Securing a real estate agent’s commission in Poland – a practical guide

The commission payable to a real estate agent in Poland is remuneration for their commitment, expertise, effective action and professional service throughout the entire process of selling or renting a property. The commission often reflects the multifaceted work of the agent, including market analysis, preparing the property for sale, conducting negotiations, organising presentations and, in many cases, providing formal and legal support for the entire transaction. As a rule, in Poland the commission does not cover the agent’s remuneration (profit) for bringing about the transaction, but also covers all costs incurred by the agency, such as fees for advertising on internet portals, travel costs to the property, marketing activities and the preparation of promotional materials.

In order to effectively secure the agent’s right to commission and minimise the risk of disputes with clients, estate agencies should ensure that the issue of remuneration is precisely and comprehensively regulated in contracts concluded with clients. However, our experience shows that, many real estate brokerage agreements in Polish market practice are drawn up in a hurry, and the contractual provisions themselves are formulated in an imprecise manner, often based on ‘templates from the internet’. In many cases, agency agreements take the form of a form used for all clients, filled in by the agent with the client’s details, property details and commission amounts. It is also common for the agency agreement to be very general, containing only a few provisions, while further arrangements between the client and the agent are made verbally. In many cases, additional arrangements concern, for example, the agent’s involvement in marketing activities.

Such situations often lead to problems for agents in enforcing commission payments from clients or even refusal by clients to pay commission. As a result, in many cases, agency firms are forced to pursue their claims in court, which involves costs and is often time-consuming.

Therefore, in order to avoid disputes concerning the agent’s remuneration under the agency agreement, in this publication we have attempted to discuss how to properly secure the payment of commission, what contractual provisions are worth considering, and what to pay particular attention to in order to minimise the risk of disputes and legal problems.

Written form of the brokerage agreement – legal requirement and practical significance

The first and key issue when concluding a real estate brokerage agreement is the absolute necessity to comply with the appropriate form – written or electronic (with a qualified electronic signature). This requirement stems directly from Article 180(3) of the Polish Real Estate Management Act, according to which the scope of agency activities is specified in an agency agreement, which – under pain of nullity – must be concluded in writing or in electronic form.

The reservation of nullity means that an agency agreement concluded in any other form – e.g. orally, through implied actions, or by sending scans of signed documents by e-mail – will have no legal effect between the agent and the client. In practice, this may mean that the agreement will not be effectively concluded and the intermediary will not acquire the right to remuneration.

Practical example from Polish case law:

‘Pursuant to Article 73 § 1 of the Polish Civil Code, if the law requires a legal transaction to be in writing, in document form or in electronic form, a transaction performed without complying with the required form is invalid only if the law provides for strict invalidity. Failure to comply with the statutory form therefore results in the invalidity of the legal transaction.’ (judgment of the Regional Court in Warsaw of 6 September 2019, ref. no. XXIII Ga 278/19)

However, it seems that the requirement to conclude a real estate brokerage agreement in writing (or electronically with a qualified signature) is not only a necessity provided for by law, but also brings many practical benefits for both parties to the agreement.

First of all, an agency agreement concluded in writing better protects the interests of the agent by specifying the scope of their obligations, determining the amount of remuneration and the time when it should be paid, and in the event of non-payment and a legal dispute, it constitutes strong evidence of the existence and content of the legal relationship between the parties. The requirement to conclude a contract in writing is therefore not just an unnecessary ‘formality’, but can protect the agent (and his client) from future misunderstandings.

Of course, merely complying with the written form is not enough to consider the agreement secure. It is crucial to precisely define the obligations of the parties, particularly with regard to:

1. The moment when the commission becomes due – the brokerage agreement should specify at what point the broker acquires the right to remuneration, i.e. whether at the moment of bringing the parties to the transaction together, undertaking all activities leading to the conclusion of the agreement, or only at the moment of signing the final agreement by the parties. Different settlement models may lead to different legal consequences, and imprecise provisions in this regard may result in a refusal to pay.

• The amount of commission due to the intermediary and the method of its calculation – the intermediary agreement should specify precisely how much the intermediary’s remuneration is, whether it is set as a fixed amount or a percentage of the transaction value, and whether it includes VAT.

• The scope of the agent’s obligations and the conditions for considering the service to have been performed – the agency agreement should specify what specific services on the part of the agent are covered by the agreement (e.g. presentation of offers, negotiations, participation in the signing of the agreement, etc.), as well as what actions of the agent will be considered sufficient to earn the commission. This will avoid allegations that the service was not properly performed or that the client brought about the transaction without the agent’s involvement.

At what point does the agent acquire the right to commission?

Pursuant to Article 179 of the Polish Real Estate Management Act, real estate brokerage consists in performing, for a fee, activities aimed at the conclusion of agreements by other persons:

1. purchase or sale of rights to real estate;
2. purchase or sale of cooperative ownership rights to premises;
3. rental or lease of real estate or parts thereof;
4. other than those specified in points 1-3, the subject of which are rights to real estate or parts thereof.

It is therefore clear from the provision that an agency agreement is a paid agreement, which in practice means that a real estate agent in Poland is entitled to remuneration for performing the activities specified in the agreement. This remuneration, most often in the form of a commission, constitutes payment for professional activities aimed at concluding a contract by the agency’s clients, such as the sale, purchase, rental or lease of real estate or rights related thereto. The remuneration of the brokerage agreement is therefore a fundamental element regulating the relationship between the broker and the client and constitutes the legal basis for the broker’s claim for payment of remuneration for the services provided.

In accordance with the above-mentioned provision of the Act, the agent’s obligation to perform specific activities does not imply an obligation on the part of the agent to bring about the conclusion of a contract between the parties. In practice, this does not depend on the will or actions of the agent, but solely on the parties to the transaction. In other words, the agent has no legal tools to bring about the conclusion of a transaction and, consequently, to acquire a claim for remuneration.

A real estate agency agreement in Poland is therefore, as a rule, an agreement for diligent action for which the agent receives remuneration. Diligent action is understood as the conscientious, reliable and professional performance of all activities covered by the brokerage agreement, aimed at achieving the objective of the agreement, such as (for example) preparing an offer, promoting the property, conducting negotiations or providing legal advice, with due diligence and professional competence. It therefore seems that the agent’s actions do not have to result in the actual conclusion of a contract by the parties in order for the agent to acquire the right to remuneration.

However, due to the freedom of contract resulting from Article 353(1) of the Polish Civil Code, the parties may modify the statutory regulation and make the obligation to pay remuneration conditional upon the effective conclusion of a contract between the client and the buyer. The contract for diligent action will then be transformed into a contract for results, and therefore remuneration will be due to the intermediary only if the parties to the transaction conclude a contract, regardless of the degree of involvement of the intermediary or the number of activities performed by them.

It is important for both parties to the agreement that, within the limits of the freedom of contract resulting from Article 353(1) of the Polish Civil Code, the parties may specify the scope of the agent’s obligations in the agreement, provided that these provisions do not conflict with the nature of the legal relationship, applicable law or the principles of social coexistence.

How broad is the scope of freedom of contract and where does the autonomy of the parties’ will end in real estate brokerage agreements?

In practice, therefore, the question arises as to the limits of freedom in shaping the content of a real estate brokerage agreement in the light of Article 353(1) of the Polish Civil Code. According to the views of doctrine and case law, the limit of freedom of contract ends where a provision of the contract violates a mandatory provision.

A practical example from Polish case law:

“In doctrine and jurisprudence, there is no doubt that the contractual freedom of the parties can only be limited by provisions of a iuris cogentis nature, which means that it is not permissible to determine the content of a contractual relationship or its purpose in such a way that would result in a violation of such provisions. In other words, the limit of freedom of contract ends where a provision of the contract violates a provision of this nature” (judgment of the Polish Court of Appeal in Szczecin, 1st Civil Division, of 2 October 2014, ref. no. I ACa 381/14).

For this reason, any provisions of an agency agreement that aim to circumvent or violate mandatory provisions – e.g. Article 180 of the Polish Real Estate Management Act or consumer protection provisions – are invalid by operation of law (Article 58 § 1 of the Polish Civil Code).

For example, in a situation where a real estate brokerage agreement only covers the conclusion of a preliminary agreement (and not a final agreement), while the broker’s remuneration becomes due upon signing the agreement, it seems that such a formulation of the obligation may be contrary to the Polish Real Estate Management Act. An analysis of Article 179b of the Polish Real Estate Management Act shows that the activities of an agent should be aimed at the conclusion of agreements for the acquisition or disposal of rights to real estate by other persons, which clearly indicates definitive agreements rather than preliminary agreements. A preliminary contract for the sale of real estate therefore does not meet the criterion of ‘acquisition or disposal of rights to real estate’. Its subject matter is not the right to real estate, but the parties’ commitment to conclude a contract in the future transferring that right. In this situation, it is highly likely that the remuneration will not be due to the real estate agent in Poland.

Other practical examples include the use of a stronger position by an agency to impose unfair (abusive) contractual terms on consumers within the framework of freedom of contract. The sanction for recognising a contractual provision as abusive is its invalidity. Circumstances that may indicate the imposition of unfair contractual terms by an agent may include, for example, situations where:

• the agent is also entitled to remuneration if the client finds a contractor on their own,
• the agency agreement provides for a disproportionately long term of validity together with an exclusivity clause,
• the amount of remuneration has been determined in a manner disproportionate to the agent’s activities,
• the agency agreement provides for its automatic renewal without any active action on the part of the client (so-called renewable clauses).

What practical problems are associated with making the remuneration of a real estate agent  in Poland dependent on achieving a specific result?

As indicated above, in accordance with the provisions of the Polish Real Estate Management Act, the agent’s obligation to perform specific activities does not automatically mean that the agent is obliged to conclude a contract or achieve a specific result.

However, in accordance with the principle of freedom of contract cited above (Article 3531 of the Polish Civil Code), the real estate agent  in Poland and their client may structure the contract in such a way that the agent’s obligation includes bringing about the conclusion of a specific contract (e.g. a contract transferring the right to real estate), which may affect the terms of remuneration and the scope of liability of the parties.

In many cases, however, this may cause practical problems.

Imprecise understanding of the concept of ‘result’

First of all, there are different approaches in the literature and Polish case law as to how the term ‘achieving a result’ should be interpreted. It is pointed out that this does not only refer to the actual sale of the property, but also to other events, such as bringing the parties to the transaction together — even if this was done on the initiative of the client — or the agent creating a real opportunity to conclude an agency agreement. In other words, the result may include both the finalisation of the transaction and actions that significantly contribute to its conclusion, creating conditions enabling the parties to make a decision.

Lack of definition of the result in the contract

The parties often define the result itself imprecisely in the brokerage agreement. For example, in the provision: ‘The broker undertakes to perform activities aimed at selling the property, and is entitled to remuneration upon achieving the result,’ there is no definition of what exactly ‘achieving the result’ means. It is unclear whether this refers to finding a potential buyer, signing a preliminary agreement, or the final conclusion of the sale agreement. It is equally unclear at what point the agent is entitled to remuneration – whether after the parties have decided to conclude the agreement or only after it has actually been finalised.

Dependence of the result on external factors

The result should be achievable by the agent alone. If the successful completion of the transaction depends on the decisions of third parties (e.g. the bank granting the loan) or other factors beyond the agent’s control, it is difficult to determine unequivocally whether the agent has fulfilled their obligation.

Practical example from Polish case law:

“The key to the agent’s right to commission is the creation by the agent of a real opportunity and possibility for the parties to the transaction to conclude a contract for the sale of real estate. This means that the agent acquires the right to remuneration only if his actions actually contributed to the conclusion of the contract between the contracting parties” (judgment of the Polish Supreme Court of 23 November 2004, file ref. no. I CK 270/04).

“The payment of remuneration may be conditional upon the effective conclusion of a contract between the client and the buyer, which means that the brokerage contract may be a result-based contract. In such a case, the agent acquires the right to commission only when the transaction is finalised” (judgment of the Polish Supreme Court of 20 December 2005, file ref. no. V CSK 295/05).

“Brokerage is a contract of diligent action, which the parties may, however, transform into a result-based contract, making remuneration dependent on the actual conclusion of the contract (judgment of the Polish Supreme Court of 8 May 2015, file ref. no. III CSK 346/14).

Provisions regarding the payment of commission after the expiry of the brokerage agreement

Another important and often problematic issue is the provision according to which the Polish broker is entitled to commission after the expiry of the agreement. This clause provides that the agent is also entitled to remuneration if the transaction is concluded after the expiry of the agreement, but with a person (e.g. a buyer or tenant) whom the agent referred to the client during the term of the agreement.

According to the position of the Polish Office of Competition and Consumer Protection (UOKiK), such a provision may be considered acceptable, provided that certain conditions are met:

1. The provision cannot be valid indefinitely. The period during which the agent may claim commission after the expiry of the agreement should be realistically justified by the market situation, e.g. the average time taken to sell similar properties. For example, this could be 3 or 6 months from the date of termination or expiry of the agreement.

• The obligation to pay commission should result from the agent’s actual contribution to the transaction. The mere fact that the contract contains a clause on remuneration after its termination is not sufficient – the agent must demonstrate that it was their actions that led to the finalisation of the transaction, even if it took place after the contract expired.

• The provision must refer to specific persons or offers that were presented to the client during the term of the contract. It is unacceptable to introduce a general, blanket clause covering ‘all persons’ or ‘all offers’, regardless of the actual actions taken by the agent.

Scope of activities performed by the agent under the agency agreement

A real estate agency agreement should specify the scope of services provided by the agent in a precise and detailed manner. In practice, this means that the agreement must list the specific activities that the agent undertakes to perform for the client, such as presenting property offers, negotiating the terms of the transaction or participating in the final signing of the agreement transferring the right to the property.

In practice, the scope of the agent’s activities may vary significantly depending on the specifics of the property market and the location in which they operate. For example, in a large city where competition is fierce and the number of listings on the market is significant, the agent may be required to conduct intensive marketing activities, such as comprehensive online promotion of the offer, organisation of professional photo shoots, publication of advertisements on many industry portals, and active search for potential clients.

In smaller towns, where the property market is generally less dynamic and the supply of properties is limited, marketing methods may be different and often less costly or intensive. There, the agent may rely on more traditional forms of promotion, such as local advertisements, networks of contacts or recommendations, as well as individual contact with clients and less involvement in online activities.

For this reason, a real estate brokerage agreement in Poland should take into account the specific nature of the market in question and precisely define what actions are required of the agent in specific circumstances in order to fulfil the contractual obligation.

Commercial properties, such as office, retail, warehouse or service space, are also often the subject of brokerage agreements. In the case of such properties, the scope of the agent’s duties is often much broader than in the case of residential premises, as clients expect not only to find a suitable property, but also to receive advice on the location, exposure, transport accessibility, technical infrastructure and investment potential of a given place.

In a situation where the agent undertakes to find a property for a business with strictly defined requirements, such as premises for medical activities, the agent’s responsibilities may also include specific technical, legal and sanitary criteria that must be met by the property. Due to these additional requirements, brokering such premises often requires cooperation with specialists (e.g. lawyers, sanitary and epidemiological experts) and a detailed analysis of the property documentation. Therefore, an agency agreement concerning such premises should specify in detail the scope of the agent’s duties in this regard and specify which criteria must be verified and met in order for the service to be considered performed.

In practice, a real estate agent in Poland is often tasked not only with finding a contractor or concluding a contract, but also with the comprehensive commercialisation of the property. The commercialisation process includes a range of marketing and sales activities aimed at maximising the market potential of the property. In such cases, the agent’s responsibilities in the commercialisation process may include, among others:

• preparing professional promotional materials (including photographs, visualisations, descriptions),
• conducting a marketing campaign on the internet and in traditional media,
• organising open days and property presentations,
• actively seeking potential clients and building a network of business contacts,
• negotiating contract terms on behalf of the client,
• cooperating with advisors and specialists (e.g. solicitors, appraisers),
• advising on optimising the offer in terms of market needs.

The scope and intensity of these activities may vary depending on the type of property (commercial, residential, specialised) and the specifics of the local market. For this reason, it is advisable to specify in the agency agreement exactly what specific commercialisation activities the agent undertakes to perform, as well as at what stage of the process the remuneration will be due. The agreement then changes from a typical agency agreement to a comprehensive sales or rental service agreement, which includes not only agency activities, but also a full range of marketing, advisory and negotiation services, often with a specific schedule of activities and detailed obligations of the parties.

Summary

Concluding an effective and secure real estate brokerage agreement in Poland requires not only compliance with the statutory written or electronic form, but above all, precise formulation of its content. However, market practice shows that many agreements are concluded in a simplified, unclear manner or based on inadequate templates, which consequently leads to numerous disputes, including those concerning the payment of commission.

In order to effectively protect their interests, estate agents should pay particular attention to several key elements of the agreement, such as the correct determination of the moment of acquiring the right to remuneration, regulating the situation after the expiry of the agreement, or specifying the scope of the agent’s obligations in detail, e.g. through clauses providing for the payment of commission if the transaction took place with a person indicated by the agent, but after the expiry of the agreement.

A properly drafted brokerage agreement in Poland is not only a tool that protects the broker’s interests, but also a form of transparent regulation of the relationship with the client, which helps to build trust and a professional image for the agency. Therefore, regardless of their experience, estate agents should always verify the content of the agreements they conclude, use individually tailored templates and, in case of doubt, seek professional legal advice. This is the only way to effectively claim remuneration and minimise the risk of disputes with clients.