• Do you know how many square meters of your apartment are occupied by partition walls? What is the actual area of your dwelling?
• The President of UOKiK has issued 6 decisions challenging the extent of information provided to consumers by developers in Warsaw, Wrocław and Lublin. The fines total more than PLN 1.6 million.
• The Consumer Protection Authority constantly monitors the real estate development services market and takes measures to protect apartment buyers.

The area of the apartment and the calculated price per square meter are the elements of a real estate developer’s offer that consumers pay attention to first. When considering the purchase of a property, they should be given the necessary information to assess whether the deal suits them. The consumer is the weaker party to a contract concluded with a professional entity, i.e. an enterprise – a real estate developer, hence the rights and interests of consumers should be adequately protected and secured.

The President of UOKiK has been monitoring the industry for years and reacting to irregularities, attempts to circumvent regulations, misleading practices, prohibited contractual provisions. He conducts proceedings and issues decisions on fines. Over the years, the Authority has actively participated in the work on legal amendments to the Act on Real Estate Developers expanding the protections afforded to real estate buyers.

The President of UOKiK has also conducted a survey of the real estate developer services market. The Authority checked what construction standards are used by enterprises, how they interpret them and how they measure the area of apartments and houses. The survey covered entities that are part of the 20 largest capital groups on the real estate development market. The focus was on how consumers are informed whether area under partition walls is included in the total area, as this is the only aspect with regard to which the President of UOKiK has statutory authority.

– Consumers should know the total area of the dwelling and its price without a shadow of a doubt, including the area under the walls, which in some cases may currently be included by companies in the usable area. Only complete knowledge regarding the size of the usable area with the layout proposed by the developer maintained would allow consumers to make an informed decision whether to purchase the property. The Minister of Development and Technology, responsible for construction, may clarify the scope of the applicable construction standards by way of a regulation, including to completely eliminate the practice of counting areas under partition walls in the total area of the residential dwelling being sold – said Tomasz Chróstny, President of UOKiK.

The President of UOKiK has issued 6 decisions – they apply to the following companies: JP Development Horyzont Poznań from Warsaw, Space Investment Strzegomska 3 Otyńska and TN Stabłowice 1 from Wrocław, Śródmieście Wilanów PL and Brama Wilanowska PL from Warsaw, and Capitalia Real Estate Gęsia from Lublin. These enterprises misled consumers about the actual area of the dwelling.

An important piece of the floor

Information about an apartment – its location, layout, number and size of rooms and total area – is gleaned by consumers from dwelling information sheets provided to them by real estate developers. These also featured marked partition walls. When a decision to buy the property was made, these information sheets formed an integral part of the contract. The dwelling information sheets of the 5 real estate developers whose actions were challenged by the President of UOKiK did not include information regarding the area under the partition walls, which was included in the total area of the residential dwelling. As a result, the consumer could not determine the actual area of the dwelling that they would be able to use with the proposed layout of the partition walls. Therefore, the consumer was also not able to determine what part of the total price is represented by the price for the area under partition walls. On the other hand, one of the real estate developers did not include the area under partition walls in the total area of the dwelling specified in the developer contract despite providing information about the area under partition walls on the dwelling information sheet. In consequence, consumers received false information as to the area and price of the dwelling (smaller area – lower price). Then, when entering into the contract transferring ownership, they had to pay surcharges for the area under the demountable walls.

The issue of whether or not to include the area under the demountable walls in the usable area of residential dwellings and single-family houses arises from the construction standard used by the real estate developer.

– The competent authority for the precise determination of rules for calculating the area of dwellings is the Minister of Development and Technology, who has legislative competence over building regulations, in particular by issuing a regulation defining the scope of application of standards. I pointed out the legislative solution to the issue of standards in a letter to the Ministry of Funds and Regional Policy, declaring my support for the competent authority in preparing solutions that will expand the scope of consumer protection and provide greater clarity on how the area of residential dwellings offered by real estate developers is to be measured – explained Tomasz Chróstny, President of UOKiK.

The President of UOKiK imposed a total of more than PLN 1.6 million in fines on the charged real estate developers – JP Development Horyzont Poznań from Warsaw (PLN 1,052,021), Space Investment Strzegomska 3 Otyńska (PLN 46,561) and TN Stabłowice 1 from Wrocław (PLN 20,694), Brama Wilanowska PL (PLN 100,888) and Śródmieście Wilanów PL (PLN 56,313) from Warsaw, Capitalia Real Estate Gęsia from Lublin (PLN 334,979). The decisions are not final, the businesses have lodged appeals against them with the Court of Competition and Consumer Protection.

These are not the only actions taken by the President of UOKiK with regard to the real estate development services market. In light of the change in regulations that requires real estate developers to provide clear information on the prices of dwellings, the President of UOKiK is monitoring the market. Businesses are in the process of implementing the new requirements, which most of all provide for the presentation of clear and legible information. Given the variety of practices used by real estate developers on the market, the evaluation of individual actions taken by businesses – how they have implemented the amended regulations – will be possible within the framework of soft calls, investigations or proceedings concerning practices violating collective consumer interests conducted by the President of UOKiK. Administrative proceedings may end with a fine of up to 10 percent of revenue.