Arche Władysław Grochowski.
Slowing down the development of the tourism sector (HoReCa and MICE), and thus the growth of GDP from this sector, and causing Poles to increasingly take their capital abroad, are just some of the possible negative socio-economic consequences of the amendment to the Act on amending the Act on the ownership of premises, authored by the Ministry of Development and Technology, as pointed out by the well-known hotelier and philanthropist, Arche President Władysław Grochowski.
As part of the public consultations conducted until February 5 this year, Arche S.A. submitted comments on the presented draft amendment to the law. It is worth recalling that this is not the first idea of the Ministry of Development and Technology on this matter. In mid-December last year, on the X platform, Tomasz Lewandowski, Deputy Minister in the Ministry of Development and Technology, belonging to the New Left, informed that his ministry was preparing an amendment to the regulations on property ownership. The politician wanted to introduce a complete ban on separating premises as independent units in collective residential buildings (hotels, student dormitories, senior homes, etc.). However, under the influence of enormous criticism related to the possible fatal consequences and the lack of consultations on this matter, he withdrew from the idea, only to replace it with another project in mid-January this year.
— This is another unnecessary overregulation, because the current law can completely eliminate the problem of so-called “apartments in hotels” that the Ministry of Development and Technology wants to combat. In principle, the matter can be resolved by streamlining the control procedures of the building supervision authority and leaving the current legal regulations in this regard unchanged, as well as applying a uniform, consistent interpretation of the regulations by administrative bodies throughout the country. It is also worth emphasizing that the amendment will deprive hotels with a dispersed ownership structure, often owned by our seniors, of the chance to supplement their modest pensions and benefit from owner stays, while allowing retirees from Germany or France, whose funds are invested in Poland by huge REIT funds, to earn money from hospitality without any obstacles or restrictions. This is a sick situation and discrimination against our citizens, at the expense of large corporations — says Władysław Grochowski, President of Arche.
Small Polish investors will lose out
The latest draft by the Ministry of Development and Technology concerning the amendment to the Act on the ownership of premises significantly changes the rules for developers, private investors, and municipalities, but it no longer completely excludes the separation of separate premises in such buildings. However, it introduces serious restrictions on the separation of premises in collective residential buildings (e.g., hotels, aparthotels). This will only be possible if the following conditions are met cumulatively: regarding the standard of the residential or commercial unit, a minimum area of 25 sq m, and the adoption of an appropriate resolution by the municipal council defining the rules for issuing certificates of independence of premises in such buildings. The lack of such a resolution means no possibility of separating premises in hotel buildings and other collective residential buildings. The new regulations are expected to come into force very quickly, as early as January 1, 2027.
— Collective residential facilities, which include hotels, are buildings intended for temporary stays, not for permanent residence. Therefore, creating new legislation to combat “apartments in hotels” is a great misunderstanding, because there are already regulations and services that should combat such a phenomenon. In essence, a long-term change of purpose of a property without notification to the building supervision is an unauthorized act. And a PINB inspection can suspend the use of the facility, because a change in the method of use requires formal notification to the starosta/city president. The proposed amendment is merely an overregulation carrying many negative socio-economic consequences, resulting from a wrongly identified problem and assumptions. If a building permit was issued for a hotel building, then the premises located therein — regardless of whether they are legally separated or not, whether they have a kitchen or not — must be used for providing hotel services, not for living — explains Władysław Grochowski.
Experts agree: it’s a legal blunder
However, as Dr. Agnieszka Grabowska-Toś, legal counsel, managing partner at Kancelaria Radców Prawnych Kania Stachura Toś, and expert of the Real Estate Committee of the National Chamber of Commerce, points out in her analysis for inwestycjewkurortach.pl:
“The Ministry of Development and Technology incorrectly diagnoses the essence of the problem, and consequently resorts to measures that will not only fail to solve the indicated pathologies but may generate further, much more serious side effects. The use of premises in collective residential buildings as apartments does not depend on whether these premises constitute separate ownership or are used on the basis of other legal titles. If an investor obtained a building permit for a collective residential building – a hotel, dormitory, or guesthouse – then the premises located therein, regardless of their legal status or equipment, must be used in accordance with the function of the facility, i.e., for temporary stays or providing hotel services. Existing regulations, both those concerning apartments and temporary stays, explicitly state this. These regulations are contained in the Regulation of the Minister of Infrastructure of April 12, 2012, on the technical conditions that buildings and their location should meet (Journal of Laws 2022.1225). It precisely defines the definition of a residential unit — whose essence is permanent residence and satisfying housing needs, and the definition of a collective residential building intended for temporary stays. Therefore, if someone bought a unit located in a hotel building, which is a collective residential building, for investment purposes and uses it to satisfy housing needs, then we are dealing with a change in the method of use made without the required procedures. This change has nothing to do with the independence of the unit. It requires efficient control mechanisms from building supervision authorities, not the introduction of restrictions on the legal trading of units realized in collective residential buildings.
The proposed regulation also has serious systemic flaws. Firstly, it forces the design of hotel units in accordance with the technical requirements for residential or commercial units. In practice, this means that an investor, wanting to separate units, will have to design them like apartments, even though they are building a hotel. Can such a facility still be considered a collective residential building if classic apartments are designed within it? We may be dealing here with exactly the opposite interpretation by officials and a conflict with the local zoning plan. It is not excluded that at the stage of issuing a building permit, the authority will consider that the project actually concerns a residential (multi-family) or commercial building, not a hotel, and will refuse the permit due to non-compliance with the local plan or the decision on development conditions. The draft law thus creates a hybrid object: formally a hotel, but actually with units designed as apartments or commercial units, solely so that they can be traded. It also remains unclear whether the investor will have the freedom to choose whether the units should meet the technical conditions for residential or commercial units, and consequently – what type of unit will be subject to separate ownership. This kind of imprecision in regulations poses interpretative risks, both at the design stage and during the sale of units. Additional doubts are raised by the minimum area of the unit. Today it is 25 sq m, but this requirement does not apply to units in collective residential buildings. The proposed regulations do not unequivocally resolve whether, in a situation where hotel units of a smaller area are designed, which is currently permissible, it will be possible to obtain certificates of independence for them. This is another example of inconsistency that in practice can lead to decision-making paralysis on the part of the authorities.”
However, as experts from inwestycjewkurortach.pl emphasize: “The most serious objections are raised by the transfer of competence to municipal councils to define ‘rules for establishing separate ownership of premises’ without indicating the limits of this authorization. Additionally, the project uses the wording that the municipal council ‘may’ adopt an appropriate resolution. However, the justification attached to the draft law indicates that the lack of such a resolution is intended to block the possibility of separating premises. This contradiction should be unequivocally removed. Otherwise, municipalities will gain a tool to arbitrarily introduce additional, extra-legal requirements, which will lead to glaring differences in the treatment of investors and legal chaos. This violates the constitutional principle of equality before the law – an investor in one municipality will be able to separate premises, while in a neighboring one, with an identical facility, they will not. Moreover, each municipality will be able to introduce a resolution at any time prohibiting the separation of premises or establishing conditions impossible to meet, which will significantly reduce the security of real estate transactions. Granting municipalities such far-reaching, discretionary competence to block the sale of premises in hotel investments (designed in accordance with technical law for hotels, not apartments) also constitutes a serious violation of the constitutional principle of freedom of economic activity and protection of property rights. Instead of solving a real problem, the proposed regulation may effectively block an entire market segment, which is of significant economic importance, especially in tourist destinations.”
Furthermore, Arche President Władysław Grochowski notes that the proposed amendment also entails a number of other negative consequences, such as:
- Planning disorder – for example, in spa municipalities, the priority, especially in the first line from the sea, is the zoning plan’s provision for tourism, health, etc. services.
- Decrease in the number of revitalized historical objects, limitation of sustainable revitalization of excluded post-industrial areas and depopulating towns and rural areas.
- Increase in prices of small units (growing demand / lack of supply, as many people are looking for small apartments, e.g., students, workers, retirees).
- Slowing down of the nascent segment of serviced small senior units.
- Possible corruption and arbitrariness in the adoption of resolutions by municipal councils.
- Even greater growth of bureaucracy, huge increase in investment risk and costs, and thus the prices of units offered for sale.
About Arche
The company carried out its first investments in Warsaw and Siedlce, and for two decades has been building throughout Poland. Currently, Arche is the largest Polish hotel chain with domestic capital, bringing together over 2,000 investors owning a total of over 3,500 hotel rooms and apartments, as well as a residential developer. The company started its operations 35 years ago and has built over 12,000 apartments and houses in its history, and will soon launch its 24th facility in its Arche Metalowiec Muszyna collection, thus having a total of approximately 4,800 rooms. Arche SA President Władysław Grochowski, together with his wife, through the Lena Grochowska Foundation, has also been conducting extensive activities for many years, integrating communities, activating socially excluded people, those with intellectual disabilities, and the most needy. For this, at the end of 2023, he received one of the most important awards in the world at a gala in Geneva — the prestigious Nansen Award, presented by UN High Commissioner Filippo Grandi. And at the end of 2024, the Indian Mother Teresa of Calcutta Award.
- Attached – letter (pdf) from Arche President regarding comments on the draft amendment to the Act on the ownership of premises.
