On 25 April 2022 the Court of Appeal in Krakow dismissed the appeal of the Municipality of Krakow against the judgment of the Regional Court in Krakow, favourable for the Firm’s Client, and awarding substantial damages from the Municipality of Kraków.
The Firm’s Client sought compensation from the Municipality of Krakow pursuant to Article 36.3 of the Act of 27 March 2003 on Spatial Planning and Development in connection with a reduction in the value of a real estate asset, and consequently, a reduction in the sale price of such asset. The reduction resulted from the entry into force of the local zoning plan limiting the possibility of developing the property in relation to an earlier decision on the conditions of such development issued in favour of the Firm’s Client. The Regional Court in Krakow awarded the Firm’s Client damages of over half a million PLN due from the Municipality of Krakow – a decision which the Municipality appealed.
The Court of Appeal fully agreed with the Firm’s argument that the final repeal of the local zoning plan by the Supreme Administrative Court in the course of the case for compensation did not rectify the damage to the property of the Firm’s client, who sold the asset at a substantially reduced price.
The Court of Appeal also agreed with the Firm that submitting comments to the draft local zoning plan would not prevent the introduction of restrictions on development possibilities, and the Municipality of Krakow, knowing the content of the decisions on development conditions issued, must take into account the statutory consequences of enacting plans less favourable to property owners.
File number: I ACa 1090/20
