This content is from: Local Insights

Slovakia: Limitations on ownership rights

Daniel FutejRudolf Sivák
A new legislative proposal which restricts the acquisition of agricultural land in Slovakia by foreign persons was submitted to the Slovak Parliament. Even though it has not been approved yet (it is a governmental draft and the government has majority in Parliament), it does deserve attention.

As of May 1 2014, a limitation on the acquisition of agricultural land by foreign natural persons from EU states no longer applies. In this respect, the Slovak Government prepared a draft with the aim of regulating the acquisition of agricultural land. The new legislation will ensure that agricultural land is acquired for agricultural purposes and not as speculative purchases.

New rules restrict the transferors'´ freedom to transfer (sale and donation) ownership of agricultural land to whomever they want. The transferor of agricultural land has to follow specific procedures as set out in legislation; they must announce for at least 15 days the offer for transfer of agricultural land on a public registry on the website of the Ministry of Agriculture and Rural Development (the Ministry), on an official noticeboard of the municipality where the land is located and local newspapers (depending on the size of land to be transferred). The price which the transferor would like to receive for the land should also be contained in the announcement.

Based on the announcement, the transferor should receive offers from eligible buyers. An eligible buyer is a person who must meet the following requirements: (i) permanent residence or seat in Slovakia for at least 10 years; (ii) has done business in agricultural production for at least three years before the conclusion of contract on transfer of ownership to agricultural land; or (iii) is a natural person, active in agricultural production in an employment relationship or other employment relationship for at least three years before the conclusion of the transfer of ownership contract.

Each eligible buyer who is interested on the announced offer for sale should register their interest on the public registry website maintained by the Ministry.

Besides the limitations, the seller is free to choose which eligible person they will sell the agricultural land to. In case no eligible person submits an offer, the transferor may also transfer agricultural land to a person who is not an eligible buyer.

Whether the procedure set out by law has been followed during the acquisition of agricultural land will be checked by the state authority in the district where the land is situated. The transferor has to submit an application for review before the conclusion of the transfer of agricultural land contract. The state authority will review the application and issue a decision within 30 days of the submission. The certificate of compliance with conditions set out by law forms an appendix to the transfer of ownership of agricultural land contract.

The above rules do not apply to all agricultural land. Exceptions include, for example: land of less than 2,000 m2; a built-up area of municipality; land outside the built-up area of municipality where, based on special legislation, it is intended to be used for purposes other than agricultural.

The rules do not apply to all buyers and transferees of land. For example, exemption from this procedure applies to transfers of land to co-owners or persons doing business in agriculture for at least three years before the conclusion of the transfer of ownership contract in the municipality in which the land is situated.

The draft will be further discussed in the Slovak Parliament at the end of June 2014, so it can be changed or not approved at all. This legislative proposal is already subject to much discussion, and has proven very controversial. Statements have been released that if the draft becomes a bill, it will be challenged at the Constitutional Court due to unjustified limitation of ownership rights. We will keep you up to date on further developments on this issue.

Daniel Futej and Rudolf Sivák

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