How to purchase real estate in Poland

In Poland there are two types of property ownership:
 

• • freehold title (outright ownership)
  • right of perpetual usufruct (ownership for a limited period of time, usually for 99 years)
•  
  In terms of the market value of a real estate under the freehold title or perpetual usufruct, there is no big difference. Usually, the prices are the same.
   
  Apartments in Poland typically are sold as a share in condominium.
   
  The first step in the process of acquisition is to find a real estate property the buyer wants to buy. There are many ways to do it, typically through the real estate agents.
   
  The second step is for the buyer to decide whether he wants to pay with cash or rather with a bank’s loan.
   
  The third step is to carry out the due diligence of the property to secure the deal. Property contracts are negotiated on a “subject to contract’ basis, enabling the parties to withdraw from the transaction up until the time of signing the binding contracts. Prior to signing the contracts, the buyer should carry out an investigation into the ownership and characteristics of the property. This investigation includes making enquiries of the seller and third parties such as local authorities, investigating the seller’s title to the property to establish what rights, covenants etc. affect the title and a site inspection.
   
  If there is a mortgage, loans, servitudes or other form of incumbrance on the property, it should be solved before the property is purchased. The mortgage cannot be removed from the property’s records without bank’s consent.
   
  The seller will normally require the buyer to take the property as he finds it and will exclude all liability for its repair and condition. The buyer should therefore consider commissioning a full structural survey and environmental report prior to closing.
   
  If the buyer pays with cash, then there are two ways of closing the deal. It could be either:
   
  • (a) one time payment and signing the final purchase agreement or
  • (b) splitting it into two steps: signing the preliminary agreement first and paying a deposit and after that, signing the final purchase agreement with payment of the full property price

 
If the buyer wants to pay with the loan, he should go for a two-step process, i.e. signing the preliminary agreement first and then - once he obtained the loan - signing the final purchase agreement. According to Polish law, you can not sell the property under condition. As soon as the purchase contract is signed by both parties in a form of notary deed, there is no way back and the buyer becomes a real estate owner even if he didn’t pay.
 
Closing of the deal takes place at the notary office. At closing, the balance of the purchase price becomes payable. If the buyer pays with the loan, normally the seller receives the money directly from the bank according to the mortgage documents. Handing over of the property to the buyer is normally delayed until the payment of the full purchase price.