Legal basis – the Polish Act on Sobriety Education and Counteracting Alcoholism
The requirement to obtain a resolution from the homeowners’ association for the sale of alcohol appears to be an excessive interference in the conduct of business. The legislature justifies this, however, by arguing that where the majority of premises on a property are residential, the sale of alcohol may lead to disturbances of the peace, alcohol consumption in the immediate vicinity of the point of sale, or littering of the area surrounding the building where the sale takes place.
Pursuant to Article 18(1) of the Polish Act on Sobriety Education and Counteracting Alcoholism, the sale of alcoholic beverages intended for consumption on or off the premises may be conducted only on the basis of a permit issued by the city council head (mayor, city president), having jurisdiction over the location of the point of sale, hereinafter referred to as the “licensing authority.”
A license to sell alcoholic beverages is issued based on an application submitted by the business owner, and pursuant to Article 18(6)(3) of the aforementioned Act, an application for a license to sell alcohol must be accompanied by the consent of the owner, user, manager, or administrator of the building if the point of sale is located in a multi-family residential building.
The housing community’s consent to the sale of alcohol is expressed in the form of a resolution by the unit owners, which is adopted by a simple majority vote, and a corresponding statement by the board. In practice, the board of the housing community drafts the relevant resolution, presents it to the unit owners at a community meeting, a specially convened meeting, or collects votes through an individual ballot.
What should a housing community resolution granting consent for the sale of alcohol include?
A properly drafted housing community resolution should contain the following elements:
- a statement that the community grants consent, within the meaning of Article 18(6)(3) of the Act of October 26, 1982, on Sobriety Education and Counteracting Alcoholism, for the establishment of an alcohol sales outlet,
- specification of the type of alcohol to be sold (up to 4.5% alcohol and beer, 4.5%–18% alcohol (excluding beer), over 18% alcohol),
- indication that sales may take place without time restrictions or indication of any time restrictions on sales,
- a precise description of the premises where alcohol is to be sold (e.g., “premises no. U21 located on the ground floor of a multi-family building situated in Warsaw at 10 Piękna Street”).
The resolution may also include granting power of attorney to all members of the community’s board to perform any actions necessary to grant consent for the sale of alcohol.
Lack of consent from the housing community for the sale of alcohol
Sometimes, however, the housing community refuses to grant consent for the sale of alcoholic beverages.
The general rule is that any restriction on the rights of the owner or tenant of a commercial premises must be based on reasonable grounds and justified by specific factual circumstances. The housing community should therefore have concrete and genuine reasons justifying its refusal to grant consent for the sale of alcoholic beverages.
It is therefore not sufficient (as often happens in practice) for the refusal to grant consent to be justified solely by the fact that the majority of the housing community’s members do not agree with the nature of the owner’s or tenant’s business plan.
A practical example from Polish case law:
This view is confirmed, for example, by the judgment of the Polish Regional Court in Wrocław dated December 10, 2015 (Case No. I C 1435/15), in which the court held that a homeowners’ association may not arbitrarily restrict the use of commercial premises or interfere with the owner’s rights. According to the court, the mere expression by members of the housing community of concern regarding the presence of people consuming alcohol in the vicinity of the store does not constitute sufficient grounds to refuse consent to the sale of alcohol. These circumstances are not proportionate to imposing a ban on conducting business activities.
The court also emphasized that property owners are not authorized to adopt resolutions that interfere with the separate property rights of other owners, and restrictions on the use of the premises must be based on specific and actual factual circumstances.
As a side note to the above ruling, it is also worth adding that owners of commercial premises within a housing community are protected against unjustified interference by the community regarding how the premises are used. This applies not only to the issue of selling alcohol but also to increases in service charges of commercial premises within the housing community.
If a homeowners’ association passes a resolution prohibiting the sale of alcohol on the premises, the person holding legal title to the premises (owner or tenant) may file a lawsuit challenging the resolution and seeking to have it declared null and void. In such a situation, the lawsuit must be filed against the housing community within 6 weeks from the date of:
- the adoption of the resolution at a general meeting of owners,
- notification of the content of the resolution adopted through individual voting.
In the event of a dispute, adhering to the deadline indicated above is extremely important, because once it expires, the owner/tenant of the premises loses the right to defend their interests in court.
Withdrawal of consent to the sale of alcohol by the housing community
Our experience shows that the most common scenario, however, is when a housing community grants consent for the sale of alcohol in a commercial space located within the community and then “withdraws consent” for the sale of alcohol by adopting a new resolution that repeals the previous one, i.e., the one granting consent.
However, as evidenced by the case law of the common courts, as a general rule, a housing community cannot arbitrarily revoke consent to the sale of alcohol (for example, the judgment of the Polish Regional Court in Zielona Góra dated July 29, 2014, case no. I C 92/14). Why is this the case?
A resolution by a homeowners’ association approving the sale of alcohol constitutes a declaration of intent by the association, which is made, among others, to the person intending to sell alcohol on the premises (who, incidentally, may be a member of the homeowners’ association). Declarations of intent cannot be made in a perfunctory manner, arbitrarily revoked, or used to evade the consequences of such declarations in a situation where the association has simply “changed its mind” regarding the possibility of selling alcohol at the stage of a second resolution, i.e., a resolution revoking the previously granted consent.
The courts have indicated that in such a situation, the housing community’s arguments, regarding, for example, the fact that the sale of alcohol causes a decrease in the value of the premises, reduces the comfort of living and working, or compromises the safety of using the premises, are irrelevant.
Any revocation of consent may occur only in exceptional situations provided for by the Polish civil law, e.g., in the case of a valid avoidance of the effects of a declaration made under the influence of error. However, a mere re-examination of the situation and a different assessment of the effects of alcohol sales do not constitute grounds for revoking a previously made declaration of intent.
Therefore, if a homeowners’ association grants permission to sell alcohol in a commercial space located within the association and subsequently passes another resolution that “revokes” the permission granted to the owner or tenant of the premises where alcohol is sold, the business owner may challenge the resolution in court within six weeks. In such a situation, the court should overturn the defective resolution as unlawful.
A practical example from Polish case law:
“(…) the adopted resolution infringes upon the plaintiffs’ interests because it leads to a change in the conditions under which the plaintiffs have previously used the premises. In the Court’s opinion, there is no doubt that as a result of the adoption of the resolution challenged in the complaint, No. (…), the plaintiffs’ use of the commercial premises they own in accordance with their intended purpose has been significantly restricted (…) For by this resolution, the defendant Housing Community effectively revoked its consent to the sale of alcoholic beverages (…) The revocation of consent to the sale of alcohol prevents the continuation of business operations and may result in the plaintiffs’ inability to fulfill the lease agreement they entered into, and consequently in the termination of the agreement by the tenant, in accordance with the provisions of the agreement. Therefore, there can be no doubt that this resolution infringes upon the plaintiffs’ interests as owners of the premises, abuses the authority to protect the interests of its members by unduly interfering with the manner of using the premises” (judgment of the Polish Regional Court in Wrocław, 1st Civil Division, dated December 10, 2015, Case No. I C 1435/15).
Summary
An entrepreneur planning to sell alcohol in a grocery store, café, restaurant, or bar located in a building where a homeowners’ association operates should be aware that it is necessary to first obtain a license to sell alcohol, which requires the consent of the homeowners’ association.
Although our experience shows that consents are usually granted by housing communities, even in this situation it is extremely important that the resolution be properly drafted so that it cannot be challenged as defective. However, if the housing community objects to the sale of alcohol or “withdraws” its consent to the sale, the owner/tenant of the premises may consult a housing community lawyer to file a lawsuit challenging the resolution and seeking to have it removed from legal circulation.
First and foremost, determine the date the resolution was adopted and analyze its content. It is advisable to gather documents related to the case as soon as possible and consider filing a lawsuit.
In addition to filing a lawsuit to overturn the resolution, it is also possible to file a motion to secure the claim. This allows the court to issue a preliminary ruling suspending the enforceability of the resolution even before the legal dispute is resolved. This is particularly important for business owners running stores, restaurants, or bars, for whom a refusal to allow alcohol sales could mean a loss of revenue starting from the very first days the resolution takes effect. However, obtaining such a stay is not automatic, and each case requires an individual assessment.
Court proceedings to overturn a housing community resolution typically last between approximately 1.5 and 2 years, depending on the court’s caseload and the complexity of the case. It should be emphasized, however, that in many cases, not only the final judgment but also the ability to obtain provisional relief early in the proceedings can be of critical importance. In practice, this means that the court may temporarily resolve the parties’ situation even before the trial concludes, allowing the business owner to continue operations or retain the possibility of obtaining a liquor license without having to wait for a final judgment.
As a result, even though the trial itself may last several months, effective protection of a party’s interests often occurs much earlier, as early as the stage of reviewing the motion for interim relief.
