• REAL ESTATE SALES AGREEMENT - WHAT YOU NEED TO KNOW?

    Real estate sale agreement

    Real estate sale agreement,also commonly known as a purchase and sale agreement, it plays a very important role in economic transactions. On its basis, the owner of an apartment, house or land changes. Very often, its conclusion is the execution of a preliminary sales contract previously concluded between the parties. I wrote extensively about the latter in the article: : “Preliminary contract – in writing or at a notary?” LINK.

    What is a real estate sales contract?

    The sales contract is regulated by the provisions of the Civil Code.

    According to them, by real estate sales contract:

    • the seller - undertakes to transfer its ownership to the buyer and deliver it to him,
    • buyer - undertakes to collect the property and pay the seller a specified price (Article 535 of the Civil Code).

    From a legal point of view, a sales contractreal estatehas the character:

    • bilaterally binding, because the seller and the buyer are both creditors and debtors to each other,
    • mutual, because both parties undertake in such a way that the performance of one of them (sale and release) is to be equivalent to the performance of the other (payment of the price) - they are therefore equivalent,
    • paid,
    • consensual, due to the fact that it is concluded by submitting two consistent declarations of will - no other legal actions are necessary to achieve such an effect.

    Who can be a party to a real estate sale agreement?

    The parties to a real estate sale agreement may be:

    • physical people,
    • legal persons - for example foundations or capital companies, such as a limited liability company or a joint-stock company, as well as
    • organizational units that are not legal persons and have been granted legal capacity by law, for example a partnership or limited partnership.

    It may also be concluded if both parties are entrepreneurs or only one of them runs a business.

    What can be the subject of a real estate sales contract?

    The subject of the described contract is real estate.

    What is meant by this concept? Well, it's not that simple at all.

    No provision of applicable law clearly defines what "real estate" is. From a legal point of view, the most important regulation in this respect is contained in Art. 46 § 1 of the Civil Code. According to it, real estate includes parts of the earth's surface constituting a separate object of ownership (land), as well as buildings permanently attached to the land or parts of such buildings if, under specific regulations, they constitute an object of ownership separate from the land.

    The above-mentioned provision therefore only specifies what types of real estate there are:

    • ground,
    • building,
    • local.

    Land real estate

    Land properties are parts of the earth's surface constituting a separate subject of ownership. This is a basic type of property.

    It should be noted that this concept is broader than the definition given above. This is due to the fact that buildings, permanent devices and plants, e.g. trees, located on them and permanently associated with them, as well as rights related to the ownership of real estate, are components of a given land and belong to its owner. So, when you buy a house, you are actually purchasing a plot of land and a residential building on it.

    What is meant by the term "permanent connection with the land",explained in detail by the Supreme Administrative Court in its judgment of January 17, 2020 (reference number II OSK 526/18, LEX no. 2785214), pointing out that: :“The existence of foundations is not the only determinant of the legal qualification of a building as permanently attached to the land, because currently available technical means also allow the use of other technical solutions (…). The point is for a building to resist the natural forces of nature (...) the feature of "permanent connection with the ground" comes down to locating the object permanently enough to ensure its stability and the ability to counteract external factors that may destroy it or cause it to shift or move on another place."

    It should be added that land properties may be:

    • built-up,
    • undeveloped.

    They may also belong to different types, depending on their purpose, namely:

    • agricultural,
    • forest,
    • construction,
    • recreational,
    • investment.

    Single-family houses – what are their types?

    In accordance with the provisions of the Act of July 7, 1994, Construction Law (consolidated text: Journal of Laws of 2023, item 682, as amended) - "building" - a structure that:

    • is permanently attached to the land,
    • is separated from the space by building partitions and
    • has foundations and a roof.

    According to another definition - buildings are roofed structures, permanently connected to the ground, with built-in installations and technical devices, used for permanent needs and adapted to accommodate people, animals or protect residential objects (Regulation of the Council of Ministers of October 3, 2016 on the Classification of Fixed Assets (Journal of Laws, item 1864).

    In addition, Polish law also distinguishes the following concepts:

    • residential buildings,
    • single-family residential buildings.

    The former, in accordance with the above-mentioned regulation, are buildings in which at least half of the total usable area is used for residential purposes.

    The latter, in accordance with the Construction Law:

    • detached or semi-detached, terraced or group buildings,
    • serving to meet housing needs,
    • constituting a structurally independent whole and in which it is allowed to separate no more than two residential premises or one residential premises and a commercial premises with a total area not exceeding 30% of the total area of the building.

    The above-quoted definitions show that a single-family building may be considered:

    • detached building,
    • semi-detached building,
    • terraced building,
    • building in a group development.

    Building real estate

    You should know that building properties are buildings that are permanently attached to the land, but under specific regulations do not constitute part of it. Therefore, they are a separate subject of property. This situation occurs in the case of perpetual usufruct.

    Local real estate

    Real estate properties constitute "parts of the building" and are at the same time a separate subject of ownership. It is therefore a set of rooms in a building with the same purpose, which are intended for separate use. In particular, this concept includes residential or commercial premises located in a given building (Act of August 29, 2014 on the energy performance of buildings - Journal of Laws of 2024, item 101).

    Pursuant to the Act of June 24, 1994 on the ownership of premises (consolidated text: Journal of Laws of 2021, item 1048, as amended) - an "independent residential premises" is a room or a set of rooms separated by permanent walls within the building. intended for permanent residence of people, which, together with auxiliary rooms, serve to meet their housing needs.

    In turn, "commercial premises" is a room or a set of rooms separated by permanent walls within a building, intended for permanent stay of people, which, together with auxiliary rooms, are used for purposes other than residential purposes.

    According to the above-mentioned regulation of the Council of Ministers - a commercial premises is a part of a building containing one room or a group of rooms, separated by permanent building partitions, or the entire building, other than an apartment, technical room or utility room.

    The premises may include rooms as its component parts, even if they are not directly adjacent to it or are located within the boundaries of the land property outside the building in which the premises are separated. These include in particular:

    • basement,
    • attic,
    • cell and
    • garage.

    You must know that an "apartment" may have the status:

    • a separate premises, which is an independent property, i.e. with a share in the ownership of the land on which the building in which it is located was built, or
    • cooperative ownership right to a residential premises - then the owner of the land is the housing cooperative.

    It should be noted that for separate premises there is an obligation to keep a land and mortgage register, while for premises subject to cooperative law there is no such obligation.

    What form should the real estate sales contract take?

    The provisions of the Civil Code clearly indicate that the real estate sales contract should have a special form. They stipulate that an agreement obliging to transfer ownership of real estate should be concluded in the form of a notarial deed. The same applies to an agreement transferring ownership, which is concluded in order to fulfill a pre-existing obligation to transfer ownership of real estate (Article 158 of the Civil Code).

    The above means that the contract in question must have this form, even if the preliminary contract on the basis of which it was concluded was only in ordinary written form. I wrote extensively about the preliminary real estate sale agreement in the article: : “Preliminary contract – in writing or at a notary?” LINK.

    You should know that failure to comply with the above condition will render the concluded contract invalid and therefore will not produce any legal effects (Article 73 § 2 of the Civil Code).

    Therefore, if you intend to buy a house, apartment or land, you must be aware that you will not be able to do it without a notary!

    What should a real estate sale agreement contain?

    Every car sales contract should include:

    • indication of the date and place of its conclusion,
    • identification of parties,
    • description of its subject,
    • indication of the price and the method and date of its payment,
    • indication of the deadline and rules for issuing its subject,
    • other elements.

    Date and place of conclusion

    The elements are necessary due to the effectiveness of bringing possible claims under the contract before the Court. The indication of the date of conclusion of the preliminary agreement has an impact ondetermining the maturity date of the resulting claim and determining the time within which it expires. In turn, where the contract was concluded is important for determining local jurisdictionpcourt, to which any dispute arising in connection therewith should be resolved.

    Determination of parties

    Another necessary element of the contract in question is the precise definition of its parties, referred to as "Seller" and "Buyer", respectively. You must remember that the parties' data provided in the contract enable their precise identification. In relation to a natural person, it is necessary to provide the name, surname, residential address, ID card number and, optionally, PESEL number. When it comes to a legal person or an organizational unit with legal capacity, the necessary data include the full name (company), registered office address, NIP number, REGON number, KRS number and data of the person representing this entity. Most often, this will be the President of the Management Board. The contract may also contain the parties' e-mail addresses.

    Item description

    The concluded contract should also include a precise description of its subject, including the area of the property, its location (address), plot number and land and mortgage register, as well as indication of all equipment related to it. In the case of a residential premises, you must indicate how many and what rooms it consists of and what purpose and equipment it contains.

    Price

    An essential element of every real estate sales contract is the precise definition of its price agreed by the parties.

    Since the sales contract is a mutual contract, the claim for payment of the price becomes due upon the Seller's non-monetary performance, i.e. the delivery of the item, unless the parties have specified a different payment deadline in the sales contract. In the latter case, the seller's claim will become due only after this deadline.

    Just so that there is no doubt in this respect,the real estate sales contract should precisely specify the method (e.g. part in cash, part by transfer) and deadline for payment of the price. In addition, if the buyer has previously paid a deposit or advance payment, the sales contract should include a provision to include the amount towards the agreed price.

    It is worth mentioning that the purchase of an apartment from a developer is subject to VAT, which is part of the gross price. In addition, it is necessary to pay tax on civil law transactions (PCC), which is charged to the buyer.

    Delivery of the subject of the contract

    The real estate sales contract should include information on when, where and on what terms it will be handed over to the Buyer. In the case of a house or apartment, in practice this is limited to providing the buyer with the keys to the front door when signing the contract.

    Other items

    The real estate sales contract should also include:

    • a declaration by the seller about its physical and legal condition, i.e. that it does not contain aesthetic or technical defects, and that he is its sole owner and is not encumbered with any debts or limited property rights, especially mortgages and easements. He should also provide an assurance that no enforcement proceedings are being carried out against him that may lead to the seizure of the property and its subsequent sale to cover the debts. It is best if this fact is confirmed by appropriate certificates, especially from the relevant Tax Office and ZUS branch,
    • determining which party bears the costs associated with concluding the contract,
    • handwritten signatures of both parties.

    What documents are necessary to conclude a real estate sale agreement?

    To conclude a real estate sale agreement, both parties must go to a notary with all the necessary documents, including:

    • proof of identity of the parties,
    • a document indicating the basis for the purchase of the property by the current owner, who is the seller, in the form of, for example, a court decision or a notarial deed of its previous sale indicating when and from whom he purchased it, etc.,
    • an extract from the land and mortgage register regarding the property being sold,
    • an extract from the premises register, building register or land register,
    • in the case of land properties - an extract from the spatial development plan or a certificate of its absence, as well as a certificate stating whether the plot of land is located in a revitalization zone, is covered by a simplified forest management plan or a decision of the starosta specifying tasks in the field of forest management,
    • in the case of sale of residential premises - a certificate from the commune office that no one is registered there and a certificate from the building administration that the owner of the apartment has no arrears in paying fixed fees.

    All the documentation indicated above should be delivered to the notary's office at least one day before the meeting scheduled to conclude the real estate sale agreement. This will allow the notary to calmly prepare the draft of the notarial deed.

    If one of the parties cannot appear at the notary's office in person, they may be represented by an attorney, acting on the basis of a power of attorney drawn up in the form of a notarial deed.

    It is worth pointing out that the original real estate sales contract remains in the notary's office, and its parties will receive one extract each. The notary keeps it in the appropriate repertory for a period of ten years. Then it is transferred to the court archives.

    Real estate sales contract and brokerage office

    The decision to buy real estate is very important for every average person, as it involves a significant expense, often consuming many years of savings. Therefore, it should be taken after a deep divethoughtfully and with appropriate caution.

    You must be aware that the real estate market is full of sellers presenting seemingly very attractive offers, which, however, are full of "catches" that result in a sharp increase in costs for the buyer after the transaction is finalized. A person who does not have the appropriate knowledge and experience, in principleis unable to properly verify them.

    Therefore, you should seriously consider whether it would be better to use the help of a real estate agency with appropriate practice and a positive opinion among satisfied clients. Digging by yourselfthrough hundreds of ads that you are unable to properly verify anyway, and then choosing a seller yourself exposes you to an unproductive waste of time and, more importantly, money.

    A properly selected real estate agency will not only ensure that you choose the best available property - exactly the one you want"desired", but also an appropriate "screening" of the credibility of the offer presented by the seller, as wellefficient and comprehensive preparation of the transaction itself.

    It should be added that the more well-known real estate agencies with a strong market position constantly cooperate with selected notary offices. Thanks to this, they obtain "preferential" conditions for their clients - often the notary fee in such a case, thanks to the notary's help, is distributedmyselfequally on both parties to the transaction, so it does not only burden the buyer, but is levied on a half-and-half basis on each of them.

    Remember - choosing the right real estate agent will save you time, nerves and money! Although you will have to pay him appropriate remuneration,however, it is only a small part of the amount you have to spend on the desired property. In return you get: certainty, safety and reduced costs!