It's happened – last week, the Sejm adopted, with amendments, the Act of May 20, 2021, on the Protection of the Rights of Purchasers of Residential Units or Single-Family Homes and on the Developer Guarantee Fund ("New Developer Act") . The most significant change introduced following the Senate amendments is a reduction in the maximum amount of contributions to the Developer Guarantee Fund from 2% to 1% for open escrow accounts, and from 0.2% to 0.1% for closed escrow accounts. Now all that remains is for the President of the Republic of Poland to sign the Act and publish it.
Therefore, we are continuing our analysis of the New Developer Act for you. While it does specify a 12-month vacatio legis , counted from the date of its announcement, it is worth familiarizing yourself now with the changes that will inevitably come into force.
As we mentioned last week, in addition to development agreements, the New Developer Act will also apply to sales agreements concluded on so-called The primary market applies to agreements transferring ownership of residential premises or single-family houses (individually or with commercial premises) from a developer or other entrepreneur to buyers, if the subject of the agreement was created as a result of a development project or investment project, and the transfer of rights under these agreements to the buyer occurs for the first time. Therefore, this Act will apply to sales agreements referred to in Articles 3 and 4 of the New Development Act, regardless of whether development or preliminary agreements were previously concluded.
It is worth noting that a buyer, within the meaning of the Act, is a natural person who, for purposes not directly related to their business or professional activities, enters into agreements referred to in the New Development Act. Given this definition, draft agreements should include an additional declaration from the buyer confirming that they are purchasing the premises "for purposes not directly related to their business or professional activities," as otherwise the provisions of the New Development Act will not apply.
The seller, on the other hand, can be either a developer or another entrepreneur who is not a developer.
The developer, when signing a sales agreement which was not preceded by a development agreement or a preliminary agreement under a development agreement (which we wrote about in #51 ), will be obliged to apply the following provisions of the New Development Act:
1. enabling the buyer to become familiar with the documents referred to in art. 26 sec. 1 points 1-8 (land and mortgage register status, CEIDG/KRS, building permit, financial report, construction design, occupancy permits, certificate of independence of the premises and deed of establishing separate ownership of the premises);
2. information obligations and provision of information on a durable medium in accordance with art. 27 sec. 1 (information regarding the real estate and investment, the financing party's consent to the unencumbered sale, the opportunity to review the documents from point 1 above),
3. reservation agreements, including those related to the refund of the reservation fee (art. 29-32 and art. 34 sec. 1 points 1 and 2) and
4. issues related to the acceptance of the premises/single-family house (art. 41 sec. 1-3).
In turn, in the case of entrepreneurs who are not developers, the New Development Act requires the application of the provisions concerning not only points 3 and 4, i.e. reservation agreements and those related to the acceptance of the premises/single-family house, but they will also be obliged to enable the buyer to review the documents on the company's premises in accordance with art. 26 sec. 3 and to provide information on a durable medium in accordance with art. 27 sec. 2. In practice, the obligations of developers and other entrepreneurs will be similar.
Importantly, in accordance with art. Pursuant to Article 36 of the New Development Act, the subject of sales agreements may only be real estate or a fraction of real estate free from encumbrances, third-party rights, and claims disclosed in the land and mortgage register maintained for that property, with the exception of encumbrances to which the buyer has consented. Appropriate declarations will have to be included in the text of these agreements. Given the wording of the provision, which does not allow for the existence of rights and encumbrances existing before the date of signing the agreement or arising from other acts (e.g., the transformation fee), sales agreements should include the buyer's express consent to such pre-existing encumbrances.
To mark the first year of the "Tuesday Mornings for Construction" series, next week we will prepare a summary of the topics covered in our previous alerts. In two weeks, we will return to the New Development Act and discuss issues related to the acceptance of premises under the new regulations.
It's also time to thank those who have been contributing to our series for the past year. This time, we thank R.P. Aleksandra Jastrzębska, author of articles on the "Premises for Land" Act, and attorney-at-law Patryk Grochowski, editor of the first series of alerts on the amendment to the Construction Law. We also remind you that all previous "Mornings" can be found at www.porankidlabudowlanki.pl
This alert is for informational purposes only and does not constitute legal advice.
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