Acquiring of real estates in Poland

Existing transition periods

An acquisition permit is generally not required when it involves acquiring a real property or a condominium by a foreign natural person or a foreign legal person, domiciled in one of the Member States of the European Union.

As an exception, even foreigners domiciled in the Member States of the European Union (both natural and legal persons) need an acquisition permit if they intend to purchase real estate used for agricultural or forestry proposes within a period of 12 years after Poland’s accession to the EU.

Acquiring ownership of a real estate

The separation principle applied in German civil law distinguishes between the causal business (the executory purchase contract) and material transactions (transfer of property rights), although it is usually a single process.

The Polish Civil Code contains, however, the consensus principle, which assumes that the obliging contract has basically two legal effects: a contractually binding obligation and the transfer of property rights. This means that contrary to the German civil law, an ineffective contractual obligation nullifies also the transfer of property rights. The registration in the land register is not necessary for the transfer of ownership of a property to be effective.

Purchase contract form

The agreement stating the obligation to transfer the ownership of a real estate or a residential real estate requires notarization.

This formality does not cover the conclusion of a preliminary agreement. The preliminary agreement contains no obligation to transfer the ownership of a real estate, but only the obligation to conclude the main contract, which then in turn implies either contractual binding obligations only or simultaneously the transfer of property rights as legal effects.

If the preliminary agreement was, however, notarized, it affects claims that can be asserted by one business party to the counterparty, which refuses the conclusion of the main contract. The entitled party may demand the immediate conclusion of the main contract while keeping the form applicable to the main contract.

If the preliminary agreement does not comply however with the formal regulations applicable to the main contract, the entitled party may only claim compensation for the damage, which has been incurred due to the fact that the party concerned relayed on conclusion of the main contract.

Significance of the land register in real estate transactions

The land register represent an officially held public register of real estates, disclosing the ownership structures, as well as rights and obligations associated with the given land property, which is held in written or electronic form.

It is assumed that the rights resulting from the land register entry correspond to the actual legal situation. The public faith of the land register refers among other things to the fact that the buyer acquires the property from a non-entitled party registered in the land register, if it is in good faith. Who is positively aware that the content of the land register is incorrect or the one who could have found out this mistake with ease is acting mala fide.

Appointment of perpetual usufruct

For certain real estates owned by the State Treasury or the territorial self-government units, usufructuary rights may be appointed in favour of a natural or legal person. Usually, the usufructuary rights are appointed for a period of 99 years, only in exceptional cases for a period of 40 years. The beneficiaries of usufructuary rights must pay an annual fee.

Contrary to the acquisition of ownership of real estates, the appointment of usufructuary rights takes effect not until the registration in the land register is made, having thus a constitutive effect.