On 8 June President Andrzej Duda signed into law the so-called New Developer
Act, whose official name is the Act of 20 May 2021 on the protection of the
rights of buyers of apartments and single-family houses and on the Developer
Guarantee Fund.
One of its key provisions is to establish a fund called the Developer Guarantee Fund
(henceforth “the Fund”), with the aim of increasing protection for homebuyers in the
event that the developer declares bankruptcy.
The Fund will consist of money from the following sources:
- contributions payable by developers;
- interest earned on its bank account, which will be a dedicated sub-account of the
Insurance Guarantee Fund (UFG), and on time-deposits of its money; - claims against developers or banks, transferred from buyers to UFG (buyers’ claims
will transfer to UFG automatically when the Fund refunds their escrow); - money recovered from bankrupt developers’ estates;
- loans obtained by UFG for the benefit of the Fund;
- other proceeds.
Developers will pay contributions to the Fund expressed as a percentage rate of payments
made by buyers into escrow as part of the execution of the developer agreement. The
Act lays down their maximum levels. In its draft text, they were set at 2% for open-ended
escrow accounts and 0.2% for closed escrow accounts. But during its processing in the
Senate, they were halved to 1% and 0.1%, respectively.
Actual rates will be determined by the competent minister in charge of construction,
housing, and urban planning and development, in consultation with the minister in
charge of financial institutions, after obtaining an opinion from UFG and from the Office of
Competition and Consumer Protection (UOKiK)’s chief.
Significantly, under Article 41 of the New Developer Act, the buyer is entitled to refuse to
take over ownership of the property from the developer in case a major defect is found.
In that case, the developer has 14 days to either acknowledge the defect or to refuse to
acknowledge it, giving reasons for the refusal. Failure to do either within this period is
treated as acknowledgement of the defect.
In principle, an acknowledged defect has to be removed by the developer within
30 days of the signing of the acceptance protocol in which the defect was reported.
(There is also the option of the buyer removing it at the developer’s expense.) The
buyer is entitled to withdraw from the agreement if an acknowledged major defect is
not removed within this period.
Most of the provisions of the New Developer Act will only come into force 12 months
after its publication in the Journal of Laws. But some parts, mainly those pertaining to the
Developer Guarantee Fund, will take effect already 30 days after publication.
The New Developer Act will supersede the Act of 16 September 2011 on the protection of
the rights of buyers of apartments and single-family houses.
Katarzyna Babicka, Lawyer
Miller, Canfield, W. Babicki, A. Chełchowski i Wspólnicy Sp.k.