Cases in which – as a result of, for example, the bankruptcy of a developer or a bank – the buyer is left without buildings and without invested money, will not happen anymore.
Yesterday, the House of Representatives passed a law protecting the rights of buyers of an apartment or single-family home and the Development Guarantee Fund. The developers warn, however, that the new regulations will translate into higher prices and a lower supply of apartments.
417 deputies from: PiS, Koalicja Obywatelska, Lewica and Poland 2050 voted in favor of the bill.
The law strengthens the buyer’s position in relations with the developer. It offers a Development Guarantee Fund, which aims to protect buyers from both the developer and bankruptcy. The maximum contribution to DFG is 2 percent. In the case of open credit accounts and 0.2 – closed accounts. The actual premium is determined in a decree by the Ministry of Labor and Technology Development. As per previous statements, the cap should be 1 percent. In the case of opening accounts.
In addition, the law also regulates the issue of attachment contracts that have not yet been regulated by law. The amount of fees on this account cannot exceed 1%. Building price included in the information leaflet. It also introduces new information commitments, such as handing over the information leaflet to the buyer.
Parliamentary Infrastructure Committee rapporteur Anna Baloch (PiS) explains in an interview with the DGP that the purpose of the changes is, among other things, to prevent circumvention of the rules. Until now, according to her, the Developers Act (i.e. Laws Magazine of 2019, Section 1805, as amended) was limited only to those buildings for which an occupation permit has not been issued.
He adds that another problem that needs to be solved is the possibility of the buyer losing the property and the money invested.
– I was talking about it in 2011, when the developer law was passed. At that time, in the parliamentary version, the law stipulated three types of trust funds: closed, open with bank security, and open with insurance. In the Senate, a fourth option was added – an open trust fund without any guarantees, and it became the most widely used solution on the market, Anna Baloch notes.
According to the deputy, another very important condition that protects buyers is that the last installment of the money accumulated in the escrow account will be paid to the developer after the conclusion of the contract. In addition, at the acceptance stage, the buyer has the right to demand that the defects be removed within the time limit and refuse to accept the goods if the physical defects are not removed.
The House of Representatives adopted three amendments recommended by the committee. He rejected all opposition amendments, including KO and Left, regarding the DFG’s contribution reduction, and several developers’ demands, made by Representative KP Jacek Tomczak. The deputy also demanded that the bill be rejected in its entirety, but did not gain the support of the parliament.
Rated amendments were submitted by Anna Paluch. He also explains, according to the first of them, in the event that the construction expert does not discover a major defect, the opinion costs will be charged in full to the buyer of the building. In the original release, these costs were to be shared in half between the buyer and the developer. He explains that this amendment aims to protect against violation of this right by buyers and unjustified accusations made by them while accepting the buildings. Two other amendments were adopted that aim to increase funds allocated to social housing in municipalities.
– This is a point in the periphery of needs – this is how Przemislav Dzyug, legal advisor to the Polish Developers Association, comments on the amendment to cover the expertise costs of the DGP. According to him, the DFG collects seven times more than the assumed needs. The provisions of the law are succinctly summarized: – UOKiK is asking 1 billion apartment buyers!
According to Dziąga, UOKiK is also unable to explain how many developers went bankrupt during the term of the developer law. – On one occasion, it mentioned 150 developers since 2012, and again it referred to 110 companies that have been implementing investments in housing, since the law came into effect. The industry says – show the details. UOKiK is silent. There is no justification for this act that will raise the price of apartments – the lawyer convinces.
He also expresses his dissatisfaction with the words of the head of the office, Tomás Krustany, addressed to the developers during the second reading of the project in the House of Representatives. Chróstny said, among other things: – Often times, this extremely powerful developer lobby also points to some myths when it comes to 2-3 bankruptcies, and it’s also somehow misleading. If we are talking about the actual size, and we got information from the courts about the period from the previous law until 2019, then there are approximately 110 bankruptcies of companies that carry out housing investments.
The magazine notes that in UOKiK’s media coverage everything justifies 20 percent. Margins for developers, but forget to add that they are spread over the investment cycle, which lasts from 3 to 4 years. – As one of the few industries that has resisted the epidemic and maintained the level of production and jobs – it receives a new tax from the Office of Competition and Consumer Protection, i.e. a contribution to the Development Guarantee Fund. According to UOKiK, the earning entrepreneur should share his earnings with others. Who will be next? – Asks PZFD attorney.
In turn, the head of UOKiK stressed during the parliamentary debate that the project indicates a situation in which developers make investments not with their own money, but with the money of apartment buyers. He argued that this money should be protected in particular, since the developer, who has an advantage over the buyer, is undoubtedly a powerful and privileged party in the relationship. – He argued – among other things, this gap was filled by these regulations.
Sonia Subczyk Gregel
Zenik Gazeta Browna