What Is Real Estate And How Does Property Law Work In Poland?
Property law in Poland, covering real estate and its different categories and ways of acquiring and disposing of real estate, is an extensive topic. This is also a highly important subject from an economic perspective. Investing in the Polish real estate – especially for foreigners – requires an understanding of the market. It is beneficial for foreigners to know the possibilities provided by Polish law, especially when investing your own money.
Definition of real estate and its divisions
According to Polish law, real estate only includes:
- parcels of land,
- buildings that are permanently attached to the land,
- parts of buildings (units) if they can be separately owned (e.g., a part of a building can be an apartment or a commercial space located in a building with multiple units).
Looking at this division, it can be said that by the Polish legal system, we have three types of real estate:
- land — which is nothing more than plots of land, that can have various purposes: agricultural, residential, commercial, forests, roads, etc.,
- entire building — such as single-family houses, commercial buildings, etc.,
- individual units — meaning apartments or commercial spaces.
Property law in Poland
Issues related to real estate law are regulated in the section of the civil law called “property law” („prawo rzeczowe” in Polish). In a very simplified manner: this section regulates provisions related to having ownership rights to things or animals.
There are various forms of possession in the Polish legal system. However, the right of ownership is the broadest and strongest property right one can have over a possessed thing – movable or immovable. This right provides the owner with the most benefits and the most opportunities for independent disposal (movable or immovable).
The right of ownership is transferable and hereditary. It can be sold, donated, leased, rented, or otherwise disposed of. It can also be encumbered, e.g., by a mortgage. Anything movable or immovable (real estate) – can be the subject of ownership.
The right of ownership of real estate is indefinite. This means the right to possess belongs to the owner regardless of the passage of time and lasts until the owner transfers it to another person.
Various ways of acquiring real estate
Polish law distinguishes many types of real estate ownership transfers. The most common are:
- sale of real estate — a form of transferring ownership rights for a fee. Upon conclusion of a sale agreement, the seller undertakes to transfer the ownership right to the buyer and deliver it to them, and the buyer undertakes to pay the agreed price,
- inheritance of real estate — when real estate passes upon the death of the owner (testator) to their heirs (we will discuss how inheritance law works in Poland in another article),
- donation of real estate — by concluding a donation agreement, the owner of real estate transfers the ownership right to another person free of charge,
- dispossession of real estate — a form of transferring the ownership, which is permissible by law only in exceptional situations, when it is carried out for public purposes and for fair compensation, e.g., in the case of planned road construction, when it is necessary to buy up plots of land that the State does not own,
- exchange — an agreement under which each party undertakes to transfer to the other party the ownership, in exchange for the commitment to transfer another thing.
In summary
Under Polish law, there are various forms of ownership, but the right of ownership gives the owner the most rights. One can have ownership rights to movable things, but also to immovable things, namely real estate. The right of ownership is a right guaranteed in the Polish Constitution, and all the rights granted to the owner are subject to legal protection, which is the same, regardless of citizenship.