Change of information obligations of banks in the new Developers Act | In Principle

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Change of information obligations of banks in the new Developers Act

The new Developers Act substantially modifies the rights and obligations of banks in connection with real estate developments. The new regulations significantly increase the scope of rights and obligations of banks, which will entail a greater expenditure of time and effort on their side. Thus the new rules may increase the cost of banks’ participation in the execution of residential developments.

The new obligations of banks under the new Developers Act in Poland (the Act on Protection of Rights of Acquirers of Residential Units or Single-Family Houses and the Developers Guarantee Fund of 20 May 2021) can be divided into two main groups:

  • New obligations related to disbursement of funds from the housing escrow account
  • Information obligations related to submission of data and information to the Developers Guarantee Fund Register.

Obligations regarding disbursement of funds from the housing escrow account

The existing regulations concerning the monitoring of development projects by the bank before disbursement of funds were defined broadly and imprecisely. The new Developers Act makes the scope of oversight by the bank more specific and significantly increases the bank’s powers.

The new obligations related to the disbursement of funds from a housing escrow account include activities related to monitoring completion of each stage of the development or project task prior to disbursement of funds to the developer. This oversight is to be carried out at the developer’s expense and involves verification of a number of circumstances, in particular:

  • Legal title to the property on which the project is carried out
  • Whether the developer is subject to restructuring or bankruptcy proceedings
  • Whether the developer has a building permit or has made the appropriate notification
  • Whether the funds to be (or already) disbursed will be used to finance the development
  • Whether the developer is in arrears with taxes or social insurance contributions
  • Whether the developer has settled payments to contractors or subcontractors
  • Whether the developer has paid contributions to the Developers Guarantee Fund
  • Whether there are arrears to buyers who have withdrawn from development agreements
  • Whether there are any other arrears by the developer in payments to the Developers Guarantee Fund.

In addition, through a qualified person, the bank must verify completion of the relevant stage of performance of the development project. Once execution of the development agreement has been completed, it will still be necessary to verify the occupancy permit or appropriate notification and certificate of the independence of a unit.

A number of circumstances listed above are verified only on the basis of the developer’s statement, while others require independent verification by the bank, based on its own resources.

Verification of these circumstances is essential, because if it is negative, the funds cannot be disbursed. The above catalogue includes a number of issues significant for the security of real estate transactions, and is intended to secure the interests of buyers and to protect their funds.

Information obligations of banks related to submission of data and information to the Developers Guarantee Fund Register

The new Developers Act introduces the Developers Guarantee Fund. Its operation will rely heavily on information and data provided by banks. These data include but are not limited to:

  • Developer’s identification (e.g. company name, NIP, REGON or PESEL numbers, contact details)
  • Data relating to possible bankruptcy proceedings
  • Buyers’ identification data
  • Identification data of banks maintaining housing escrow accounts
  • Details pertaining to the developer and location of the development
  • Measures employed by the developer to protect the buyers’ payments
  • Name of the bank maintaining the housing escrow account.

Moreover, the bank is obliged to provide the Developers Guarantee Fund with data pertaining to development agreements, such as:

  • Dates of conclusion, amendment or termination of agreements
  • Number of the housing escrow account for payments to be made by the buyer
  • Data of the contracting parties
  • Date of withdrawal from the agreement.

The bank will also be required to provide a range of detailed information on the housing escrow accounts and contributions due from developers to the Developers Guarantee Fund.

The data provided by the bank are covered by bank secrecy and will only be used for the purpose of carrying out the tasks set out in the new Developers Act.

Also, the bank’s duties include informing the Insurance Guarantee Fund of the bankruptcy of a developer and failure to continue the development project. In that case, disbursement of funds from the Insurance Guarantee Fund will occur after the bank provides information on the amount of funds returned to the buyer from the housing escrow account, the amount of funds remaining to be paid to the buyer, and the buyers’ identification data. A similar scope of information will be provided by the bank to the Insurance Guarantee Fund in the event of withdrawal of a buyer, administrator or receiver from the agreement.


In summary, the new Developers Act introduces a broad catalogue of new information obligations for banks. To carry them out, it will be necessary for banks to adjust their operations and introduce new procedures for servicing development projects. As a result, the security of funds paid in by buyers will increase, but the time and cost of handling development procedures will become greater too.

Marcin Rżysko, attorney-at-law, Real Estate practice, Wardyński & Partners