Buying a flat to get more secure
ResidentialThe Office of Competition and Consumer Protection has prepared the assumptions of a draft amendment to the act on the protection of the rights of the purchaser of a flat or detached house, called the developers’ act. The document contains new solutions which are meant to ensure the safety of buyers of apartments in the event of the developer's bankruptcy, the cease of construction works, the untimely transfer of ownership or the termination of a residential trust account by the bank. “The 2011 development act significantly improved the situation of apartment buyers. However, it did not solve all problems,” says Marek Niechciał, the president of the Office of Competition and Consumer Protection. “After a few years, we can see what else could be done in order to protect home buyers better. After all, it is one of the most important investments in their lives,” he adds. The main purpose of the amendment is to protect the payments of future residents better. To make it possible, the Office proposes: liquidation of open housing escort accounts (MRP) without a collateral, linking buyers' payments with the progress of work on the construction site, introduction of mandatory termination of the escrow account contract by the bank if the developer does not complete the construction. In addition, the developer could close the escrow account only when it establishes the right of separate ownership for the last unsold residential unit. The Office of Competition and Consumer Protection would also like to extend the regulations to completed premises. Thanks to this, their buyers would gain protection of the money paid in until ownership is transferred onto them. They would not lose it if the developer went bankrupt in the meantime. They would also have the same rights associated with the receipt of the flat and reporting defects like those who had previously joined the investment. According to the amendment, the developers’ act would cover not only the purchase of apartments, but also related car parks, bicycle boxes or shares in the ownership of a residential street. At the moment, two different contracts are concluded for a flat and a car park, but the payments for a parking space are not subject to the protection resulting from the developers’ act. The Office would also like the developers’ act to include the rights and obligations of the parties in the case of the bankruptcy of the bank that runs the escrow account. Another important solution proposed by the Office is the introduction of a mandatory annex to the developer contract, which will be the consent of the bank (financing the developer) or another creditor secured by a mortgage, for the buyer to receive a flat with a clean mortgage on the payment of the full price. Now, such consent is not required, so in the event of the developer's bankruptcy, the bank crediting it has priority in terms of satisfying claims. The new provisions will therefore be beneficial for the buyer who will receive a flat without mortgage charges. Without such consent, the developer agreement would be invalid. ‘Prime’ rentals, which concern the best commercial premises with an area of 100 sqm earmarked for fashion and accessories, located in leading centres, are traditionally the highest in Warsaw (up to EUR 130 / sqm per month). The rates on the other main markets range from EUR 45 and 60 per sqm per month, with the prospect of stabilization in the short and medium prospect.
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