New Construction Law

The new construction law was quite a hot topic on the real estate scene which you definitely must have stumbled upon in the last months. Both developers as well as the general public yearned for its approval and there is not much to doubt when it comes to the reasons behind that. If you look at the current real estate market offer it is evident that it is getting increasingly more difficult to find a place for the general public. Timely and tedious permit approvals for new buildings not only increases the real estate prices but also curbs the city development in general.

What will the new law bring?

As long as the new construction law is implemented properly it will result in creation of independent development offices (authorities) managed centrally. These will fall under a larger central unit – a development administration office. Digitization of the sector should also add to the effectiveness as well as provide a back-testing system.

Given that the new construction law can be properly implemented, a system of independent development / construction authorities will be created. These will be managed centrally and will fall under the set of the state building administration. Digitization and a back-testing system should also help to increase efficiency.

At the same time, the processes scattered across several procedures should be reduced into a single oneWithin this framework all of the in-betweens will be streamlined alongside the actual permits. As a result, getting a development permit should not exceed one year’s time.

For better understanding, we summarized the most fundamental changes. There are five:

  1. Unified system of development authorities, their departments and local governments
  2. Changes in spatial planning acquired in a uniform regulated process
  3. Streamlined and quicker construction proceedings
  4. More strict conditions when it comes to repeated construction approvals
  5. Amendments to contracts between municipalities and investors in regards to future planning for specific spaces

When will the new construction law come into force?

Considering Czech red tapism we know very well that everything takes time. The new law should come into force on June 1, 2023. Some of its parts should be implemented already in the second half of 2022 and the first half of 2023. The most fundamental roadblock in the implementation of the new construction law stems primarily from the complexities in merging the building authorities.

Is it really that revolutionary?

The current law was enacted in 2006 and ever since has been depicted as the one that will bring about change and speed up approval processes. However, as we all know, this was not the case. We find it hard to believe that the long-awaited revolution is just around the corner. That approval procedures will quicken and construction development will increase significantly which in turn will increase the real estate market supply. In the opposite case we could become witnesses to even worse clarity to a process that is already demanding  from a communication and administrative standpoint.

That said, we only wish for one thing, which is for the promise that we’ve been given over and over for the last five years to finally be fulfilled.

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