In the last three articles in the series entitled "Tuesday Mornings for the Construction Industry," we discussed the proposed changes to the draft amendment to the Act on the Protection of the Rights of Purchasers of Residential Units or Single-Family Homes and to the Developer Guarantee Fund, dated July 29, 2026 (the "Draft"), concerning, among other things, handovers, the liquidation of development companies, the liability of partners, and the prohibition on price increases. In the final article on this amendment, we will examine changes to the review conducted by banks before disbursing funds from housing escrow accounts.
The current version of the Draft divides the audit, or rather control procedures, into: (i) developer audits and (ii) audits of the completion of a specific stage of a development project or investment task. In the case of the former, the developer's own audit is to be conducted before each disbursement of funds.
According to the Project:
a) if the payment is made in connection with the completion of a stage of a development project or an investment task – the bank will carry out both an inspection of the developer and an inspection of the completion of a given stage;
b) if the payment is not related to the completion of a stage – the bank will carry out an inspection of the developer.
What will the bank check before each withdrawal?
The developer's inspection should include checking each timewhether:
a) the planned purpose of the funds paid out and the method of spending funds already paid out are in accordance with the Act;
b) the developer is not in arrears with taxes or social security and health insurance contributions;
c) the developer has correctly paid the contribution to the Developer Guarantee Fund;
d) the developer is not in arrears with obligations towards buyers who have withdrawn from the contracts;
e) the developer has no arrears towards DFG as defined in the Act;
f) the collected reservation fee has been transferred to the residential escrow account;
g) no restructuring or bankruptcy proceedings have been initiated against the developer.
Only upon payment related to the completion of a stage will the bank conduct an additional inspection of this stage, including verification of the legal title to the property, building permits, settlements with contractors and subcontractors, and the actual progress of the works.
Is an inspection necessary before each payment?
The proposed solution could lead to a significant increase in the number of inspections. If multiple withdrawals are made from the same residential escrow account within a short period, the bank will be required to re-verify the same circumstances each time – even if the previous inspection took place just a few days earlier.
In practice, this may mean additional documentation obligations for developers, longer payment processes and increased costs of maintaining residential escrow accounts.
In our opinion, it would be reasonable to introduce a solution whereby developer inspections would not need to be conducted more frequently than once every 30 days. If the bank has already conducted an inspection within 30 days preceding the next disbursement, its results should remain current unless the bank receives information about a change in the circumstances subject to verification.
Such a solution would allow the protective function of the control to be maintained and at the same time would limit the repetition of the same actions in very short intervals.
PLANNING ALERT – LAST DAYS OF THE STUDY
Finally, regardless of changes to the Development Act, we would like to draw your attention to an important deadline for all investors. The current municipal spatial development studies expire on August 31, 2026. This deadline was ultimately extended by the Act of April 30, 2026, until the end of August.
In a municipality where a general plan does not enter into force by September 1, 2026, new development decisions will generally not be issued after that date, with the exception of proceedings conducted based on applications submitted to the authority before the study expired. Please note that applications for development decisions can also be submitted electronically.
These are the final days to successfully submit an application for a development decision. Investors with properties without a local plan, particularly in municipalities that have not yet adopted a general plan, should review their investment plans as soon as possible.
SUMMARY
The proposed amendment to the Developer Act is intended to increase the scope of banks' ongoing oversight of developers, requiring this oversight to be conducted before each disbursement of funds from an escrow account. The draft Developer Act is still in the legislative process and may be subject to further changes.
At the same time, the coming days are particularly important for investors planning projects in areas not covered by a local plan. On August 31, 2026, studies expire, and from September 1, in municipalities without a general plan, the situation regarding obtaining new development decisions will change significantly.
This article is for informational purposes only and does not constitute legal advice.
Status of legislative work as of August 17, 2026.
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