CONSTRUCTION REFORM: Building Act for the 21st Century?

At the beginning of this year, a draft of the act on construction and an act on land-use planning entered the legislative procedure. These acts were to replace the outdated building act. The aim of the new regulation is to adapt the legislation in the field of construction and land-use planning for the needs of the 21st century. However, the proposed changes have been the subject of wide discussion by the professional public and have received a number of comments in both previous comment procedures.

In the 19th century, the issue of construction and land-use planning was regulated only at the level of towns and villages. The boom in construction activity during the first republic was stopped by the Second World War, and the subsequent development of construction was associated with the transition to socialism. The Act on Land-use Planning and Construction of Municipalities[1] from the year 1949 repealed all previously valid building statutes and became a comprehensive regulation of building legislation and construction planning at the state level.

However, this act was not sufficient for socialist construction, as it concerned only the general level of land-use planning. This is one of the reasons why it was replaced in the year 1958 by the Building Order Act[2] and the Land-use Planning Act[3]. Finally, the need for greater centralization of land-use planning and building order in line with the political direction resulted in the adoption of the Building Act[4], in the year 1976, which is, with amendments, valid to this day.

The current Building Act is thus the first complex regulation of building law and land-use planning. After the change of political establishment in the year 1989 and also after the division of Czechoslovakia, the Building Act required several amendments that addressed the inconsistency of the law with constitutional and social conditions. This act has been in force in Slovakia for almost 45 years and, despite a large number of amendments, it is already considerably outdated, inflexible and, importantly, does not meet the current social conditions or the needs of construction.

It was therefore no surprise that in May 2021, Deputy Prime Minister Štefan Holý submitted proposals for new legislation on construction and land-use planning to an inter-ministerial comment procedure. Following the historical model, the legislation is to be divided into two acts, namely the Construction Act and the Land-use Planning Act. A number of comments from entities from various fields were submitted to the proposals in the inter-ministerial comment procedure. As part of the evaluation of the comment procedure, the proposals were revised and resubmitted. The inter-ministerial comment procedure for the second version of the proposals ended on 21 July 2021 and, as with the first version, the proposals did not meet with positive reactions.

The aim of the proposed changes is to bring a modern legislation, which will adapt construction and land-use planning to the conditions and needs of the 21st century. The new legislation should make the construction proceedings clearer and faster. The key to achieving this goal is the reduction of the number of often duplicate administrative tasks, which should also be helped by the information system and the electronization of the approval process.

So, what should new construction proceedings look like?

The very first version of the proposals became the subject of wide discussion during the comment procedure. The proposals had the ambition to eliminate the most serious problems in the long run. The problem, however, was that they were not balanced and presumed fundamental changes in the redistribution of powers in both construction proceedings and land-use planning.

Perhaps the most important were the changes related to the acceleration of the proceedings. Territorial proceedings should no longer take place in municipalities with a zoning plan. Thanks to the Urbion electronic system, deadlines were to be shortened and often inefficient delivery was to be eliminated. In the interest of acceleration of the proceedings, serious changes in competence were also taken into account. Today, the activities of building authorities are performed by municipalities as part of the delegated performance of state administration. Newly, however, this agenda was to be taken over by the state through the newly established Office for Land-use Planning and Construction of the Slovak Republic.

Another fundamental change was the transfer of part of the competencies of building authorities to building designers. In addition to the project documentation, they were to be also required to prepare a draft construction plan and would also be responsible for its discussion.

The proposals added an obligation for municipalities to draw up a zoning plan. This obligation goes hand in hand with the abolition of territorial proceedings, which would already be a superfluous process in such a situation. Another fundamental competence change was to be that the Office for Land-use Planning and Construction of the Slovak Republic could also decide on the zoning plan of a municipality or Higher territorial unit, even without the consent of the municipality or Higher territorial unit itself.

A large number of comments were also made in connection with the fact that the proposals omitted the formal participation of the public in the permitting proceedings. The public could only express its opinion when discussing the zoning plan, within a short time period of 15 days. Similarly, disproportionately short deadlines for decision-making of 14 or 15 days could then have a negative impact on the expert assessment of the construction plan or the proposed zoning plan. Moreover, if the competent authorities did not respond within such a time period, their consent would be presumed.

Based on the proposals, it would no longer be possible to obtain an additional building permit, and thus the "legalization" of an unauthorized construction should become a thing of the past. If the building was not approved, it would not be possible to connect it to the engineering network and its removal could be ordered. Another of the changes was a proposal to adjust the fee for the building permit. The proposed amendment set this fee at 1.25% of the construction costs, the amount of which should not have been limited. The building permit would therefore be more expensive in proportion to the value of the building, which could undoubtedly have resulted in rising real estate prices.

The fact that the Code of Administrative Proceeding was not to be applied when making decisions also met with negative reactions. Therefore, the basic issues such as the course of the proceedings themselves, their participants, their rights and obligations or the form of the decision would not be regulated. The time periods, delivery of documents or remedies would not be regulated either.

The first proposal for a new legislation on construction and land-use planning earned more than 4,000 comments in the inter-ministerial comment procedure, of which more than 2,500 were fundamental. To a large extent, these were comments from municipalities and local governments, but also from the builders themselves. On the basis of these comments, the proposals were revised and re-submitted to the comment procedure.

The evaluation of the comments brought the new proposals

Despite great criticism and a number of comments, the new proposals of legislation on construction and land-use planning differ only minimally from the original ones.

Re-submitted proposals continue to provide for the construction proceedings to be "controlled" by the building designer. They will prepare not only the project documentation, but also the draft construction plan and will be responsible for their discussion. A substantial part of the decision-making on construction therefore rests with the building designer as a private person paid by the builder, who, moreover, has no obligation to be unbiased. The decision-making of the building authority leading to the building permit follows this procedure of the building designer. However, due to the vagueness of the legislation and the set deadlines, there is a risk that the decision-making of the building authority would eventually become only "approval" of the documents prepared by the building designer.

Competences related to land-use planning are still concentrated on the newly established Office for Land-use Planning and Exhibition of the Slovak Republic. The office should be headed by a politically nominated and virtually irrevocable chairman. The Office should decide, inter alia, disputes between the concerned state and local government bodies. Such a proposed procedure disproportionately interferes with the self-governing competences of municipalities and Higher territorial units in deciding on their territory.

Both proposals continue to limit the public's ability to participate in territorial decision-making. The public will thus have little opportunity to influence construction in their neighbourhood. The participation of the owners of neighbouring buildings or land in the construction proceedings is regulated confusingly and unclearly. The construction plan should be delivered to the concerned owners only through the information system, despite the fact that not every person has an activated electronic mailbox (and the obligation to activate it does not arise). Neither the building designer nor the building authority must deal with any comments from the concerned owners. The objections of the concerned owners will subsequently have to be dealt with by the appeal body within a short 15-day time period, provided that the concerned owner is active and files an appeal. In the case of a decision to stay proceedings, the legislation is confusing, and it is not clear whether a decision will be issued, which is important for the expiry of the time period for submitting an administrative complaint.

A more fundamental change compared to the first proposals is the Code of Administrative Proceeding is applicable in the proceedings. The new proposals no longer preclude the application of the Code of Administrative Proceeding to proceedings on a construction plan. However, the application of the provisions relating to the participants in the proceedings, delivery, but in particular the provisions of the Code of Administrative Proceeding governing the review of the decision, is precluded. However, the Code of Administrative Proceeding does not apply to other proceedings. The proposals also do not regulate the manner in which the building authority is to act if, for example, it wants to refuse to issue a decision on the construction plan, refuse to verify the construction project or its approval. The decision-making process thus remains insufficiently and vaguely regulated, or not at all regulated.

Like the first variant of the proposals for the new legislation on construction and land-use planning, the second revised variant did not stand in the eyes of the professional public. The changes are considered to be cosmetic and insufficient, as they do not eliminate the fundamental problems that were already criticized in the first proposals. It is therefore not surprising that a number of comments were also submitted on the second proposals in the inter-ministerial comment procedure.

Criticism from the public is justified

In conclusion, the acceleration of the administrative process of construction due to the simplification and clarification of the system can be a welcome change. However, in relation to the fulfilment of these objectives, the proposals are not sufficiently balanced in relation to the public, local governments or the bodies concerned.

As in the first inter-ministerial comment procedure, a large number of fundamental comments were submitted in the comment procedure on the second variant of proposals. The comments were again submitted mainly by municipalities, local governments and builders. These new comments are currently being evaluated. However, as the first comments on the fundamental issues have still not been removed, it may be necessary to review both proposals and adopt much more substantial changes.

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[1] Act no. 280/1949 Coll., on Land-use Planning and Construction of Municipalities

[2] Act no. 87/1958 Coll., on Building Order

[3] Act no. 84/1958 Coll., on Land-use Planning

[4] Act no. 50/1976 Coll., on Land-use Planning and Building Order (the Building Act)