74 | Investor Guide to Europe 2014
Î
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 nota-
rial deed which is mandatory for the transfer of real estate.
•
The sale contract is legally binding on the parties from the time
of its execution.
•
The transfer deed is then submitted, usually by a notary, for
registration by the local court in the land and mortgage regis-
ter and also by local authorities in the land register.
•
Title to ownership is transferred at the time the final contract
is executed. However, where perpetual usufruct is transferred,
registration thereof in the land and mortgage register is requi-
red for its effectiveness.
•
The seller is responsible for the correctness of legal title to the
real estate under the Civil Code, based on warranty for physical
and legal defects. Nevertheless, it is a common practice for
sellers to make representations as to title and other issues. If
representations on the legal or physical conditions of the real
estate are untrue, the seller may be liable towards the buyer.
The seller may also be responsible under certain specific condi-
tions for environmental damages.
Î
Development agreement
•
It is an agreement used for selling residential apartments that
have not been constructed yet. This special act provides the
purchaser with certain rights connected, inter alia, with infor-
mation about the investment and other issues.
CoMMERCIaL LEaSES
Leases of buildings used for commercial purposes are covered
by general rules defined in the Civil Code. The Code provides for
a tenancy contract (
najem
) where the tenant is authorised to use
the thing (property, premises, etc.) or a lease contract (
dzierzawa
)
where the lessee is not only authorised to use the thing but also
to collect profits generated by the thing.
Although many issues are freely negotiable (rent level, rent
indexation, potential renewal of the tenancy/lease, contract dura-
tion – to certain extent – etc.), there are certain restrictions under
mandatory regulations that affect contents of tenancy/lease
contracts. These restrictions apply mainly to defining the parties’
rights and obligations connected with:
•
Duration
•
There are generally no restrictions on the tenancy/lease term;
the term can be either fixed or non-fixed. Nevertheless, in the
case of commercial tenancy contracts and all lease contracts,
an agreement executed for a period of more than 30 years is
deemed, on expiry of the 30-year period, to be executed for a
non-fixed term.
•
Tenants/lessees do not have a statutory right to renew a
tenancy/lease. Under the freedom of contracts principle,
however, some provisions in this respect can be incorporated
in contracts.
Î
Maintaining the subject of tenancy/lease
•
Basically, the landlord/lessor has to hand the subject of
tenancy/lease over to the tenant/lessee in a condition suitable
for the agreed use and maintain it in this condition throughout
the tenancy/lease period. However, minor repairs connected
with day-to-day use are carried out by the tenant/lessee.
Î
Termination rules
•
If the tenancy/lease term is non-fixed, it can be terminated
by notice; no grounds have to be given to make the notice
effective. A fixed term tenancy/lease can be terminated for the
reasons specified in the contract (e.g. arrears in tenancy/lease
payments, other breaches of major contractual provisions).
•
Moreover, there are certain statutory possibilities for the lan-
dlord/lessor to terminate a tenancy/lease, which include:
- the tenant/lessee using the subject of tenancy/lease
contrary to its purpose or in a manner contrary to that
agreed in the contract,
- the subject of tenancy/lease is misused in a way leading
to the risk of it being lost or damaged,
- the use of neighbouring premises in the building is made
difficult, and
- arrears in rent payments for at least two full payment
periods occur (in the case of tenancy of premises and
lease contracts, termination on this basis has to be prece-
ded by additional actions taken by the landlord/lessor).
•
The tenant is entitled to terminate the tenancy effective imme-
diately if there are defects in the premises posing a hazard
to human health, even if the tenant was aware of the defects
when entering into the tenancy agreement. The tenant can
also terminate the tenancy if defects which make the agreed
use of the tenancy subject impossible are not removed by the
landlord when requested to do so, or if they are not removable.
Î
Transfer of business or real estate
•
In the case of the landlord’s/lessor’s business being trans-
ferred, the purchaser assumes the tenancy/lease. If the real
estate is sold, the new landlord/lessor is entitled to terminate
the tenancy/lease by notice, unless it is a specific fixed-term
tenancy/lease.
TaX
Î
Direct acquisition of a property
CIT/PIT
•
Income generated from the sale of real estate by corporate
income taxpayers is subject to 19% CIT.
•
The sale of real estate by individuals within the course of
business activities is subject to PIT at 19% or at a progressive
rate, depending on the taxation scheme chosen. The sale by
an individual not performing business activities is generally
subject to 19% PIT. However, after the lapse of 5 years counting
from the end of the year in which the property was acquired or
built, the sale is PIT exempt.
•
The sale price must not differ from the property market value.
Otherwise, tax authorities may assess revenues in accordance
with the market value.
