This Article is second an article in which I present the assumptions of the draft new law on the protection of the rights of the purchaser of a dwelling or a single-family house and on the Developer Guarantee Fund (hereinafter referred to as the ‘Development Act’), which is currently in the opinion stage of the Standing Committee of the Council of Ministers.
According to the Government Legislative Centre, the planned date of adoption of the bill was to be the III/IV quarter 2019, However, in view of the numerous comments made during the period first arrangements, opinions and consultations for the original draft law amending the Act on the protection of the rights of purchasers of a dwelling or a single family house. The President of the UOKiK presented a draft development bill, which is intended to replace the current law on the protection of the rights of the buyer of the residential or single-family premises.
New rules for the payment of funds from a residential trust account
Turning to the changes proposed in the draft development bill, I will begin by presenting new rules for the payment of funds from the residential trust account. To date, the provisions on the payment from an open residential trust account to the developer provide that this payment will take place after the completion of the development project. Currently, the legislator does not indicate which part of the funds can be paid.
The draft development bill also requires the developer to provide an information prospectus prior to the conclusion of the reservation agreement, the development agreement or the preliminary agreement
The proposed change depends on the amount of the payment, which is the product of the percentage of the cost of a given stage as defined in the development plan or investment task, and the price of the dwelling or single-family house or the price of the residential and utility premises or single-family and utility premises.
In the event that the last stage of the development project or the investment task specified in the timetable is completed, as in the case of closed residential trust accounts, the bank shall pay to the developer the remaining funds paid by the purchaser to the account for the last stage of the work following the receipt of a notarial act of the contract transferring to the purchaser the rights arising from the development contract free of charge, rights and claims of persons third, except for the burden to which the purchaser has agreed. This also applies to pre-existing contracts under which the developer undertakes to enter into a contract promised to build a building+ and transfer ownership of premises, or transfer ownership of a utility premises (hereinafter referred to as ‘pre-accession agreement’).
In addition, the draft development bill provides for a ban on the collection of amounts on the trust account for costs, fees and commissions for the holding of that account. The purpose of this regulation is to eliminate situations in which the bank charges fees from purchasers' funds collected in residential trust accounts. On the other hand, there is no change in the regulation that the developer is charged with costs, fees and commissions for running a residential trust account.
Expanding the responsibilities of the developer
Another of the proposed changes is the extension of the obligations of the developer before the conclusion of the development contract. According to the project, the developer who starts the sale, i.e.
makes public information about the start of offering housing or single-family homes and its readiness to enter into contracts with buyers, is obliged to comply with the requirements set out in the chapter 4 a draft development bill.
The developer is primarily required to draw up an information prospectus and to have the approval of a bank or other mortgage-backed creditor for the unburdened separation of a dwelling or for the free transfer to the acquirer of the property together with a single family house or for the free transfer of ownership of the utility premises purchased with the conclusion of a development contract or a preliminary agreement, if its development project is financed by the funds obtained from the loan and whose repayment was secured by the mortgage on the property on which the building is to be built.
The draft development bill also requires the developer to provide an information prospectus before entering into a booking agreement, a development contract or a pre-contractual agreement.
Clarification of the template for the information prospectus
The format of the information prospectus was supplemented by information such as the date on which the decision to authorise the use of the building or the completion of the construction of a single family house was approved, the content of the information on the single guarantee limit of the bankruptcy of the bank in which the residential trust account is held, the area of the dwelling or single family house, the price of the dwelling or of the single family house, the date of issue of the certificate of the autonomy of the dwelling or the date of establishment of the separate property of the dwelling.
The draft development bill by the President of the UOKiK also indicates a list of documents, which are annexes to the information prospectus, among which were listed, among others, the local spatial planning plan, the study and spatial planning of the municipality, the decision to determine the location of the public target, the decision on environmental conditions, the decision on restricted use areas, local recovery plans, the flood map and decisions resulting from specific provisions, such as: the decision to authorise the implementation of the road investment, the decision to establish the location of the railway line, the decision to authorise the implementation of the investment in the field of public use airport, the decision to permit the implementation of the investment in the area of flood structures, the decision to determine the location of the investment in the construction of the nuclear power plant
In the next part of the series of articles on the draft new development bill, in addition to continuing to discuss the institution's approval of a bank or a creditor secured by mortgage on the unburdened separation of residential premises, issues such as the rules and mode of conclusion and the content of the reservation agreement, the rules and mode of conclusion, and the content of the development agreement and other contracts concluded by the developer with the buyer, the purpose of which is to transfer the property of the residential or single-family premises.