Lifting of administrative burden related to the transfer of agricultural land
The strict regulation on the transfer of agricultural land has been annulled by the Constitutional Court of the Slovak Republic (the “Constitutional Court”) after an almost 4 years debate on its legality. In practice, the findings of the Constitutional Court will materialize mainly in the elimination of the statutory administrative proceeding encompassing an envisaged transfer of agricultural land by certain entities.
Scope and extent of the regulation
The process of acquisition of agricultural land is provided within the Act No. 140/2014 Coll. on Acquisition of Ownership of Agricultural Land (the “Act”), which sets out strict regulation of conditions relating to the acquisition of ownership title of agricultural land. The regulation was, from its outset, subject to wide criticism from the expert public. Subsequently, the Constitutional Court has engaged in a review of the regulation and declared the regulation as unconstitutional. Its findings were published in the Collection of Laws on 11 February 2019 and as of this day, the Sections 4, 5, and 6 of the Act lost their effect.
Prior to the findings of the Constitutional Court, the Act provided for a specific regime of the transfer of ownership of agricultural land, namely with respect to the range of entities/individuals which could acquire the ownership without restrictions. The owner of an agricultural land could freely transfer the ownership without any specific restrictions set out by the Act to the following entities:
a person carrying out agricultural production as business at least 3 years prior to the date on which the transfer of ownership of the agricultural land is concluded in the municipality where the agricultural land is located, or
a co-owner of the agricultural land, in the event of a transfer of a co-ownership share under special regulations, or
Apart from these entities/individuals, the owner of the agricultural land was permitted by law to transfer its ownership with certain restrictions in the manner laid down in the abolished provisions of Sections 4, 5 and 6 of the Act.
Acquisition of ownership to agricultural land under the “new rules”
The above-stated findings of the Constitutional Court specifically result in the abolishment of the following statutory duties set out within the Sections 4, 5 and 6 of the Act:
Obligation to publish an offer to sell the land – within a specific register for at least 15 days and simultaneously on the information board in the municipality, where the agricultural land is located.
Obligation to give preference to an acquiror from the municipality or the neighboring municipality – even after the offer was published in the manner stated above, the transferor was obliged to prefer an acquirer from the municipality where the agricultural land is located and, in case of several candidates, the acquirer from the neighboring municipality was preferred up by the law the acquirer from another municipality.
Obligation to request the relevant District Office, municipality and SPPK to verify the fulfilment of statutory conditions – the obligation of the acquiror to prove that he has been engaged in agricultural production as a business in a municipality adjacent to the municipality in which the transferred land was located, alternatively beyond such place.
Certain mandatory requirements of the Agreement on the Transfer of Ownership to Agricultural Land – the obligation of the contracting parties to enclose documents certifying the fulfilment of the above-stated statutory obligations in order to authorize intabulation within the Cadastre of Real Estate.
Although the aforementioned findings abolish the administrative and time-consuming nature of the transfer of ownership of the agricultural land, it cannot be excluded that the regulation in question will soon be subject to further legislative changes.
For the sake of completeness, we note that the aforementioned findings are without prejudice to the limitations of reciprocal prohibition on the acquisition of ownership of the agricultural land. These limitations apply to those entities/individuals that are subject to the law of such a State that does not allow Slovak entities/individuals to acquire ownership of the agricultural land in that State.