Last week, several very interesting proposals for legislative changes were published, including changes to the Development Act and spatial planning and development laws. In today's article in the series "Tuesday Mornings for the Construction Industry," we want to explore the proposed changes, which are important for developers' sales of residential units.
I. Change in contributions to the DFG
On February 20, 2025, a new text of the draft act amending the Act on Social Forms of Housing Development and certain other acts, i.e. the version dated February 7, 2025 (hereinafter referred to as the " Draft "), was published on the Government Legislation Center website. Article 12 was added, which amends the Act of May 20, 2022, on the protection of the rights of purchasers of residential premises or single-family houses and on the Developer Guarantee Fund (hereinafter referred to Developer Act "). According to the Draft, an obligation to pay a contribution will be introduced for developers who commenced a project (or investment task) before July 1, 2022.
The drafters propose that the amount of the contribution to the Developer Guarantee Fund (hereinafter referred to as the " DFG ") for development projects in which sales commenced before the entry into force of the Development Act and at least one development agreement was concluded before that date, under which the developer concludes development agreements, the amount of the contribution to the DFG should be calculated according to the percentage rate applicable on the date of entry into force of the Development Act .
Pursuant to the regulation of the Minister of Development and Technology of June 21, 2022, on the percentage rates according to which the amount of the contribution to the Developer Guarantee Fund is calculated (which entered into force on July 1, 2022), the percentage rate of the contribution to the DFG in the case of an open housing escrow account is 0.45% and in the case of a closed housing escrow account is 0.1%.
We draw your attention to the transitional provision – Article 27 of the Draft – which stipulates that the provisions of the Developers Act in their current wording will apply to agreements concluded before the effective date of the amending Act. This means that the obligation to pay contributions will not apply to existing developer or commitment agreements, but only to those concluded after the effective date of the act adopting the Draft .
We would also like to remind you that currently, in the case of development agreements concluded as part of development projects in which sales started before 1 July 2022, "the amount of the contribution for these investments is currently zero", which was explicitly indicated in the justification of the Project.
Detailed content of the project is available on the RCL website: https://legislacja.gov.pl/projekt/12383852/katalog/13050740#13050740
II. Mandatory publication of apartment prices
On January 20, 2025, another draft amendment to the Development Act was submitted to the Sejm – this time, the changes are proposed by the Polska 2050-Third Road Parliamentary Club (hereinafter "Draft 2"). Draft 2 imposes additional obligations on developers implementing development projects.
The first obligation is maintaining your own website. While this is already standard practice for most entrepreneurs, many small developers pursuing small projects don't maintain their own websites, so this will be an additional expense.
Second, on such a website, from the date of commencement of sales until the date of sale of the last property or part thereof covered by the development project or investment project, the seller will be required to provide information on : (i) the registered office address, (ii) contact information for the developer, (iii) the location of the development project or investment project, and (iv) the price per square meter of the offered apartments or single-family houses and the entire property or part thereof being sold, (v) the price of the appurtenant rooms or rights necessary to use the apartment or single-family house, if the price of these rooms or rights is not included in the price of the apartment or house, and (vi) other monetary considerations that the buyer is obligated to provide in performance of the sales agreement. Prices and fees are to be quoted inclusive of value added tax.
It's worth noting that the drafters incorrectly use the term "sales agreement" when referring to "cash considerations that the buyer is obligated to provide." The Development Act primarily regulates development agreements, in which the developer commits to constructing a building, establishing separate ownership of the premises, and transferring ownership, as well as binding agreements concluded after construction. Sales agreements are not the primary subject of the Act's regulations. As commentators on the Development Act point out, a development agreement and a sales agreement are two distinct types of agreements. In this regard, in our opinion, the definition of "other cash considerations" beyond those resulting from the price per square meter of the premises and associated rooms, including cash considerations, is too broad. For example, will this provision require developers to present prices, for example, for parking spaces, or perhaps also a price list for tenant changes? This certainly requires clarification.
The third obligation will involve price updates . In the event of a price change, the developer would be required to update the information on their website on the day of the change, specifying the date of the change and the rules for applying discounted prices , while maintaining this information from the start of sales. In our opinion, the proposed provision will cause significant problems with repeated price changes . We also do not understand why developers should have to justify their pricing policies – no other group of businesses has such an obligation. If developers were to be required to display previous prices, the drafters should align the proposal with existing obligations in the Polish legal system to report price changes, arising from, for example, the Omnibus Directive.
Fourthly, in advertisements, announcements and other forms of offering, the developer would be obliged to provide the address of the website where the above information will be displayed.
Violation of the above obligations would become one of the practices infringing the collective interests of consumers subject to control by the President of the Office of Competition and Consumer Protection.
This article is for informational purposes only and does not constitute legal advice.
Legal status as of February 25, 2025
author:
Be the first to receive our articles and legal alerts, straight to your inbox! Sign up for our newsletter by clicking the link or contact us at social@kglegal.pl to personalize your content.
