Seen as useful primarily for land managers in urban and other built-up areas, Lithuanian territorial planning reform should bring more activity to the market this year in the building land sector. Land managers will benefit from a significantly shorter process from developing an idea to translating it into reality, but the situation in other market segments remains unchanged, with some of them facing even tighter requirements, says attorney-at-law Aušra Mudėnaitė, a partner with law firm SORAINEN.

Territorial planning will provide the biggest advantage to developers reconstructing existing buildings or planning construction of medium-sized facilities in areas of Lithuanian cities and towns that have not undergone detailed planning, while developers of non-urbanised suburbs will find the reform to be disadvantageous. A SORAINEN lawyer spoke to real estate developers and designers about the new Law on Territorial Planning that came into force on 1 January at a Lithuanian real estate development conference entitled “Real Estate Market 2014: New Opportunities”.

“Land managers in urban and other built-up areas will definitely benefit from the reform. Since a detailed planning process will no longer be needed in most cases, the length of time from a development idea to a construction permit and the resulting administrative burden will be significantly reduced. This reform will not bring any positive changes to developers in the suburbs that are not planned to be urbanised – they will still enjoy only the scarce exemptions applicable to farms,” commentsMs Mudėnaitė.

Admittedly, the possibility for neighbours and public interest advocates to challenge plans has been considerably reduced, but the effectiveness of the new procedure has not yet been tested in the courts. The reform has already created a number of curious situations, but these are likely to be resolved in the long run by improving legislation and developing administrative practice.

Development of larger industrial facilities will still depend on the outcome of environmental impact or public health impact assessment procedures and tightening the rules for establishing protection zones on another person’s land, so developers of these facilities will not feel any significant effect of the reform. “From now on, it will only be possible to develop renewable energy facilities (except for very small ones) in areas included in general or special plans, so at this point the reform will definitely not alleviate the planning burden,” the SORAINEN representative observes.

This year, the Lithuanian farming land market will be affected by legislative changes on reduction of the maximum area of agricultural land that can be purchased. A person or associated persons (with a very broad definition) will now be able to acquire and own a total of up to 500 ha of agricultural land. “The laws do not directly prohibit transactions for the sale of shares or stocks resulting in acquiring control of a larger area of land through associated persons, but the majority of market participants will apparently wait for case law to develop on the feasibility of such transactions,” notes the attorney-at-law.