• Varitex, a developer from Łódź, failed to inform purchasers of houses on the Srebrna Ostoja housing estate that a warehousing and logistics complex and production facilities may be built in the neighbourhood.
• Such information must be included in the information prospectus.
• The fine amounts to more than PLN 54 thousand.

The Office of Competition and Consumer Protection (UOKiK) continues to receive complaints about developers. In some cases, they do not conclude agreements in the form of notarial deeds, thereby depriving their customers of protection; they require signature of mandates which are irrevocable and do not expire even upon death of the buyer, and customers cannot submit any comments thereon. The complaints also address cases where development companies place advertising banners on properties and stipulate that flat owners are not entitled to payment therefor or designate specific notaries for conclusion of agreements.

The most recent decision of the President of the Office of Competition and Consumer Protection concerns Varitex, a company based in Łódź, and its Srebrna Ostoja investment in Konstantynów Łódzki. One consumer complained that the developed failed to inform him that there were plans to construct warehouses and production facilities in the vicinity of the housing estate. For many buyers this may be inconvenient due to noise and heavy traffic of delivery vehicles. The Office instigated proceedings and found that the information prospectus indeed failed to include such information.

In accordance with the so-called Development Act, a prospectus must contain information on investments which are planned within a 1-kilometre radius, among others. Additionally, the prospectus contains a section describing the spatial development plan for neighbouring plots. We have confirmed that none of these contained information on the planned construction of warehouses and production facilities. It was only during sales that the company added information to the section on investments planned within a 1-kilometre radius. “Purchase of a flat is an important life decision. I order to make it, one analyses all information on the property – especially when construction has yet to begin. The analysis is based on information prospectuses which are supposed to aid in making the decision. These prospectuses are indispensable, which is why they cannot be misleading and must contain accurate and complete information,” says Marek Niechciał, President of UOKiK. “Developers cannot expect purchasers to check and analyse spatial development plans on their own. I would also like to remind undertakings that neighbouring plots are not limited to the ones adjoining a given property,” Niechciał adds.

UOKiK imposed a fine exceeding PLN 54 thousand (PLN 54,460) on Varitex. The company ceased the impugned practices. The decision is not final and may be appealed against to court. “This decision shows that the rights of flat buyers are not respected. I would like purchasers to be protected to an even greater extent. This objective will be achieved by amendment of the so-called Development Act. It would be best if money, frequently from a bank loan, could be collected exclusively in closed fiduciary accounts. Another solution would be establishment of a guarantee fund by the industry to serve as a guarantee for open accounts,” Niechciał says.

Tips for consumers purchasing a flat

• The rights of purchasers and obligations of developers are regulated under the so-called Development Act.
• Each developer beginning to sell flats must have an information prospectus.
• The prospectus features e.g. examples of investments completed by the developer, information on the buildings and roads which will be constructed in the vicinity, when the construction works are to begin and end, the schedule thereof, the standard of finish.
• Check in the brochure how the developer protects your money – whether it is collected in an open or closed housing fiduciary account. Only a closed fiduciary account ensures full protection, as in this case the developer will only receive money once the property has been built and the title thereto transferred to the consumer.
• If the prospectus should not contain complete information or the information should prove inaccurate, you can withdraw from your agreement within 30 days from conclusion thereof. The developer will then return the money already paid thereto.
• Before you conclude an agreement with a developer, you should check if the developer has a construction permit and a transcript from the National Court Register, read the financial statements and learn more about the construction plans. These documents should be in possession of your developer.
• Developer agreements are concluded only in the form of notarial deeds. They serve as the basis for recording your claims in the land and mortgage register for the property.
• The developer cannot impose a notary on you.
• If the developer makes the flat available to you later than agreed, you should enforce contractual penalties and demand compensation in court.
• Do your premises have defects? The developer has 30 days from signature of the acceptance protocol to remove the defects if it has acknowledged them.

Consumer support:

Phone: +48 801 440 220 or +48 22 290 89 16 – consumer helpline
Email: porady@dlakonsumentow.pl
Branches of the Consumer Federation
Consumer ombudsmen – in your town or county

Contact for the media:

UOKiK Press Office
pl. Powstańców Warszawy 1, 00-950 Warszawa
Phone: +48 695 902 088
Email: biuroprasowe@uokik.gov.pl
Twitter: @UOKiKgovPL