Polish Real Estate Lawyer Ms. Magdalena Sobolewska: “For investors or companies seeking to establish their headquarters in Europe, Warsaw is a viable option. There is a wide range of modern skyscrapers located in the city centre, with great infrastructure (a lot of them also with eco-certificates). They are well communicated with each part of the city and suburbs.”

WOLEP: Please present yourself to the WOLEP community.

Magdalena Sobolewska: I'm an attorney-at-law from Warsaw, Poland, and a Partner in law firm SKS Kancelaria Prawna Stańczak-Kowal i Sobolewska. We offer different legal services. My main specializations are Commercial Law, Real Estate Law, Civil Proceedings and GDPR. I hope you’ll find my interview interesting and informative.

WOLEP: Could you provide us with some information about your professional experience as a lawyer?

Magdalena Sobolewska: I have over a decade of professional experience in handling legal cases and practicing as a lawyer. I completed my studies at the University of Warsaw, following which I underwent a three-year legal trainee at the Bar Association of Attorneys-at-Law in Warsaw. I have worked with various law firms and also served as an in-house counsel for a leasing company.

WOLEP: I am aware that as a real estate lawyer, you have a particular emphasis on development agreements. Are there any changes in Polish legislation of late, that have had a significant impact on development agreements?

Magdalena Sobolewska: Yes, for many years in Polish legislation, there was no special act regarding development agreements, so there were no provisions protecting the buyer, who is the weaker party of the development agreement. In 2011, the first special Act concerning that issue was adopted, its colloquial name being the Development Act. This new Act has imposed a lot of information liabilities on the developer towards the buyer, has regulated the necessary provisions of the development agreement and also has introduced mechanisms protecting buyers in the event of the developer’s insolvency.

After a decade of functioning of this law, it was replaced by a new Development Act, dated 2021, which is in general similar to the previous Act, but also introduces a number of changes and some novelties. For example, it provides the establishment of the Development Guarantee Fund, the fund that protects real estate buyers against the loss of their money.

WOLEP: What are some key considerations and challenges involved when revising development agreements? Does Polish real estate law have any specificities in this regard?

Magdalena Sobolewska: According to the Development Act, every development agreement should contain provisions listed in this Act. For example, the conditions for withdrawing from the development agreement defined in this Act, or the date and manner of notifying the purchaser about the receipt of the apartment or single-family house.

Consequently, when revising development agreements, I need to check whether it contains all the necessary provisions listed in the Development Act. I also need to check whether other provisions put by developer to the agreement are admissible under Polish law. The biggest challenge in revising such agreements is that their content is always prepared by the developer, who is not willing to change any provision.

WOLEP: What are the main factors that determine the success of proceedings concerning usucaption of real estate, and what is most problematic in this legal area?

Magdalena Sobolewska: The real estate can be acquired by usucaption only if certain conditions are met: Self-possession; Continuity of ownership; Elapse of specific time. In my opinion, the most challenging is to prove that my Client has been a self-possessor of a real estate like a proprietor for that real estate. It is not possible to usucape a real estate if the client possesses it only as a usufructuary, a tenant, or a lessee.

WOLEP: What is the importance of land and mortgage registers for turnover of real estates in Poland?

Magdalena Sobolewska: The land and mortgage register is a public document, which means that anyone interested has the right to review it. It is possible to view the land and mortgage register via the website of the Ministry of Justice. That is why access to its content is very easy for anyone with an internet connection. Because of the widespread access of the content of land and mortgage registers, the general principle is that no one can plead ignorance of the entries in the land and mortgage register, or the applications referred to therein. Furthermore, Polish law has established two presumptions according to which: the right entered into the land and mortgage register is complied with the actual legal status; the deleted right does not exist.

WOLEP: How can you help when someone finds discrepancies between the land and mortgage register of his real estate and its actual legal status?

Magdalena Sobolewska: To remove the non-compliance of the content of the land and mortgage register with the actual legal status, I need to initiate, on behalf of my Client, land and mortgage register proceedings. These proceedings is relatively simplified and quick, but can be initiated only when we have appropriate documents to submit to the Land and Mortgage Register’s Court. If we do not have sufficient documentation, I need to initiate a more complicated procedure, and prepare a lawsuit to the District Court. In such lawsuit, I need to convince the Court on behalf of the plaintiff that the entry in the land and mortgage register is incorrect. We can prove it, in these proceedings, with all evidence acceptable under Polish law. Only after obtaining a court decision favorable to the Client, we can change the entry in the Land and Mortgage Register.

WOLEP: Moving on to another issue concerning real estates: Are there any limitations regarding turnover of real estate in Poland by foreigners?

Magdalena Sobolewska: The acquisition of real estate by foreigners is controlled by the State. According to the general rule established by a special Act dated 1920, the acquisition of real estate by a foreigner requires a permit issued by the Minister responsible for Internal Affairs. However, there are many exceptions in this Act. For example, this permit is not required when acquiring an independent residential unit.

WOLEP: Are there any limitations when inheriting real estate after a foreigner?

Magdalena Sobolewska: It depends on the circumstances of a specific situation. Currently, I handle a case for our Client who is a foreigner and inherits real estate in Poland after another foreigner. In this situation, we need to initiate court proceedings for the confirmation of the acquisition of inheritance regarding that particular real estate. It is not enough that the inheritance procedure was conducted and finished abroad. According to Polish regulations, Polish court needs to decide separately who inherits real estate located in Poland.

WOLEP: How would you describe the Polish real estate market nowadays?

Magdalena Sobolewska: Presently, the real estate market in Poland is facing several challenges due to inflation, resulting in a decrease in the construction of buildings. However, the government has recently introduced a special Act, which upon meeting specific conditions, enables individuals to access bank loans with numerous benefits and at a significantly reduced interest rate. This offers a favorable opportunity, particularly for young people, to purchase their first apartment.

Furthermore, the inflation-related problems and rising energy costs have a clear impact on the costs incurred by office and commercial space tenants. In such circumstances, tenants are looking for ways to save money. Some of them decide to reduce the leased spaces, others sublet their office space. For the end of the second quarter of 2023 in Warsaw, the vacancy rate of office spaces was 11.4%. Nevertheless, for investors or companies seeking to establish their headquarters in Europe, Warsaw is a viable option. There is a wide range of modern skyscrapers located in the city centre, with great infrastructure (a lot of them also with eco-certificates). They are well communicated with each part of the city and suburbs. Warsaw can also boast for the highest office building in the European Union – Varso Tower.

WOLEP: What were your first impressions of the WOLEP Real Estate Law Practice? What are your expectations / preferred topics of discussion for our second gathering?

Magdalena Sobolewska: I feel that such a platform for communication between lawyers who are engaged in Real Estate is very important. We can exchange experience and initiate professional collaborations regarding real estate issues. In our second meeting, we could talk more about legal limitations for foreigners regarding turnover of real estate in each country.

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