Property law: Types and maximum terms of leases in Poland - a lesson in terminology

The PCC distinguishes between "dzierżawa" leases, which allow the lessee to collect benefits ("fructus") yielded by the leased object, and "najem" leases, which allow the lessee to merely use the leased property but not to collect benefits. Both of these terms can be translated into English as "tenancy" or "leasehold" (and are used interchangeably), but they can differ when a contract stipulates a specific purpose.

Usually the najem is a typical agreement for leasing a property. However, considering the fact that revenues from subletting can be regarded as fructus, a dzierżawa lease agreement can also be entered. From an economic point of view, this distinction is mainly of interest to owners who want to maintain long-term lease relations.

A dzierżawa can be established for a maximum of 30 years and a najem for 10 years. After the expiration of the agreed-upon term, both types of agreement are regarded as an indefinite-period lease, which means that they can be terminated within relatively short statutory periods - a maximum of three months in regards to a najem lease, and one year in regards to a dzierżawa lease.

Termination of a lease

An indefinite-term lease may be terminated within the contractual termination period or - if there is no such period agreed upon by the parties - within the statutory period.

With respect to najem agreements, the lease may be terminated within a period of three days to three months, depending on the period within which rent is to be paid. If the rent is payable monthly, the lease may be terminated within the three-month termination period.

Regarding dzierżawa agreements, if there are no contractual terms, the lease may be terminated within a six-month termination period. If the agreement covers an agricultural property, a one-year termination period is applicable.

A fixed-term lease agreement may not be normally terminated before expiration of the term unless the parties agree in the contract to specific situations in which such a termination would be possible. In the latest Polish legal literature, the clause "for important reasons" can also be employed in this situation. Leases invariably contain a provision allowing the lessor to terminate on non-payment of rent or breach of the lease.

Compulsory termination

It should be noted that local authorities have certain rights to appropriate property for public purposes and that this also includes property held under leases. Leases of the appropriated property expire after three months from the day on which the decision concerning the appropriation becomes final.

Transfer of a lease object

In the case of the transfer of ownership, the buyer automatically enters into the lease as the lessor and has the right to terminate the lease within the statutory time period. Lease agreements may, however, be entitled to a degree of legal protection if a fixed-term agreement was concluded with a certified date (ie, a date confirmed by an official authority, including a tax office or notary).

In such a case, the new owner of a property may not terminate a lease agreement prematurely if the leased property was delivered to the lessee prior to the ownership transfer. The lessee has the right to claim damages against the former owner if he has to return the leased object earlier than agreed in the contract. The provisions allowing the lessor to terminate the agreement early do not apply to residential leases.

Tacit prolongation

Upon the expiry of a lease, any renewal is subject to mutual agreement between the parties. However, if the lessee continues to use the leased object with the consent of the lessor after the expiration of the lease term, the agreement shall be regarded as prolonged for an undefined period of time.

Michał Sękowski is a senior associate for the real estate team at DLA Piper in Warsaw