The procesdure of buying a property in Poland is a serious investment that requires adequate preparation. For those people who do not have daily contact with sales or purchases of real estate, the whole procedure may seem quite complicated. It is worth making sure that the process of buying real estate is carried out with the support of people who have appropriate qualifications. The help of a lawyer in such a situation is invaluable. What form should a property sale contract take? Can commercial companies acquire properties? Answers to these questions can be found below.
Table of Contents
- Buying a property in Poland – the form of the contract
- Costs related to paperwork required to buy a property in Poland
- Buying a property in Poland by Polish partnerships
- Buying a property in Poland by Polish limited companies
- Summary
Buying a property in Poland – the form of the contract
The concept of a sale contract is in the Art. 535 of the Civil Code. By a sale contract, the seller commits to transfer to the buyer the ownership of a thing and to hand over the thing. The buyer commits to collect the thing and pay the specified price to the seller. The sales contract is one of the most frequent legal transactions in practice.
Buying a property in Poland – form of the agreement
In a situation when real estate is the subject of the sales contract, it is necessary to prepare it in the form of a notarial deed (Art. 158 of the Civil Code). In the notarial deed of sale, the subject of the contract is specified – the document includes a detailed description of the real estate, together with its factual and legal status.
The legal status of the real estate results mainly from the land and mortgage register. It also results from the documents submitted to the notary public. The notary public is responsible for establishing the legal status. As well as for securing the interests of the parties to the contract.
Price and method of payment when buying a property in Poland
The sales contract also includes provisions concerning the price and the method of payment. It also specifies the date on which the property in Poland will be released into the possession of the purchasing party. The contract may include a number of other provisions, depending on the situation and needs of the parties.
The parties of the contract have to present all the required documents and submit relevant declarations. The set of documents required to finalize a particular contract varies. It depends on the actual and legal situation as well as the state resulting from the land and mortgage register.
Costs related to paperwork required to buy a property in Poland
The purchase of a property in Poland is inseparably connected with notarial costs. They include a notarial fee as well as the cost of extracts from the notarial deed. The amount of the notarial costs varies. It depends on the scope of the performed actions and on the value of the subject of the contract itself. The Notary Public Act does not regulate which party of the agreement pays the notarial costs. Consequently, depending on the settlements, it may be either the seller or the buyer of the property.
Taxes related to buying a property in Poland
Nevertheless, notarial costs are not the only costs of the purchase of a property in Poland. If you buy a real estate on the secondary market, it is necessary to pay the tax on civil law transactions. Its rate amounts to 2% of the real estate price. The notary collects the fee and then pays it to the tax office.
Formalities after buying a real estate in Poland
A conclusion of the sales contract results in obligation to make entries into the land and mortgage register. Court costs depend on the provisions of the contract. Their amount is specified in the act on Court Costs in Civil Cases.
In the case of purchasing real estate with the funds from the mortgage loan, there are additional costs which you have to carry. These consist of the tax on civil law transactions. It results from the establishment of the mortgage. As well as of the court fee for entering the mortgage into the land and mortgage register.
Buying a property in Poland by Polish partnerships
Polish partnerships do not have legal personality. However, they can still be efficient. According to Art. 8 of the Code of Commercial Companies, a partnership may acquire rights, incur liabilities, sue and be sued on its own behalf. A partnership may not only purchase real estate in Poland but also acquire other property rights. It has its own assets. In the case of purchasing real estate, it is the partnership that will own the property, not the partners themselves (as in the case of a civil company).
Who represents Polish partnership?
The rules of representation of partnerships are defined in the provisions of the Code of Commercial Companies. By signing or changing the articles of association, the partners have an impact on determining the rules of its representation. By setting the rules of the company’s operations and establishing its representation. Partners can influence the speed of the decision-making process as well as the system for controlling them. They do it by setting the rules of the company’s operations and establishing its representation. Rules of representation differ, depending on the type of company or partnership.
In the process of buying real estate in Poland, partners acting individually or jointly or by general partners represent the partnerships. Moreover, in the case of a limited liability partnership, the real estate purchase contract may also be concluded by the management board, if it was appointed. A proxy may also sign the contract on the transfer of the ownership of the property.
Buying a property in Poland by Polish limited companies
Limited companies (limited liability companies, joint-stock companies and simple joint-stock companies) may acquire and sell real estate. These actions, however, have restrictions resulting from the provisions of the Commercial Companies Code, articles of association or the statute.
The management board members have authority to purchase and sell real estate on behalf of the company. In the case of a management board consisting of many people, the manner of representation should be specified in the articles of association or in the statute. Making declarations on behalf of the company requires the cooperation of two members of the management board or one member of the management board together with a commercial proxy. However, the articles of association or the statute can contain other regulations on this matter.
Who represents the Polish limited liability companies?
Managing the affairs and representing the company is within the competence of the management board. Nevertheless, activities that are crucial for the company, such as purchasing a property in Poland, require the approval of the meeting of shareholders or of the general meeting of shareholders. This corresponds to every type of property. It does not matter whether the company uses the real estate for conducting business activities or whether it constitutes only a part of company’s fixed assets. The abovementioned requirement applies regardless of the value or the size of a given property. The purpose of this solution is to secure the company’s interests as well as the interests of its partners or shareholders while making significant and usually costly transactions for the company.
Approval of shareholders of a Polish company
The requirement to obtain the approval of the partners or shareholders may be cancelled in the articles of association or in the company’s statute. It is also possible to regulate differently the general rules of conduct concerning the disposal of fixed assets or the acquisition and sale of real estate.
The resolution on the purchase of real estate in Poland should include the necessary data identifying the real estate and specify the size of the purchased share in this real estate. There is neither a statutory obligation nor a custom to determine in resolutions the conditions of activities expressing consent to the sale of real estate. However, in order for the consent to apply to a specific legal action, there can be no doubt that the shareholders’ meeting or the general meeting adopting the resolution is aware of the conditions of which action they consent to.
Summary
Buying a property in Poland may be stressful for both the seller and the buyer. It is worth ensuring that the content of the contract fully reflects the will of the parties and secures the interests of each of them as much as possible.
If you need help in analysing the content of the real estate sales contract, want to verify whether it sufficiently secures your interests or need some support to understand the provisions of the agreement, we encourage you to contact us.
If this article was interesting for you and you want to know more on the topic it concerned we encourage you to contact us. Specialists from our law firm in Poland, Warsaw, will be happy to help. If you are interested in company registration in Poland visit our dedicated landing page.
