In today's alert, we will once again address the proposed changes to the information prospectus, which is to be regulated by the Act on the Protection of the Rights of Purchasers of Residential Premises or Single-Family Homes and on the Developer Guarantee Fund, hereinafter referred to as the "New Developer Act." This time, we will explain why this document is so important and what consequences developers will face if the prospectus is not delivered, contains incorrect information, or fails to update the data contained therein.
First of all, let us remind you that in accordance with the New Development Act, the provisions of this Act will apply not only to the development agreement, as before, but also to a number of other agreements listed therein , as we have already written about in alert #40 .
Therefore, in accordance with the New Development Act, due to irregularities regarding the information prospectus, the buyer will have the right to withdraw from the development agreement, but also from the agreement (i) establishing separate ownership of a residential premises and transferring ownership of this premises and the rights necessary to use this premises to the buyer, (ii) transferring ownership of a residential premises and the rights necessary to use this premises to the buyer, (iii) transferring ownership of a real estate developed with a single-family house or perpetual usufruct of a land property and ownership of a single-family house situated on it, constituting a separate real estate, or transferring a fractional part of ownership of this real estate together with the right to exclusive use of a part of the real estate used to meet housing needs.
Irregularities relating to the information prospectus that will entitle the buyer to withdraw from the contract are as follows:
- if the developer fails to provide the client with an information prospectus and attachments before concluding a reservation agreement, a development agreement or one of the agreements listed in points i-iii above,
- when the developer fails to provide the client with information about changes to the data or information contained in the information prospectus or its annexes,
- if the data or information contained in the information prospectus or its annexes, on the basis of which the development agreement or the agreement referred to in points i-iii above was concluded, is inconsistent with the factual or legal status on the date of conclusion of the agreement,
- when the information prospectus on the basis of which the development agreement or the agreement referred to in points i-iii above was concluded did not contain the data or information specified in the information prospectus template,
- if the information contained in the development agreement or the agreement referred to in points i-iii above is not consistent with the information contained in the information prospectus or its annexes (with certain exceptions).
In the above cases, the buyer will have the right to withdraw from the development agreement or the agreement mentioned in points i-iii above, within 30 days from the date of its conclusion.
Additionally, the developer is obligated to inform the reserving party of any changes made to the information prospectus throughout the duration of the reservation agreement. Therefore, the developer will be obligated to immediately refund the reservation fee to the reserving party if they make any changes to the information prospectus or its annexes and fail to inform the reserving party.
For failing to comply with the obligations related to the information prospectus, the developer will also be subject to criminal liability . Failure to prepare an information prospectus despite the commencement of sales may result in a fine imposed under the provisions of the Act of August 24, 2001 – the Code of Petty Offenses Procedure (Journal of Laws of 2021, item 457). Furthermore, if the developer provides false information or data in this document or conceals true information, they may be subject to a fine, restriction of liberty, or imprisonment for up to 2 years.
In summary, preparing and updating the prospectus will be an even more responsible task for the developer . Failure to comply with the obligations related to this document will result in the client being able to withdraw from the contract, being required to refund the reservation fee, and the developer being subject to criminal liability.
Due to the even greater complexity of information and data, as well as the degree of formalization of obligations related to the information prospectus in the New Development Act, we recommend that you exercise even greater diligence and caution, and in case of any doubts, contact entities providing professional advisory services in this area.
We cordially invite you to continue following our articles – in a week we will analyze for you the changes to the New Development Act regarding the essential elements of a development agreement.
This alert is for informational purposes only and does not constitute legal advice.
If you are not yet on our mailing list, please send an email to social@kglegal.pl stating that you would like to receive "Tuesday Mornings for Construction".
author:
