Purchase of real estate in Poland by foreigners – the Polish land and mortgage register system

What is a land and mortgage register and why is it crucial when purchasing property in Poland?

Pursuant to Article 1(1) of the Polish Act on Land and Mortgage Registers and Mortgages, land and mortgage registers are kept in order to determine the legal status of real estate in Poland. A land and mortgage register is therefore an official, public register whose main purpose is to determine and disclose the legal status of real estate. The land and mortgage register contains, among other things, information concerning:

• the owner of the property, i.e. the natural or legal person entitled to dispose of the property,
• rights in rem vested in third parties to the property,
• restrictions on the disposal of the property, such as prohibitions on sale, encumbrances resulting from court or administrative proceedings,
• mortgages, including the creditor, the registered mortgage amount and its currency, which must be distinguished from the current outstanding debt,

Land and mortgage registers are maintained electronically and can be viewed through the Polish Ministry of Justice’s online system by entering the register number. Viewing the register is free and does not require proof of a legal interest. The register must be distinguished from the underlying court file, which contains the documents supporting entries, such as notarial deeds, court decisions and administrative documents. Under Article 36¹(2) of the Polish Act on Land and Mortgage Registers and Mortgages, the court file may be inspected by a person who demonstrates a legal interest and by a notary. A review of the online register does not replace an examination of the underlying documents where the transaction requires it.

A practical example from Polish case law:

‘Article 1 of the Act on Land and Mortgage Registers and Mortgages formulates the fundamental purpose and main function of land and mortgage registers, which is to determine the legal status of real estate’ (judgment of the Polish Supreme Court of 19 November 2014, ref. no. II CSK 712/14).

The recording and information function of land and mortgage registers

Polish court decisions identify several functions of the land and mortgage register system. Understanding these functions helps a foreign buyer distinguish between information about the property, presumptions concerning registered rights and the separate statutory protection available to certain purchasers.

The most important role of land and mortgage registers is to record the legal status of real estate. This means that the land and mortgage register records, among other things, who the owner is, what rights other persons have, and what restrictions or encumbrances apply to the property.

Evidential function of land and mortgage registers

Under Article 3 of the Polish Act on Land and Mortgage Registers and Mortgages, a registered right is presumed to reflect the actual legal position, and a right that has been deleted is presumed not to exist. These presumptions may be rebutted. They should not be confused with public-faith protection under Article 5, which has its own conditions and exclusions.

The protective and warning function of land and mortgage registers

Land and mortgage registers also protect persons purchasing real estate in Poland by making registered rights, claims and restrictions publicly accessible. Under Article 2 of the Act, a person cannot rely on ignorance of entries in the register or of applications for which a notice has been recorded. Buyers should check both existing entries and notices of pending applications, and investigate any matters that may affect the transaction.

A practical example from Polish case law:

‘The register established for the acquired property reflected its correct actual legal status, and it is incumbent on the parties to a property sale agreement, which is so important for the security of transactions, to exercise due diligence in familiarising themselves with its most up-to-date content’ (judgment of the Polish Court of Appeal in Katowice, 1st Civil Division, of 14 November 2013, ref. no. I ACa 760/13).

“Accepting a situation in which the content of the land and mortgage register at the time of its establishment would not fully reflect the legal status of the property would clearly contradict the principle that land and mortgage registers are kept for the purpose of determining the legal status of property. A ‘register’ which, at the time of its establishment, did not meet the requirement to disclose the full legal status of the property could not serve to efficiently record the legal status of the property and thus ensure the security of transactions, and the land and mortgage register procedure serves precisely – not to assert subjective rights, as some participants in legal transactions would like, but to efficiently disclose the legal status of real estate and, consequently, to ensure the security and certainty of legal transactions” (judgment of the Polish Supreme Court of 11 January 2018, ref. no. III CSK 373/16).

Public faith in the land and mortgage register: protection for a buyer acting in good faith

A key safeguard for a foreigner purchasing real estate in Poland is the principle of public faith in the land and mortgage register, known in Polish as rękojmia wiary publicznej ksiąg wieczystych. Article 5 of the Polish Act on Land and Mortgage Registers and Mortgages may protect a person acquiring ownership or another right in rem through a legal transaction with the person shown in the register as entitled to dispose of that right. This protection addresses discrepancies between the registered legal position and the actual legal position. It is distinct from a seller’s warranty for property defects and from a bank guarantee.

Public-faith protection can allow a buyer to acquire a right even where the seller’s registered entitlement does not correspond to the actual legal position. However, reliance on the register does not automatically establish good faith or make every transaction effective. The conditions of Article 5 must be met, and the exclusions in Articles 6–8 must be considered. The protection does not remove other requirements for a valid property acquisition, including any applicable permit requirements for foreign buyers.

For example, where the seller is shown as the owner but is not the actual owner, a buyer acquiring the property for consideration may be protected if all statutory requirements are satisfied. Protection is unavailable if the buyer knew of the discrepancy or could easily have discovered it. Actual knowledge and deliberate disregard are therefore not the only circumstances that can amount to bad faith.

A practical example from Polish case law:

“The effect of public faith in land and mortgage registers is an exception to the rule applicable to derivative acquisitions, according to which no one may transfer more rights than they themselves possess. The function of this protection is therefore to protect good-faith purchasers who acquire property under legal transactions carried out with an unauthorised seller listed as the owner in the land and mortgage register contrary to the actual state of affairs. In the absence of this regulation, a contract concluded with a person disclosed in the land and mortgage register as the entitled party, who in fact does not have the right to the property, would be ineffective” (judgment of the Polish Supreme Court of 31 May 2017, ref. no. V CSK 513/16, our translation).

Discrepancies may concern matters other than ownership. They can involve the rights and claims listed below, but their legal effects differ. Public-faith protection should not be assumed to remove every unregistered right, contractual claim or restriction. In particular, the statutory exclusions must be assessed separately.

• easements and other limited rights which in fact encumber the property but are omitted or incorrectly entered in the land and mortgage register,
• mortgages whose existence, priority, scope or creditor details require comparison with the underlying documents and current creditor confirmations,
• restrictions on the disposal of the property, such as administrative decisions, court orders or enforcement proceedings, which are not reflected in the register,
• rights to use common areas or access roads, which in practice may differ from those disclosed in the register,
• preliminary agreements or third-party claims that may affect the free disposal of the property in the future.

When does public-faith protection not apply?

Public-faith protection is subject to important exclusions. Under Article 6, it does not protect gratuitous dispositions or acquisitions by a person acting in bad faith. A buyer is in bad faith if they know that the register does not reflect the actual legal position or could easily have discovered the discrepancy. Article 7 also preserves specified rights regardless of this protection, including rights to lifetime maintenance under a dożywocie agreement and certain easements. Article 8 addresses notices of specified pending proceedings and warnings about discrepancies in the registered legal position.

Whether a buyer could easily have discovered a discrepancy depends on the circumstances of the transaction. Reading the register alone does not always establish good faith. Documents, occupation of the property, information supplied during negotiations and other warning signs may require further enquiries. The assessment concerns what the buyer knew or could easily have learned in the particular case, rather than an automatic rule that every omission constitutes bad faith.

A practical example from Polish case law:

‘The ease of ascertaining a particular state of affairs is not a static category; the legislator leaves the courts a certain degree of discretion in this regard, allowing them to adapt their decisions to the circumstances of a particular case’ (the Polish Supreme Court ruling of 16 July 2020, ref. no. II CSK 16/20).

‘Assessments of whether the buyer could have easily discovered the discrepancy between the content of the land and mortgage register and the actual legal status should be made taking into account an objective measure of diligence, the level of knowledge of legal regulations, the principles of life experience and the presumption of good faith under Article 7 of the Civil Code’ (the Polish Supreme Court judgment of 26 January 2011, ref. no. IV CSK 285/10).

What does a notice of a pending application mean for a property purchase?

A notice of a pending application (wzmianka o wniosku) records that an application has been filed with the land and mortgage register court and has not yet been finally dealt with. It is different from an entry (wpis) recording a right, claim or restriction. The notice does not itself confirm that the right claimed in the application exists. Before proceeding, the buyer should establish what the application concerns, examine the available supporting documents and assess how the outcome could affect the proposed acquisition.

Article 8 of the Polish Act on Land and Mortgage Registers and Mortgages excludes public-faith protection where the register contains a notice of an application, a complaint against a court referendary’s ruling, an appeal or a cassation appeal. It also addresses a warning of a discrepancy between the registered and actual legal positions (ostrzeżenie). A notice of a pending application and a warning entry are therefore distinct concepts, although both can affect the protection available to a buyer.

A notice does not, by itself, impose a general prohibition on selling the property. However, the buyer must not assume that the notice affects only an unrelated right and leaves their acquisition fully protected. The application, its supporting documents, any registered warning and the scope of the proposed transaction must be assessed together. Depending on the findings, the appropriate response may be to obtain further documents, resolve the issue before completion or postpone the purchase.

What information about the property is contained in the Polish land and mortgage register and what should be analysed?

Each land and mortgage register in Poland consists of four sections. Each of them has a separate function and each of them should be analysed before purchasing the property.

Section I-O of the land and mortgage register – property designation

Section I-O of the land and mortgage register serves to precisely identify the property and determine its basic physical and registration characteristics. Although at first glance it may seem purely technical, in practice it is crucial for assessing what exactly is the subject of the transaction. This section discloses, in particular:

• the location of the property, including the locality, street and building number, where recorded,
• designation of the plot or plots, together with the numbers of the cadastral district,
• area of the property, expressed in square metres or hectares,
• use of the property, e.g. land with a residential building, agricultural land, residential premises, non-residential premises.

The analysis of section I-O should include verification of whether the data disclosed in the land and mortgage register is consistent with the content of the sale agreement, surveying documentation and the actual condition of the property.

In practice, the following issues are of particular importance:

• consistency of the stated property area with the sale agreement, an extract from the land and buildings register, cadastral maps and relevant development documents,
• the identity of the property designation, in particular the cadastral parcel numbers (incorrect or outdated designations may lead to the purchase of a property other than the one originally intended),
• the compliance of the use of the property with its actual purpose (e.g. residential premises vs. commercial premises), which may have legal significance at a later stage, e.g. in terms of taxes, the possibility of residence or further rental of the property,
• the existence and status of the premises – in the case of residential premises, it should be determined whether the premises have been formally separated and whether they have a separate land and mortgage register.

On the other hand, identified discrepancies between the content of section I-O of the land and mortgage register and the actual state of affairs or technical documentation may potentially indicate:

• unregulated legal status of the property,
• errors in the land and building register,
• the lack of formal separation of the premises,
• unauthorised changes in the use of the property,

and should always be subject to thorough legal analysis before buying a property in Poland.

Section I-Sp of the land and mortgage register – list of rights related to ownership

Section I-Sp records rights attached to ownership of the property, such as an appurtenant easement or, for a separately owned unit, its share in the common property. It should be distinguished from Section III, which records specified rights, claims and restrictions affecting the property. A separately acquired share in an access-road property may also require examination of that road’s own land and mortgage register.

This section discloses, in particular:

• appurtenant rights relating to access, where recorded in this section, with any separately owned share in a road property checked in the relevant register,
• the share in the common property associated with ownership of a separately owned unit, where applicable,
• land easements attached to the property, such as rights of way, passage or utility connections, which encumber other properties but serve the property being purchased.

Although section I-Sp is often overlooked in a cursory analysis of the land and mortgage register, in practice it can be of significant importance in assessing whether the property can be used for its intended purpose. Failure to disclose certain rights in this section may lead to serious restrictions on the use of the property, even if it is formally free of encumbrances.

For those purchasing land, one of the key issues is determining whether the property has legally guaranteed access to a public road. This access can be provided in various ways:

• directly – when the property borders a public road,
• indirectly – through participation in an internal road,
• through an established right of way.

The absence of an access right in Section I-Sp does not, by itself, establish that the property has no legal access to a public road. Access may follow from direct frontage, ownership or co-ownership of another property, or an easement evidenced by other documents. The legal basis and practical availability of access must be verified, because unresolved access issues can affect the intended use, development and financing of the property.

In the context of Section I-Sp, particular caution should be exercised in the following cases:

• imprecise or laconic descriptions of rights (e.g. without indicating the scope of the easement),
• inconsistencies between the content of section I-Sp and the actual use of the property,
• use of roads or utilities ‘based on custom’, without a formal legal title.

Section II of the land and mortgage register – ownership and perpetual usufruct of real estate

Section II identifies the registered owner or perpetual usufructuary and any registered co-ownership shares. The entries should be checked against the seller’s identity and acquisition documents. They are important evidence of title, but the register alone does not establish that every person signing for the seller has authority or that all consents and other requirements for the transaction have been satisfied.

Section II discloses, in particular, data concerning:

• the owner or co-owners of the property, including an indication of shares in the case of fractional co-ownership,
• the perpetual usufructuary, if the land has been granted for perpetual usufruct, as well as the entity to which the ownership of the buildings is vested,
• the basis for the acquisition of the right by the current owner, e.g. a sale agreement, donation agreement, inheritance, acquisitive prescription or court ruling.

The analysis of Section II should first aim to clearly determine whether the person claiming to be the seller is the person disclosed in the land and mortgage register as the owner or perpetual usufructuary. In practice, particular attention should be paid to the following circumstances:

• seller’s identity – personal or company details disclosed in the land and mortgage register should correspond to the seller’s identity documents or registration documents,
• joint ownership of the property – if the property is jointly owned, in order for the transfer of ownership to be effective, it is generally necessary for all co-owners to participate or for only a share to be sold, which, however, significantly affects the nature and risk of the transaction,
• basis of acquisition, including the acquisition document and any circumstances affecting the validity or effectiveness of the seller’s title,

Any ambiguities, data inconsistencies or complex ownership structures should be treated as a signal for in-depth legal analysis, especially in the case of foreigners, for whom the Polish legal system related to real estate transactions may differ significantly from solutions known in other jurisdictions.

Section III of the land and mortgage register – rights, claims and restrictions

Section III of the land and mortgage register is one of the most problematic and, at the same time, most important sections from the point of view of the security of real estate transactions in Poland. It is here that the rights and claims of third parties and restrictions are disclosed, which, although they do not deprive the owner of legal title, may significantly affect the possibility of using the property or even prevent it.

Section III may disclose, in particular:

• easements, including rights of way, transmission easements and personal easements allowing occupation of a dwelling,
• rights to lifetime maintenance under a dożywocie agreement, which should be distinguished from a personal easement allowing occupation of a dwelling,
• claims arising from preliminary agreements, including claims for the conclusion of a final agreement,
• rental or lease rights disclosed in the land and mortgage register,
• warnings about pending court, administrative or enforcement proceedings.

Entries in Section III very often mean that the property is the subject of a dispute, security for the interests of a third party or a limited property right that will also bind the purchaser after the transfer of ownership. Unlike a mortgage, the financial effects of which can generally be accurately estimated, the effects of entries in Section III are sometimes more difficult to predict and often require in-depth legal analysis.

For foreigners who are unfamiliar with Polish legal realities and court practice, entries in this section are a particularly significant source of risk and cannot be ignored.

Entries that should immediately raise caution and prompt the suspension of a transaction or its thorough analysis include, in particular:

• a warning of a discrepancy between the registered and actual legal positions, which excludes public-faith protection under Article 8,
• a claim for transfer of ownership of real estate, most often resulting from a previously concluded preliminary agreement,
• an entry on the initiation of enforcement proceedings against the property, which may lead to the sale of the property by bailiff auction,
• an entry on the prohibition of sale or encumbrance of the property,
• rights under a dożywocie agreement or a residential easement, whose nature and effect on the buyer’s position require separate assessment,

In practice, an entry in Section III very often means that the transaction should not be carried out without first removing the encumbrances or without precisely regulating the legal situation in the sales agreement. Ignoring entries in this section may lead to:

• the acquisition of property encumbered with third-party rights,
• the inability to use the property for its intended purpose,
• long-lasting and costly court disputes.

For this reason, Section III is the part of the land and mortgage register that requires the utmost caution, especially in the case of foreigners investing in the Polish real estate market.

Section IV of the land and mortgage register – mortgage

Section IV records mortgages securing monetary claims. A mortgage may secure the debt of the owner or of another person. Under Article 65, the creditor can generally seek satisfaction from the mortgaged property regardless of a subsequent change of owner. Buying the property does not, by itself, make the buyer the borrower or personally liable for the seller’s loan, but a mortgage that has not been extinguished may expose the acquired property to enforcement. Its existence does not automatically prevent a sale or registration of the buyer’s ownership.

Section IV discloses, in particular:

• the mortgage amount, which sets the monetary limit of the security and is not necessarily the current outstanding loan balance,
• the currency in which the mortgage amount is expressed, which must be checked together with the loan and repayment documents,
• the details of the mortgage creditor, most often a bank, although it may also be another financial institution or a private entity,
• the basis of the mortgage, for example a contractual mortgage or a compulsory mortgage entered on the basis of documents specified by law,

The entry of a mortgage in Section IV does not automatically prevent the sale of a property in Poland, but it must be taken into account in the transaction process and the sale agreement. The main issues to be considered are:

• documents supporting deletion of the mortgage, including confirmation of the amount required for repayment and the creditor’s undertaking to provide the necessary discharge document once the agreed conditions are met,
• the repayment mechanism, including the amount to be paid directly to the creditor, the payment account, timing and the documents required to establish that the secured debt has been discharged,
• the buyer’s safeguards, such as agreed direct payment to the creditor, retention of part of the price or an appropriately structured notarial deposit, depending on the transaction and the creditor’s requirements,

Unregulated or misinterpreted entries in Section IV may lead to serious consequences for the buyer, including:

• acquisition of property that remains subject to a mortgage, exposing it to enforcement if the secured debt is not discharged,
• failure to obtain effective discharge and deletion of the mortgage, even though ownership may already have been transferred and registered in the buyer’s name,
• disputes with the creditor and enforcement against the property,

For foreigners purchasing real estate in Poland, the entry in Section IV is particularly important, as the procedures for deleting a mortgage can be time-consuming and require strict compliance with Polish civil and banking law.

Summary

The land and mortgage register system in Poland is central to legal due diligence before a property purchase. The review should distinguish registered rights, pending applications, warning entries, cadastral information and the underlying title documents. Public-faith protection can be important, but it is subject to statutory conditions and exclusions and cannot replace an assessment of the specific transaction.

In practice, a professional analysis of the land and mortgage register – combined with an assessment of the administrative requirements for foreigners – allows you to avoid costly mistakes and effectively secure your investment.