Preliminary agreement for the sale of real estate in Poland – what should a foreigner know?

A preliminary agreement for the sale of real estate in Poland is a key element in the process of purchasing a flat, house or plot of land, both by a Polish citizen and by a foreigner. Its main purpose is to legally secure the future conclusion of a final agreement in a situation where, for factual or legal reasons, it is not possible to transfer ownership at the time of signing the preliminary agreement (e.g. lack of financing, unregulated legal status of the property, awaiting an administrative decision).

For foreigners planning to purchase real estate in Poland, it is crucial to understand the legal mechanism of a preliminary agreement, as its conclusion does not lead to the transfer of ownership of the property. However, the conclusion of a preliminary agreement allows for the formal ‘locking in’ of the terms of sale: price, date and other essential elements of the transaction. Only the conclusion of a final agreement transfers ownership of the property.

In this publication, we will present a number of practical issues related to the conclusion of preliminary agreements in Poland.

What is a preliminary agreement under Polish law?

Pursuant to Articles 389 and 390 of the Polish Civil Code, a preliminary agreement is solely an obligation of the parties to conclude a final agreement in the future, most often a real estate sale agreement. A preliminary agreement must specify the essential terms of the future sale agreement, in particular:

• the parties to the transaction (i.e. who is buying and who is selling the property),
• the subject of the sale (i.e. details of the property being sold),
• the price (i.e. the amount for which the property is being purchased),
• the date of conclusion of the final contract (although some court rulings indicate that it is not necessary to specify the date for the contract to be valid).

A preliminary contract does not therefore lead to the transfer of ownership of the property, but only creates an obligation to conclude a final contract in the future on the agreed terms.

When should a foreigner sign a preliminary agreement in Poland?

The conclusion of a preliminary agreement by a foreigner in Poland will be justified in particular in situations where, for legal or factual reasons, it is not possible to conclude a final agreement transferring ownership of the property, but it is the intention of the parties to secure the possibility of acquiring the property on agreed terms in the future. The doctrine indicates that ‘The institution of a preliminary agreement is used especially in cases where the parties do not want or cannot – at the time of concluding the preliminary agreement – conclude a final agreement; however, they intend to guarantee its conclusion in the future.’ (W. Borysiak (ed.), Polish Civil Code. Commentary, 34th edition, 2025).

In practice, a preliminary agreement is concluded in a situation where, before the conclusion of the final agreement, at least one of the following conditions must be met:

1)    obtaining permission from the Polish Minister of Internal Affairs and Administration for the purchase of real estate by a foreigner, which we have discussed in more detail in this publication “Purchase of real estate by a foreigner in Poland – when is a permit from the Polish Ministry of Internal Affairs and Administration required?” and in this publication: “Acquisition of real estate by a foreigner in Poland – a comprehensive guide“,

2)    conducting and completing the credit procedure in order to obtain a mortgage loan from a Polish bank financing the purchase of the property,

3)    conducting a legal review of the property (due diligence), which we describe in more detail in this publication,

4)    actual vacating of the premises and its handover by the current tenant or property owner,

whereby the above conditions may occur jointly or only in one or more variants simultaneously.

The conclusion of a preliminary agreement in Poland primarily allows the property to be ‘blocked’ for the time necessary to effectively carry out the above procedures and preparatory activities preceding the conclusion of the agreement transferring ownership. On the other hand, it allows the parties to precisely regulate the legal consequences of not obtaining the required administrative consent, refusal to grant a loan, a negative result of a legal examination of the property, or failure to vacate the premises within the agreed time limit, before the final transfer of ownership of the property takes place.

A practical example from Polish case law:

“The essence of a preliminary agreement is the commitment of one or both parties to conclude a future agreement, which must be specified and include at least the essential provisions necessary for the promised agreement to come into effect. The use of a preliminary agreement by the parties is usually justified by circumstances that prevent the conclusion of a final agreement at a given moment. When concluding the final agreement, the parties may also wish to create certainty that the desired final agreement will be concluded” (judgment of the Polish Regional Court in Łódź, 3rd Civil Appeals Division, of 17 July 2019, ref. no. III Ca 553/19).

Deposit in a preliminary agreement in Poland

In real estate practice, in the vast majority of preliminary agreements, the parties provide for a deposit. In Polish law, a deposit in a preliminary agreement for the purchase of real estate serves as a security and a means of disciplining the parties to conclude the final agreement. Polish legal doctrine indicates that a deposit fulfils two functions: it increases the certainty of performance of the agreement, but also serves as an instrument for sanctioning its non-performance (P. Machnikowski (ed.), Obligations. General Part. Volume II. Commentary, 1st edition, 2024).

Therefore, if a deposit is provided for in the preliminary agreement and the agreement transferring ownership is not concluded for reasons attributable to the buyer, the deposit is forfeited to the seller, whereas if the agreement is not performed for reasons attributable to the seller, the seller is obliged to return double the amount of the deposit (article 394 of the Polish Civil Code). In Polish law, the deposit therefore serves as a kind of ‘compensation’ for non-performance of the obligation by the other party (the seller or the buyer).

Importantly, all the rules concerning the deposit, as set out in Article 394 of the Polish Civil Code, are dispositive in nature. In practice, this means that the parties are free to determine its content and conditions in the contract. This allows the deposit mechanism to be adapted to a specific situation – it may serve a function similar to that of an advance payment or contain additional sanctions for the party that has failed to perform or has improperly performed the obligation secured in this way.

As a result, the parties may modify the statutory effects of the deposit in the preliminary agreement, in particular by making its fate dependent on the reason for not concluding the promised agreement. For example, the parties may stipulate that the deposit will be refunded in part if a foreigner does not obtain consent to purchase the property from the Polish Ministry of Internal Affairs and Administration, or if a negative credit decision is issued by the bank financing the transaction.

Therefore, it is important that, prior to concluding a preliminary agreement, the parties negotiate these issues in detail and then precisely include them in the preliminary agreement so that the interpretation of the provisions does not raise any doubts. Of course, the more detailed the terms and conditions are, the better for both parties. For example, the parties may agree that:

“if the Promised Sale Agreement is not concluded by 31 December 2026, due to the fact that the Buyer, despite its best efforts and due diligence, has not obtained a bank loan for the payment of the remaining part of the price by the date of conclusion of the Promised Sale Agreement, despite the Buyer having previously submitted a request to at least two banks in order to obtain this loan, the Parties undertake to terminate this agreement and the Sellers are obliged to return the entire amount of the deposit in its nominal value to the Buyer within 3 days from the date on which the Promised Sale Agreement was to be concluded, however, the condition for the Sellers to return the indicated deposit amount in nominal value to the Buyer shall be the presentation by the Buyer of a scan of a letter/information from two banks refusing to grant her a loan.”

It seems that this type of provision is sufficiently precise to allow for its unambiguous application in the event that the circumstances described in the agreement materialise. If the buyer proves that the conditions set out in the contract have been met, in particular by presenting relevant documents confirming the impossibility of completing the transaction (e.g. a decision by banks to refuse a loan or a document confirming that the required administrative consent has not been obtained), the legal consequence provided for in the contract is triggered. The result will be the return of the deposit in full, in accordance with the mechanism specified in the preliminary contract.

A practical example from Polish case law:

“It should first be noted that when the parties were aware of the relationship between the purchase of the property and the buyer obtaining funds from a bank loan, they assumed a certain risk. However, if the bank refuses to grant a loan, the buyer cannot always be held liable for failing to fulfil their obligation to conclude the final agreement. This is the case when the buyer proves that they have taken all necessary steps to obtain a positive decision from the bank regarding the granting of a loan. This includes, for example, having a promise from the bank before signing the preliminary agreement, submitting the required documentation to the bank on time, cooperating with the bank and the seller, so, as a rule, such a person cannot be blamed (judgment of the Polish Regional Court in Wrocław, 2nd Civil Appeals Division, of 8 March 2022, ref. no. II Ca 824/21).”

The information presented above does not exhaust all practical aspects related to the deposit in a preliminary agreement. Detailed and practical explanations regarding the deposit in a preliminary agreement for the purchase of real estate in Poland by a foreigner are presented in a separate publication.

Advance payment in a preliminary agreement

Alternatively, in Poland the parties may also decide to use an advance payment mechanism instead of a deposit. An advance payment is a partial payment towards a future principal payment, i.e. the price of the property, and (unlike a deposit) does not serve as security for the performance of the contract.

Consequently, if a foreigner is required to obtain consent for the purchase of real estate from the Polish Ministry of Internal Affairs and Administration or to conclude a loan agreement, and the parties specify an advance payment rather than a deposit in the agreement, in the event of failure to meet the condition, i.e. a negative decision from the Polish Ministry of Internal Affairs and Administration or a negative loan decision, the advance payment will be refunded in full.

A practical example from Polish case law:

‘If the final contract is not concluded, the advance payment made towards the price becomes an undue payment, which is subject to refund, regardless of the reason for the failure to conclude the final contract’ (judgment of the Polish Court of Appeal in Poznań, 1st Civil Division, of 1 June 2020, ref. no. I ACa 271/19).

The use of an advance payment in a preliminary agreement will be an advantageous mechanism for a foreigner purchasing real estate in Poland, given that in practice a foreigner cannot automatically assume that the Polish Ministry of the Interior and Administration will issue a positive decision. For example, the authority may decide that the application does not sufficiently demonstrate the foreigner’s ties with Poland, as discussed in more detail in this publication.

Similarly, a foreigner cannot be certain that the bank will issue a positive credit decision. For example, the bank may decide that the applicant’s creditworthiness is insufficient, and in practice it also happens that the credit decision may be issued after the deadline specified in the preliminary agreement.

For these reasons, an advance payment is generally a more advantageous solution for a foreign buyer, as it significantly reduces their financial risk in the event of failure to meet the conditions for concluding the final agreement. In practice, this risk is usually higher for foreigners than for Polish citizens. Of course, accepting an advance payment is also less advantageous for the seller, who in such a model does not obtain the economic security of contract performance that a deposit provides.

Seller’s statements in the preliminary real estate sale agreement

In the preliminary agreement, the seller makes a number of statements regarding the legal and factual status of the property. Such statements are not merely a formality, but have specific legal significance for both parties to the transaction. For foreigners, who are often not fully familiar with the Polish legal system or the specifics of local procedures, these statements are an important point of reference when assessing the risks associated with the transaction. Thanks to them, the buyer can be certain about the legal status of the property.

The seller’s statements contained in the preliminary agreement serve to enable the buyer to base their purchase decision on reliable information and, if it turns out to be untrue, to pursue claims against the seller. The main purpose of the seller’s statements is therefore to protect the buyer’s interests and to transfer to the seller the responsibility for the accuracy of information about the legal and factual status of the property. In notarial practice, the statements serve to allocate information risk, i.e. they transfer to the seller the responsibility for the accuracy of certain circumstances which the buyer is not able to fully verify on their own at the time of concluding the preliminary agreement. Of course, the mere presentation of statements by the seller should not exempt the buyer from conducting a thorough legal analysis of the property being purchased.

For example, in the case of a residential property sale, the seller’s statements may concern:

The legal status and documents relating to the property, for example:

• granting powers of attorney related to the property (the content of which is known to the buyer),
• commissioning the building in accordance with building regulations,
• possessing a valid energy performance certificate for the premises,
• the property is not located in a revitalisation area or Special Revitalisation Zone (which excludes the municipality’s right of first refusal),
• ensuring formal access to the property from a public road,
• no changes in the land and mortgage register and no new applications for entry.

Encumbrances, debts and claims related to the property, for example:

• no mortgages, easements, life annuities and other third party rights,
• no tax and public law arrears,
• no arrears to the housing community and utility providers,
• no claims by former owners (so-called reprivatisation claims),
• no pending court, administrative or enforcement proceedings,
• no risk of a fraudulent conveyance claim (the transaction does not harm creditors).

The manner of use of the premises, for example:

• no rental, lease or other agreements concerning the premises,
• no registered residents,
• no registered business activity or company headquarters in the premises,
• use of the premises in accordance with their intended purpose, without unauthorised construction.

Technical condition of the premises, for example:

• the efficiency of all installations (electrical, plumbing, heating, ventilation, gas),
• the absence of damage (fire, flooding, other random events),
• compliance with technical and safety standards enabling habitation.

Planning and investment environment, for example:

• absence of ongoing planning proceedings or resolutions on public investments that could significantly reduce the value of the property (e.g. planned road, railway line).

The seller’s financial and tax situation, for example:

• no grounds for declaring bankruptcy,
• no VAT taxpayer status in connection with this transaction (the sale is not carried out as part of business activity).

Documents that the seller should present upon conclusion of the final agreement

As indicated above, the preliminary agreement is the first formalised legal document, followed by the signing of a second document, i.e. the final agreement (sale agreement). The preliminary agreement under Polish law should therefore specify the specific documents that the seller should present upon conclusion of the final agreement. Typical documents will include:

• current certificates confirming that no persons are registered as residing in the premises,
• certificates confirming that there are no outstanding payments to the community and other institutions,
• energy performance certificate for the premises,
• documents required from sellers confirming the legal and technical condition of the premises.

In addition, in the preliminary agreement, the seller should additionally undertake to make the following statements in the final agreement, among others:

• all information provided to the buyer regarding the legal and technical condition of the premises is true and complete,

• the premises are not subject to any court or administrative proceedings that could restrict their transfer to the buyer,

• there are no hidden defects in the premises or obligations towards third parties that could encumber the premises after the transfer of ownership,

• on the date of conclusion of the final agreement, the premises will be free of registered residents, registered business activities or the registered office of any institution, and all liabilities related to the premises will be settled.

Method of payment of the price

Already at the stage of the preliminary agreement, the parties should precisely specify the method of payment of the price in order to avoid any doubts and disputes. The parties should therefore:

• indicate the source of funds, i.e. specify whether the payment will be made from the buyer’s own funds or in whole or in part from a bank loan, which affects the method and date of payment;

• specify the date and form of payment, i.e. indicate the specific date of payment and the form of transfer of funds (as a rule, this will be a transfer to the seller’s designated bank account), including any intermediate dates or stage settlements in the case of a loan;

• link the payment to the fulfilment of obligations by the seller, i.e. stipulate that the payment of the price will only be made after the seller has fulfilled certain conditions, including: handing over the premises free of third party claims, without any registered residents, and settling all financial arrears related to the premises (rent, utilities, taxes);

• oblige the seller to provide all documents necessary for the bank to activate the loan (e.g. statements, certificates, access to the premises for valuation by an appraiser), which ensures that the buyer is able to make timely loan payments;

• specify the legal consequences of failure to meet the payment obligation, for example by subjecting the buyer to enforcement proceedings under Article 777 §1 of the Polish Code of Civil Procedure, together with an indication of any interest for late payment or other contractual penalties;

Handover of the property covered by the agreement

In addition, the parties should precisely determine how and when the property will be handed over to the buyer. For example, the parties may specify that the handover of the subject of the agreement will take place within one working day of payment of the full price, free of financial arrears, without any registered residents and in an undeteriorated condition.

The transfer of the premises should also be confirmed each time by a handover protocol signed by both parties, which will include the readings of utility meters, the technical condition of the premises and any equipment left behind (if it is the subject of the agreement).

The parties may additionally specify the details of the handover itself, i.e. the date and place of the meeting and the person responsible for drawing up the handover protocol.

In addition, the seller should also submit to enforcement proceedings pursuant to Article 777 §1 of the Polish Code of Civil Procedure with regard to the obligation to hand over the premises. This solution is intended to provide the buyer with full protection in the event of the seller’s failure to fulfil this obligation, enabling the quick enforcement of the right to take possession of the property.

Disclosure of the buyer’s rights and claims in the Polish land and mortgage register

The parties should also regulate in the agreement the issue of disclosure of rights and claims arising from the preliminary agreement in section III of the Polish land and mortgage register, which is particularly important in the context of the land and mortgage register system (more about the land and mortgage register system in this publication.

The seller should consent to the disclosure of such rights and claims in the land and mortgage register in favour of the buyer, but no applications in this regard are made in the notarial deed itself. The parties should agree that if the buyer submits a request to enter a claim in section III of the land and mortgage register and then either party withdraws from the agreement, the buyer will be obliged to provide the seller with a relevant written statement enabling the claim to be deleted from the land and mortgage register, with a notarised signature.

This solution will ensure that the land and mortgage register remains free of unnecessary entries and that the interests of both parties are duly protected in the event that the transfer of ownership agreement is not concluded.

Summary

A preliminary agreement for the sale of real estate in Poland serves foreigners to secure the future purchase of real estate when the conclusion of the final agreement is temporarily impossible (e.g. lack of consent from the Polish Ministry of Internal Affairs and Administration, waiting for a loan, due diligence). This agreement specifies the key obligations of the parties, such as the price, the date of conclusion of the final agreement, the method of payment, the transfer of the property and the seller’s declarations. It is important that the agreement clearly specifies the obligations of the parties so that its provisions can be effectively enforced in the event of non-performance.