring the construction site may lodge an appeal against the building permit to a higher authority or refer the case to an administrative court. According to the building law, these proprietors are parties to the proceedings pertaining to the building permit. Therefore, they have the right to appeal against decisions issued in the course of such proceedings.

However, this right is frequently abused and exercised in bad faith. Seeking to hammer out compensation, neighbors may complain about a loss of daylight, noise or intensified traffic. In the vast majority of cases these arguments prove to be untrue, completely unjustified and irrelevant to the case.

In order to avoid the consequences of delays, investors frequently accept the protesters’ demands, paying them the required “indemnity.” Given banks’ current lending policies, an appeal against a building permit makes it impossible for the investor to obtain funds needed for construction. As a consequence, the expected deadline for completing the project must be extended.

Bending to the protesters’ demands is not the only solution. The investor should resist such pressure and, simultaneously, protect their own interests. How can this be done? It is enough to start a lawsuit against the protesters demanding compensation.

To be effective, such a lawsuit needs to prove three things: (1) the incurred loss, (2) the harm done by the protester, and (3) the link between the protest and the loss incurred. Furthermore, it is of fundamental importance to show that the protester acted willfully and unlawfully.

The extension of proceedings referring to the building permit results in a loss that may be defined as the cost of property maintenance until the end of the proceedings. Considering that this may sometimes take several years, the anticipated extent of loss may exceed the worst expectations.

The biggest problem lies in proving the illegal nature of the protesters’ activities. The appeal itself is absolutely lawful. So what raises legal doubts? The protesters’ unethical attitude—withdrawing the appeal in exchange for indemnity.

In many cases a lawsuit may be avoided. Sometimes summons for payment repeatedly addressed to protesters (indicating the extent of loss as well as the false nature of their arguments) will bring the desired result. Fearing the costs they could face, they may very well refrain from further appeals.

Katarzyna Bielat, Lawyer at Tomczak&Partners Law Office specializes in Real Estate law.
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