Property Ownership in Poland
Real estate, usually in the form of houses or apartments, has always been an object of serious desire for many Poles, and it was not until the development of the banking system at the turn of the millennium which started offering western-like mortgages on property that people really went for it. With a much better availability of loans, also offered in foreign currencies, such as US dollars, yens, euros and, most notably, Swiss francs, it seemed that this spree would never end. However, this also meant an Eldorado for all those offering, both previous property owners and property developers, resulting in real estate prices going up. Few, however, paid any attention to this as banks were eager to offer mortgages covering not only 100% of the total property value, but often up to 120% or 130%, thus providing an incentive for buyers who could spend the extra money on renovation or furniture purchases.
With the favorable exchange and low interest rates, especially in relation to the Swiss franc, a large group of people took out mortgages in that currency as banks would be effectively charging less than a comparable loan in Polish zloty. As the market slumped towards the end of the first decade of the new millennium, the monthly Swiss franc payments went up, leaving many consumers with the endless fear of the current exchange rate and higher converted installments.
Notwithstanding any of the above, buying real estate in Poland is a complex undertaking requiring a great deal of insight and a thorough understanding of the applicable regulations. Before you venture into the realm of property purchases you will be well advised to seek the support of an experienced real estate agent or notary public, although there are people who will go for it single-handedly to avoid substantial fees and commissions charged by property agents.
After you have located a property (nieruchomość) of your choice that you know is available for sale, the first and foremost consideration for a prospective buyer (potencjalny kupiec) would be to verify whether the estate is free from any encumbrances (obciążenia), such as bank mortgages (kredyty hipoteczne) which are the most common types of burden on any property you may want to buy. There may well be others, such as the rights of third parties (prawa osób trzecich) which also need to be checked for in the land and mortgage register (rejestr ksiąg wieczystych) which recently has been provided for use online, so all you need to know is the relevant number. Armed with this information you can start price negotiations (neocjacje cenowe) with the seller and use your arguments well to slash the initial offering. A number of various factors will influence the price, and these will include, for city properties, ease of access (close and efficient public transport, such as the subway in Warsaw, is often a major consideration for prospective buyers), neighboring parks or relaxation spots, shopping and services, as well as other amenities, such as nearby gyms or leisure centers.
Once agreed on the final price, the two parties may decide, although this is not legally required, to enter into a preliminary agreement (umowa przedwstępna) which may, but need not, be concluded before a notary public (notariusz). On its conclusion it is customary for the buyer to pay to the seller a retaining deposit (zadatek), usually of 10% which, should the final agreement not be concluded through the fault of the seller, would need to be repaid to the buyer as double the amount retained, and if through the fault of the buyer, would be lost to the benefit of the seller. Thereafter, or in the absence of a preliminary agreement, the two parties need to schedule an appointment with a notary public or, if you are helped by a realtor, they will usually arrange this for their clients. What remains then is a visit to the notarial office (kancelaria notarialna) where the final agreement will be prepared, read to the parties, and finally signed. The parties concerned will receive certified copies of the agreement made in the form of a notarial deed (akt notarialny), whereas the original will be retained by the notary public in their records. It is customary for the buyer to settle all fees and charges associated with the deed, along with the relevant tax collected directly by the clerk; these may be substantial so it is worthwhile to look for an office which will offer competitive rates. In the agreement the parties usually agree the manner and timeframe of transferring funds, and this needs to be explicit so there are no misunderstandings as to when and how the money will be received by the seller. The authenticated document you get from the notary public will be used as your property deed (akt własności) to be used before all sorts of offices and agencies to prove ownership of your real estate and potentially sell your property in the future if you so decide, so make sure you keep it safe. And now you can start looking for those movers!