Property law: A lesson in history

The State Treasury or a municipality enjoys a statutory pre-emptive right to a property being sold in a number of cases, including: where an undeveloped property has been previously held by the State Treasury or municipality; if the perpetual usufruct right of such a property is being sold; or where the sale of real estate has been registered in the register of monuments and the pre-emption has been disclosed in the land and mortgage registry book.

Consequently, such real estate may only be effectively and validly transferred if the municipality does not exercise its right of pre-emption. The notary who legalizes the deed must notify the municipality of the sale and the municipality then has 30 days to respond.

In these circumstances, the parties will have to first conclude a conditional agreement and once the municipality waives its pre-emption, the parties will need to conclude a second agreement whereby the ownership (or perpetual usufruct right) will be unconditionally transferred to the buyer. If this is not done, the transaction is null and void.

The certainty of debt and taxes

The Polish legal system recognizes a mortgage as a form of security by which a creditor's claim can be satisfied from a debtor's real estate, even if the debtor subsequently alienates it. Therefore, it's essential to thoroughly review the land and mortgage book before you buy, and particularly section IV of the land and mortgage book, where mortgages are disclosed.

If you buy a property, you may not only find yourself liable for someone else's debts but also taxes. There is a danger that a buyer will become liable to pay a seller's arrears in payment of taxes and other tax-like public burdens (such as local taxes, local fees and charges, customs duties, social-security contributions and contributions to the state fund for rehabilitation of disabled persons) up to the value of the purchased real estate.

The letter of the law

Fortunately, a buyer may obtain a certain level of protection against incurring liability for a seller's arrears. In order to secure this additional protection, the buyer must first obtain the seller's written consent and on the basis of this consent apply to the relevant authority for the issuance of a certificate confirming the amount of tax arrears (or non-existence of arrears) as of the day of issuance of such a certificate.

Three-day limit

Thanks to such a certificate (known as a ZAS-Z), the purchaser would be liable only for those arrears of the seller regarding tax and tax-like obligations that are disclosed in the certificates, provided that the sale of the real estate takes place within a validity period of three days (as of the date on which the certificates were issued). If the parties don't close the deal within the three days, then the purchaser either becomes liable for any of the seller's tax arrears or must apply for new certificates.

But mind your ps and qs, or in this instance your zs and ws, and notice the difference between the ZAS-Z type certificates and the ZAS-W type certificates, since the latter does not offer any kind of protection and is merely a source of information.

Patryk Figiel is an associate with Linklaters law firm. E-mail: patryk.figiel@linklaters.com