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PROPERTY LAW
Ownership (Freehold)
Ownership
• The Civil Code of 23 April 1964 defines ownership as an
exclusive right to use a thing in accordance with its social and
economic purpose (in particular to collect profits and other
revenues) and to dispose of the thing.
• In principle, the ownership of real estate covers the land and
the buildings located on it. In some cases, however, buildings
may be subject to separate ownership, and it is also possible
to create separate ownership for residential or commercial
premises.
• The title to real estate is usually disclosed in land and
mortgage registers (ksiegi wieczyste) kept by land and
mortgage register departments in district courts. The
registers also contain some other information about real
estate, including easements, mortgages and certain claims or
restrictions.
Co-ownership
• Co-ownership is defined by the Civil Code as a situation
where two or more persons are entitled indivisibly to the
ownership of the same thing (property).
• Co-ownership can be a joint one – based on specific legal
relationships e.g. marriage, civil law partnership – or involving
fractional parts. The former is closely connected with the
underlying relationship and cannot be cancelled over duration
of such relationship. Co-ownership in fractional parts can
be cancelled at any time (with some minor exceptions) and
before this, each co-owner can freely dispose of his right
(fraction).
• In the case of the ownership of separate premises, the owner
has at the same time a share in the common areas. Each
co-owner has a right to use the common areas and shares the
related service charges.
Rights affecting ownership
Perpetual usufruct
• Perpetual usufruct is a right to real property, where perpetual
usufructuary holds the land owned by the State Treasury or
local authorities for a certain period (maximum 99 years)
against an annual fee. Buildings and other installations
constructed on the land are owned by the perpetual
usufructuary.
Usufruct
• It is a limited right to property enabling the holder to use and
collect benefits from the real estate.
• Usufruct is non-transferable.
• Usufruct should be established by notarial deed.
Easement
• It is a limited right to property enabling the holder to use
encumbered real estate (e.g. with a right of way).
• Easements, as attributes of the ownership right, are
transferred by law together with the real estate.
• An easement should be established by notarial deed.
Easements can also be acquired through adverse possession
(acquisitive prescription), after the thing has been possessed
for a specific period (20 years in good faith and 30 years in
bad faith).
Mortgage
• A mortgage is a security interest encumbering real estate,
which entitles the beneficiary to satisfy his claim with a
preference to other creditors.
• In order to validly establish a mortgage, the real property
owner/perpetual usufructuary should make an appropriate
statement (in most cases in the form of a notarial deed) and
the mortgage should then be registered in the appropriate
land and mortgage register.
Right of first refusal
• It is a statutory option held by certain public authorities
or private persons to replace the acquirer in a real estate
transfer.
• The right of first refusal is provided for by law mainly to
certain public entities because of specific public interests. The
right of first refusal may also be established contractually.
• Usually the right of first refusal held by a public entity prevails
over the same rights that may be held by private persons.
ACQUISITION PROCESS:
KEY STAGES
Limitations for foreigners
• In some cases a permit has to be obtained from the Minister
of Internal Affairs before a foreigner can purchase real estate
or shares in a company that owns real estate. Foreigners from
the EEA countries (i.e. EU countries plus Norway, Iceland and
Liechtenstein) and Switzerland do not require a permit except
when acquiring agricultural or forest real estate (they may,
however, acquire shares in Polish companies having ownership
title to agricultural or forest real estate without a permit).
• There are no restrictions on foreigners occupying real estate
(e.g. under a tenancy or lease agreements).
Commercial Negotiations
• Before the parties enter into negotiations they sometimes
execute a letter of intent which sets out general conditions
of the final contract and the time frame for negotiations. It is
also an indication of the parties’ intents to execute a contract.
Pre-contractual arrangements
• The parties may also enter into a more formal preliminary
contract (which should take the form of a notarial deed if one
desires to effect acquisition before the court in the case of the
other party’s refusal) specifying the terms and conditions and
the execution date of the final contract.
• The preliminary contract provides in most cases for the
buyer’s/seller’s additional conditions/requirements which
should be fulfilled before the final contract is signed, e.g.
removing buildings, obtaining some administrative
decisions, etc.
Pre-contractual arrangements
• Once all the conditions have been met and the parties have
agreed on the final version of the contract, they execute a
sale contract. It must be done before a notary in the form of a
notarial deed which is mandatory for the transfer of real estate.
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Investors Guide to Europe 2015