CZECH REPUBLIC Trends and Developments Contributed by: Matěj Manderla, Jan Wagner, Ivo Hartmann and Aleš Malach, Tenacta, advokátní kancelář, s.r.o.
for simple structures and 60 days for more complex cases. In addition, the appellate principle requires second-instance authorities to decide cases on the merits, rather than repeatedly remitting them to lower authorities. This reduces the risk of prolonged admin - istrative cycles. Digitalisation (the Transitional “Bypass” Regime) Digitalisation was intended to constitute the central pillar of the new Building Act; however, its practical implementation has given rise to substantial opera - tional deficiencies and administrative complications. Due to the failure of the original Builder’s Portal, the state had to implement a transitional “bypass” regime that will remain in place until the end of 2029. At present, building authorities are effectively com - pelled to continue operating through their legacy IT systems, while designers and architects are already subject to a strict obligation to submit project docu - mentation exclusively in digital form. A newly devel - oped digital system, designated as “DSŘ 2.0”, is envisaged to be deployed after 2030, with the aim of completing the systemic transition. For foreign investors and their legal advisers, this hybrid operational posture necessitates extremely robust internal document governance. It is vital to maintain traceability and avoid misalignment between digital and legacy communication channels during this transitional period, as lost documents can still cause significant delays in the permitting timeline. The Substantial Amendment While the market is still adapting to the single joint proceeding, a more substantial structural recalibra - tion is currently being proposed, aiming to enshrine the principle of “one authority, one proceeding, one stamp”. The government has indicated its intention to advance this so-called “major amendment” through a fast-track legislative procedure. A key institutional change will be the creation of a Unified State Building Administration, replacing the current system where building offices operate at the municipal level. Historically, building offices were part of the local municipalities. This raised concerns about potential systemic bias and local political pressure
blocking development. The amendment addresses this by completely separating building offices from municipalities and creating a new three-tier adminis - trative hierarchy. This new hierarchy will consist of: • the Office of Territorial Development, as the central authority for spatial planning, building code and expropriation; • 14 regional Offices of Territorial Development; and • 205 territorial branches located in municipalities with extended powers. This reform foresees the integration of relevant secto - ral authorities and their technical staff directly under the new offices to consolidate expertise and decision- making. Stakeholders must plan for the potential redistribution of files and responsibilities during this complex consolidation phase. Mass Housing and Build To Rent (BTR) One crucial element of the amendment under con - sideration is directly tied to commercial trends in the market: institutional residential housing. To address severe housing shortages, the amendment introduces a completely new sub-category within reserved struc - tures called “mass housing”. Under this new legal definition, residential complexes with a predominantly residential function and a total floor area of at least 10,000 square meters (which cor - responds to roughly 100 to 200 flats) will be given priority. These large-scale developments will be per - mitted centrally by a newly competent, specialised office, with the stated aim of accelerating delivery and unblocking the market. This legislative development corresponds to the evolv - ing investment structures observed in the market. Ten years ago, the business model of almost every residential developer was simple: build an apartment building and sell the individual units to retail buyers. Because of the high interest rates and the fact that the capital city is statistically one of the least affordable cities for housing in Europe, this model has become significantly less viable in the current market condi - tions. The logical market response is the boom of the
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