Real Estate Flash/Focus
2. 9. 2019
It is a well-known fact that the process of applying for and granting building permits in the Czech Republic is among the lengthiest in the world. Unfortunately, its lengthiness is not outweighed by the quality of decision-making. Quite the contrary: it gets in the way of meaningful, modern and functional architecture. This, however, should fundamentally change as of January 2022 if a new building bill is adopted and comes into effect.
According to the World Bank‘s Doing Business study, the Czech Republic ranked 156th out of 190 countries under review, with the median of the period required to obtain a building permit being 246 days. However, this figure should not be taken so seriously, as the World Bank’s ranking fails to take into account the fact that building permits in the Czech Republic are granted as a result of the authorisation process that is, in most cases, preceded by the often longer planning proceedings. Moreover, these planning proceedings tend to involve twice as many opinions and various other issues and may also be preceded by EIA and dozens of other partial processes during which binding opinions issued by other authorities are reviewed and new ones are issued.
The main causes of today’s situation are the extremely complicated, numerous and continuously changing regulatory obstacles that thwart new constructions. They have become so robust over time that they are overshadowing the actual purpose of buildings and the decision-making process surrounding them. To cite but one example, under the latest major amendment to the Building Act, the building authority is not even entitled to assess the compliance of the construction plan with the zoning plan, and must act pursuant to the binding opinion of the zone planning authority. What is its purpose then? The whole system of building authorisations has degenerated into a huge bureaucratic organism feeding on itself.
The problems during the authorisation process cause companies to make limited offers of reconstructions and new constructions. That indirectly leads to pressure on property prices. Moreover, by the time a permit is finally granted, some buildings have already become morally obsolete or are no longer at the top globally or even in Europe in terms of technology, innovation or architecture. What’s more, legal regulations make it difficult to use brownfields and other free spaces in cities, which in turn makes investors occupy the surrounding open landscape, where they feel less pressure from the regulators.
In an effort to eliminate these problems, in June 2019, the Czech cabinet approved the intended subject-matter of the new building bill, which was prepared in cooperation with the Czech Chamber of Commerce and external experts in administrative law, zone planning, urban planning and architecture. The objective of the intended subject-matter of the bill is to completely recodify the construction law. The recodification should fundamentally streamline the authorisation process, eliminate delays and minimise the number of pending administrative proceedings. In addition to the emphasis on acceleration and streamlining, the intended subject-matter of the bill expects to fully digitise the construction agenda and to promote the unification of methodological management and the quality of state-controlled construction administration. The articulated bill will be prepared by the professional public of the Czech Chamber of Chartered Engineers and Technicians Engaged in Construction and the Czech Chamber of Architects.
The main objective of the recodification could be expressed by the motto: “single authority – single proceedings – single stamp”. To make this motto come true, the bill envisages a single system of regional construction authorities with local branches in municipalities. The supreme body will be the Highest Building Authority, for the time being located in Hradec Králové. The central and local administration will be separated, which will solve problems with political pressures, the transfer of costs to the self-governing units and the systemic (or institutional) bias.
The existing authorisation processes – i.e. planning proceedings, building authorisation proceedings, the EIA process and the often conflicting opinions issued by the authorities concerned – will be integrated into single proceedings, during which the building authority will produce a general decision approving/rejecting the construction. It will no longer be necessary to obtain binding opinions from the other authorities.
Another aim of the subject-matter of the bill is the overall digitisation of the construction agenda. Anonymised information on the status of the proceedings will become publicly available. A fully-fledged electronic administrative file, replacing paper files, will be kept for the participants, their representatives and the authorities. Furthermore, it will be possible (or even mandatory for legal entities and professionals in the field) to file electronic submissions in the information system, including project documentation and other attachments. The bill will also introduce a service for monitoring proceedings relating to owned property and a zone planning geoportal where all information about a certain territory will be available in electronic form, including digital technical maps, where all depicted engineering networks and other elements of the technical infrastructure in the territory will be legally binding.
A national spatial development plan in the form of a government decree is expected to be issued as one of the zone planning tools. Compared to the current status, it will be more binding, there will be higher legal certainty associated with it and the possibility of challenging zone planning documentation will be more limited. The national spatial development plan will contain specific nationally defined plans. One of the main ones is the liner infrastructure plan – with this, it will no longer be necessary to wait till the plans are reflected in documentations issued by regional and municipal authorities. The act will expressly lay down that higher-level zone planning documentation will have preference in application over the lower-level one.
In addition, it will be possible to lay down different requirements for urban planning and the use of land in municipalities based on local particularities in municipal zone planning documentation as opposed to nationally applicable requirements resulting from implementing decrees and technical standards. This will significantly empower municipalities in deciding on the use and development of their territory. Municipalities will also be given the express right to process zoning documentation drafts if they wish to do so.
Further, the concentration principle will be consistently applied in all proceedings. It will therefore not be possible to raise new objections that could have been raised earlier. The same will apply to the preparation of zone planning documentation. One of the most important changes is the introduction of a limitation period for issuing a first instance decision after which the system will automatically issue a building permit, thus ending the now common inactivity of the first instance building authority (it will be possible to lodge an appeal against such decision). A fundamental innovation will be the obligation of the appellate bodies to always decide on the merits, thus eliminating the ping-ponging of decisions, i.e. their annulments by the first instance building authority and referrals of the cases for further proceedings.
Author: František Korbel
Published on: Lexology