Owners of commercial premises in buildings managed by a housing community or housing cooperative in Poland often face problems related to the amount of service charges. The right of ownership of commercial premises is associated with the obligation to pay advance payments for the maintenance of common property and other costs related to its operation.
In practice, we are often approached by both housing communities who want to know when and by how much they can increase fees for owners of premises, and owners of commercial premises who ask whether a given increase in service charges in a housing community was justified and whether it can be effectively defended against. This raises a key question: can a housing community or housing cooperative in Poland freely increase fees for commercial premises, or are there regulations limiting such actions?
In this article, we attempt to present:
- the legal basis in Poland for setting and increasing maintenance fees,
- situations in which a resolution of the community or a decision of the cooperative in Poland may be considered unlawful and situations in which it may be considered justified,
- practical ways for commercial property owners in Poland to defend themselves against unjustified increases.
Legal basis for increasing service charges in a housing community and housing cooperative in Poland
Polish regulations on service charges for commercial premises in Poland differentiate between situations depending on whether the commercial premises are located in a building managed by a housing community or a housing cooperative. It should be remembered that housing communities and housing cooperatives are two separate organisational forms, based on different legal regulations and governed by different rules for setting and increasing fees. It should be noted, however, that as a rule, most commercial premises in Poland are currently located in buildings managed by housing communities, and this is where the largest number of disputes concerning increases in service charges arise.
Increase in service charges for commercial premises in a building managed by a housing cooperative in Poland
The legal basis in Poland in this case is Article 4(1) and (2) of the Act of 15 December 2000 on housing cooperatives (hereinafter: ‘u.s.m.’), according to which cooperative members, property owners and tenants are obliged to participate in the costs associated with the operation and maintenance of the premises and common property by paying appropriate fees, determined on the basis of the provisions of the statutes.
In the case of housing cooperatives, a change in the amount of operating fees is possible after prior notification of the above-mentioned persons 3 months in advance at the end of the calendar month and requires justification in writing, as follows from Article 4(7) of the Housing Cooperatives Act, whereby both the issue of the cooperative’s declaration of intent reaching the addressee (making a proper notification of fee increases, i.e. such that the addressee can familiarise themselves with its content) and the inclusion of a written justification for the increases in the notification determine their effectiveness (as stated by the Supreme Court of Poland in its decision of 17 March 2015, ref. no. I CSK 523/14, LEX no. 3524221).
Pursuant to Article 4(8) of the Polish Act on Housing Cooperatives, members of the cooperative, persons who are not members of the cooperative but who have cooperative ownership rights to premises, and owners who are not members of the cooperative may challenge the legitimacy of changes in fees directly in court. In the event of legal proceedings, they shall pay the fees in the current amount. The burden of proving the legitimacy of the change in the amount of fees rests with the cooperative.
The legislator requires that the fees specified in Article 4(1) and (11) of the Housing Cooperatives Act correspond to the actual costs of operation and maintenance of a specific flat and the costs of operation and maintenance of the property owned by the cooperative. As indicated in the doctrine, a housing cooperative cannot therefore derive financial benefits at the expense of its members, inter alia when determining the amount of maintenance fees due (B. Lanckoroński (ed.), Ustawa o spółdzielniach mieszkaniowych. Komentarz [Act on Housing Cooperatives. Commentary], 7th edition, 2023). In terms of operating fees, this refers to previous case law, which emphasised that, acting in the interests of its members, a housing cooperative has a duty based on those interests to use all available means to limit the debt of its members in respect of operating fees (cf. Supreme Court judgment of 11 June 1971, I CR 168/71, OSNCP 1972, No. 4, item 69).
In summary, a housing cooperative may increase service charges only within the limits of the actual costs of maintaining the premises and common property. In practice, this means that any increase in charges in a housing cooperative should be transparent, duly justified and defensible in the light of the cooperative’s financial documents.
Increase in service charges for commercial premises in a building managed by a housing community in Poland
Service charges for commercial premises located in housing communities may be increased on the basis of the Act of 24 June 1994 on the ownership of premises in Poland (hereinafter: ‘u.w.l.’). Pursuant to Article 12(2) of the Act on Ownership of Premises, the owners of premises bear the expenses and burdens related to the maintenance of the common property, which means that this includes both public law charges (e.g. taxes) and civil law charges (e.g. fees for the maintenance of common areas) (I. Szymczak, 2. Scope of participation of the owner of a flat in the costs of maintaining common property [in:] Housing community, Warsaw 2014). In Poland, the general rule resulting from the cited provision of the Act on Common Property is therefore that flat owners bear fees in an amount depending on the ratio of their shares in the commercial premises to all existing shares.
However, the legislator has provided for an exception to this rule in Article 12(3) of the Act on Ownership of Premises , which stipulates that a resolution of the owners of premises in a housing community may increase the fees for the maintenance of common property borne by the owners of commercial premises if this is justified by the manner in which these premises are used. Accordingly, in the light of the Act on Ownership of Premises , it is therefore possible to impose higher maintenance fees on owners of commercial premises, but only if this is justified by the ‘manner in which these premises are used’, which in practice occurs when the use of commercial premises leads to an increase in the costs of maintaining the common property.
As indicated in the Polish legal literature (I. Szymczak, Zakres …, cit.), a resolution of the housing community concerning an increase in service charges for owners of commercial premises cannot be discretionary. This means that the community cannot freely determine the amount of the fees, but should take into account the actual impact of the use of the commercial premises on the increase in the maintenance costs of the common property. Importantly, it is the housing community that has the obligation to demonstrate that the increased management costs are directly related to the manner in which the commercial premises owner and their customers use the common areas.
Examples of situations in which increased costs and a justified increase in fees for commercial premises in Poland may occur:
- frequent use of common entrance doors, gates or lifts by customers of the business operating in the commercial premises, resulting in faster wear and tear of locks, intercoms or opening mechanisms,
- increased use of common areas, e.g. corridors or staircases, resulting from high traffic,
- higher cleaning and maintenance costs in common areas if the activity of the premises generates increased dirt (e.g. catering outlet, grocery store),
- increased utility costs related to common areas, e.g. higher electricity consumption in the lift or for corridor lighting.
- increased costs of maintenance and repair of common equipment, such as air conditioning, ventilation or monitoring systems, caused by a higher load resulting from the business activity,
- more frequent use of common areas such as driveways, pavements or parking spaces in connection with serving the premises’ customers,
- the need to increase expenditure on fire safety, security or monitoring if the commercial premises’ activities involve greater risk,
- higher water and sewage consumption in common areas (e.g. in buildings with public toilets or kitchens for commercial tenants),
However, when adopting a resolution to increase fees, the housing community in Poland must always remember not to infringe on the interests of the owner of the commercial premises affected by the increases when increasing service charges.
What constitutes an infringement of the interests of the owner of commercial premises in Poland?
The concept of ‘violation of the interests of the owner of the premises’ is not defined in the Polish Act on Ownership of Premises and is an open-ended concept. This means that there is no catalogue of actions or types of violations which, if they occur, will automatically lead to a finding that the interests of the owner of the premises have been violated. In general, it can be considered that the interests of the owner of premises in a housing community in Poland are infringed when the housing community takes such action (by virtue of a resolution) that leads to an unjustified deterioration of the situation of the owner of the premises or restricts their right to use the premises, or even applies solutions that are contrary to the principles of social coexistence and the law.
There are a number of examples in Polish case law showing that a violation of the interests of a commercial property owner in a housing community manifests itself, among other things, in the community imposing a disproportionate increase in fees, unrelated to the actual impact of the use of such premises on the increase in the maintenance costs of the common property. In practice, this may mean, for example, arbitrarily increasing advance payments for the maintenance of common areas without justification in the community’s financial documents, charging costs that are excessive or inadequate in relation to the actual burden, and introducing additional fees for activities that do not generate actual expenses. Such actions will, in principle, be contrary to the principle of proportionality according to Polish law and may violate the rights of the owner of the commercial premises.
A practical example from case law in Poland:
“Article 12(3) of the Act on the Ownership of Premises, which allows for a derogation from the principle of equal charges for owners of premises (related to the share of those premises in the co-ownership of common property), should be interpreted in such a way that an increase in the burdens (advance payments) of commercial premises owners for the costs of managing the common property must be justified by higher costs of maintaining the common property, related to the manner of use of these commercial premises, and must be proportionate to these higher costs of managing the common property. It is not permissible to increase the charges for owners of commercial premises without a connection between the use of these premises and the increase in the costs of maintaining the common property, as this would be an unreasonable charge” (judgment of the Court of Appeal in Warsaw of 12 August 2015, ref. no. I ACa 2019/14).
“The costs of maintaining the common property, both the part physically located on the fourth floor of the building and on the other floors, must be borne in accordance with the above-mentioned principle, expressed in Article 12(1) of the Act on the Ownership of Premises, and the method of heating the residential premises themselves cannot affect its modification. Meanwhile, the contested resolution No. (…) introduces such an unjustified differentiation in the burden on individual owners of premises depending on the floor on which their premises are located. Therefore, as it is contrary to the aforementioned provision and grossly violates the principle of equal treatment of all owners of premises in a given community, it has been rightly eliminated from legal circulation by its repeal.” (judgment of the Court of Appeal in Lublin of 16 February 2021, ref. no. I ACa 906/19).
Can a housing community increase fees for only one commercial premises in Poland?
The provisions of the Act on Ownership of Premises do not specify whether a community resolution to increase service charges adopted on the basis of Article 12(3) of the Act on Ownership of Premises may apply to individual commercial premises or must apply to all of them. As indicated in case law, ‘a housing community has the freedom to determine the extent of the increase in charges for owners of commercial premises’ (as stated by the Court of Appeal in Warsaw in its judgment of 8 December 2016, ref. no. VI ACa 1315/15), so it can be assumed that this freedom also includes deciding which commercial premises in the building will be subject to higher fees.
Of course, it should be emphasised that this freedom cannot be exceeded and must remain closely linked to the burden of proof on the part of the community that the activity carried out in a specific commercial premises leads to an increase in the costs of maintaining the common property.
In practice, a situation may arise where there are a number of commercial premises in a housing community, but only one of them generates higher costs than the others. For example, this will be the case when some of the commercial premises are located on the ground floor of the building and one is on the first floor, and frequent use of the lift by its customers leads to increased electricity bills, repair costs and technical inspections. It seems that in such a case, the housing community will have the right to increase the fees for this premises.
By how much can a housing community increase fees for commercial premises in Poland?
Of course, it is impossible to specify a specific amount or percentage by which a housing community can increase fees for commercial premises in Poland. The regulations and case law do not specify fixed rates, only general guidelines and principles that should be taken into account when determining the amount of fees.
As a rule, the scope of the increase in fees for premises in a housing community cannot be arbitrary, but should be proportional to the actual increase in the costs of maintaining the common property. The increase must therefore correspond to the actual, documented costs of maintaining the common parts and common property. On the other hand, it cannot be arbitrary or lead to a disproportionate burden on the owners of commercial premises. Of course, the owner of the premises has the right to challenge any unreasonable or arbitrary decisions, as discussed later in this publication.
A practical example from case law in Poland:
“The community has the option of increasing, by way of a resolution, the burden on commercial property owners for the costs of maintaining common property if this is justified by the manner in which the premises are used. However, before adopting such a resolution, the community (or rather its initiator, the management board) should determine whether and to what extent the manner of use of the commercial premises results in increased costs of maintaining the common property and present a reliable calculation allowing an assessment of whether the level of the increase is substantively justified. Increasing the burden on one owner in relation to the rest is an exception to the rule and, as such, must be proportionally reflected in the level of costs it generates. The condition for the legality of such a regulation is to demonstrate a close link between the increase in the costs and the manner in which the premises are used. The next necessary step is to calculate these costs in a way that allows for an assessment of whether the proportion corresponding to the level of increased expenses has been maintained. The lack of a reliable calculation or its arbitrariness leads to the unverifiability of such a resolution”. (judgment of the Polish Court of Appeal in Białystok – 1st Civil Division, of 23 March 2018, ref. no. I ACa 959/17).
“The provision contained in Article 12(2) and (3) of the Act does not therefore allow for an increase in the burden on owners of commercial premises if the manner in which these premises are used does not increase the costs of maintaining the common property” (judgment of the Polish Court of Appeal in Warsaw, 1st Civil Division, of 21 November 2012).
How to effectively defend yourself against an unjustified increase in service charges by the housing community in a commercial premises in Poland?
If you believe that, as the owner of commercial premises, you have been unfairly charged higher service charges, you may bring an action under Article 25(1) and (1a) of the Act on Ownership of Premises . Under these provisions, the owner of the premises has six weeks from the date of the resolution being passed at a general meeting of owners or from the date of notification of the resolution being passed by individual voting to challenge the resolution if it:
- is inconsistent with the provisions of law or the owners’ agreement,
- violates the principles of proper management of common property, or
- violates the interests of the owner of the premises in any other way.
Article 25(2) of the Polish Act on Ownership of Premises provides that the contested resolution is enforceable unless the court suspends its enforcement until the case is concluded. This mechanism makes it possible to bring an action together with a request to secure the claim by suspending the enforcement of the housing community’s resolution. In order for the court to secure the claim, it is necessary to:
- substantiate it, i.e. present evidence to prove the validity of the claim, and
- demonstrate the claimant’s legal interest in obtaining security. This mainly involves demonstrating that the lack of security may lead to irreversible consequences
Granting a request to secure a claim by suspending the enforcement of a housing community resolution means that the application of the resolution is suspended until a final decision is made in the case, and therefore the owner of the premises will not be forced to pay the increased service charge until the case is heard.
Practical example – increase in fees for only one commercial premises in Poland
Company X owns commercial premises located in a building in Poland that is managed by a community and rents them to a person running a small local shop. In addition to the premises belonging to company X, there are four other commercial premises in the building, which house a beauty salon, a bar, a tattoo studio and a sales point for a popular mobile phone network. Some members of the community, namely the owners of residential premises, are dissatisfied with the business conducted in the premises belonging to Company X (due to its long opening hours) and decide to pass a resolution increasing the service charges several times over, but only for Company X’s premises. The owners justify their decision with the high costs of cleaning the building’s façade on the side of the commercial premises (e.g. due to graffiti) and the need to incur additional costs for cleaning broken bottles on the pavement in front of the building.
Two weeks after receiving information about the fee increase, Mr X filed a lawsuit to repeal the resolution pursuant to Article 25(1) of the Act on Ownership of Premises on the grounds that it was unreasonable and disproportionate to burden him with the costs of maintaining the common parts of the property, together with a request to secure the claim by suspending the implementation of the resolution due to the potential termination of the lease agreement by the person running a business in Mr X’s premises and the loss of his only source of income.
The court suspended the execution of the resolution for the duration of the court proceedings. In practice, this means that company X does not have to pay the increased service charges until the case is finally decided. This has protected it from the financial consequences and the risk of losing a tenant, which could have occurred if it had been necessary to comply with the resolution immediately.
This example shows that a commercial property owner who considers an increase in service charges in a housing community to be unjustified or disproportionate has real legal tools to defend their interests, including the possibility of challenging the community’s resolution and filing a motion to secure their claim.
Summary – when is an increase in service charges lawful in Poland?
Pursuant to Article 12(3) of the Act on Ownership of Premises, a housing community has the right to increase the fees charged to owners of commercial premises on account of their contribution to the increase in the costs of maintaining the common property resulting from the manner in which they use their commercial premises. However, it should be remembered that a housing community does not have complete freedom and discretion in determining both the amount of the fees and the group of owners covered by them, and any change must be commensurate with the actual impact of the activity carried out in the commercial premises on the costs incurred.
In the event of an unjustified increase in fees, the owner of the commercial premises may pursue their claims by bringing an action – it is best to do so with the help of experienced solicitors who are familiar with the specifics of the functioning of housing communities and the related legal regulations.
What can a housing community do to reduce the risk of a successful challenge to a resolution on an increase in service charges?
In order to reduce the risk of a successful challenge to a resolution on an increase in service charges by a premises owner, the housing community should first and foremost ensure that the decision-making procedure is conducted correctly. It seems that it will be crucial to properly convene a meeting of owners and provide them with access to all necessary financial documents related to the resolution on the increase.
Furthermore, each resolution of the housing community on the increase in fees should be properly justified. It is also important to treat all owners equally and avoid situations where some of them bear unreasonable financial burdens. In addition, the community should act in accordance with the Act on Ownership of Premises and its own statutes, as violation of formal provisions is one of the most common grounds for courts to repeal resolutions.
Does the filing of a lawsuit by a flat owner automatically suspend the implementation of a housing community resolution on fee increases?
No. The resolution remains in force until its implementation is suspended by the court. The community may continue to collect fees in accordance with the adopted resolution. It therefore seems that, as a rule, every lawsuit should include a request to secure the claim by suspending the implementation of the resolution.
How can a housing community defend a resolution to increase fees for commercial premises in court?
First of all, by preparing complete documentation justifying the increase. The court takes into account whether the resolution was reasonable and in accordance with the principles of proper management, therefore documenting the actual grounds for the increase (e.g. higher utility consumption by the commercial premises, greater burden on the common areas) is of key importance.
Can a housing community (housing community management board) delegate the preparation of a resolution to a representative or an external company?
Yes, the management board may use the assistance of professionals in preparing calculations and justifications. However, the responsibility for the accuracy of the resolution still rests with the management board, which is why supervision of the process is crucial.
How can you verify that a housing community resolution is lawful?
Resolutions should comply with the Act on Ownership of Premises, the community agreement and the principles of proper property management. In practice, this means that a community resolution can only be effective if it does not violate the law, is consistent with the community agreement, is not arbitrary or unjustified, and was adopted at a community meeting, with the required quorum and voting procedures.
Can a housing community resolution on fee increases be adopted in any manner?
No. The resolution must comply with the Act on the Ownership of Premises, the community agreement and the principles of proper property management. This means that it must not violate the law or the rights of owners, must be adopted in accordance with the meeting procedures and must concern the interests of the community.
