In Poland the developer’s delay in transferring ownership of the premises in relation to the deadline specified in the development agreement is a frequent cause of disputes between buyers of premises and developers. This situation occurs when the developer undertakes in the development agreement entered into under Polish law to transfer ownership of the premises on a specific date, but fulfills this obligation with a delay. Our practice shows that Polish developers’ delays generally amount to several months, but there are situations where delays can even amount to many years.
One of the key aspects of such cases is the issue of the Polish developer’s liability for the delay in transferring ownership of the property. In an attempt to justify the delay in the completion of the investment, the developer very often presents the situation to the buyers of the premises in such a way that it is not responsible for the delay, because the delay was allegedly caused by the fault of the Polish utility provider (or providers), who failed to complete the connections on time. In other words, the developer delayed the completion of the investment and the transfer of ownership of the premises because the utility provider was late, and the developer is allegedly not responsible for the actions and omissions of the utility provider.
However, is the developers’ argument presented above definitely correct, and consequently, are the buyers of the premises not entitled to compensation claims?
The purpose of this publication is to answer this question based on applicable Polish regulations, Polish case law, and our many years of legal practice in conducting this type of court proceedings against developers in Poland.
Contractual penalty in a development agreement in Poland as a defense mechanism for the buyer of the premises in the event of a delay on the part of the developer
Before answering the above question, it is necessary to briefly describe the institution of contractual penalties in a development agreement under Polish law.
Pursuant to Article 35(1)(14) of the Polish Development Act, a development agreement shall specify, in particular, the amount of interest and contractual penalties for the parties to the development agreement, if the parties have so provided. The Polish Development Act clearly indicates the mechanism of contractual penalties in a development agreement as a legal institution that compensates the buyer for the improper performance of the developer’s main obligation, i.e., the transfer of ownership of the premises within the time limit specified in the development agreement.
A practical example from Polish case law:
“The contractual penalty constitutes compensation for the buyer at least for the untimely transfer of ownership of the property” (Supreme Court judgment of August 10, 2017, file ref. no. I CSK 10/17).
The contractual penalty for the developer’s delay is usually an amount equal to a specified percentage of the price of the apartment for each day of delay in the transfer of ownership. For example:
- price of the apartment: PLN 1,000,000,
- contractual penalty in the development agreement: 0.02% of the price for each day of delay,
- number of days of delay in the transfer of ownership: 250 days.
In the example described, the contractual penalty for the developer’s delay payable to the buyer of the apartment from the developer will therefore amount to PLN 50,000.
The buyer’s right to compensation in the event of a delay by the developer – even without a contractual penalty clause in the development agreement
However, pursuant to Article 39(2) of the Polish Development Act, if the development agreement does not provide for a contractual penalty or interest, the developer is obliged to pay the buyer compensation for non-performance or improper performance of the agreement in an amount corresponding to the statutory interest due to the developer for the buyer’s delay in fulfilling the monetary obligation under the development agreement.
The above regulations are intended to protect the interests of the buyer of the premises. Consequently, even if the parties did not expressly provide for a contractual penalty or interest for delay on the part of the developer in the development agreement (and in practice, the developer did not agree to include it), the buyer is not completely deprived of protection. In such a case, the provision of Article 39(2) of the Polish Development Act applies, which introduces a specific statutory sanction, i.e., the Polish developer’s obligation to pay compensation corresponding to the amount of statutory interest due to the developer in the event of the buyer’s delay in making a cash payment.
In other words, under the new Polish Development Act, there is no situation in which the developer can completely evade liability for untimely transfer of ownership of the premises and the buyer will not be entitled to compensation. Even if no contractual penalty or interest is expressly stipulated in the contract with Polish developer, the buyer has the right to claim compensation, which, in our experience, often amounts to several thousand or even tens of thousands of zlotys. In some of the cases we have handled, the Polish developer’s delay was so significant that the contractual penalty for the delay enforced in favor of the buyers amounted to over PLN 100,000.
What is more, the parties cannot “agree” to completely exclude contractual penalties from the development contract. In practice, this means that the developer cannot unilaterally impose such a solution on customers in the development contract. It is difficult to imagine a scenario in which the buyer of a property would voluntarily be interested in releasing the developer from liability in the event of a delay in the transfer of ownership of their property.
According to Polish case law regarding developers, a provision that excludes the possibility of claiming contractual penalties from the developer constitutes an abusive clause and is therefore not binding on the buyer of the premises. This interpretation stems from the fact that the developer, as a professional participant in economic transactions, is inherently in a stronger position than the buyer of the premises. The exclusion of liability for contractual penalties for both parties appears to create a balance, but in reality, it is primarily the developer who benefits. Cases of the buyer failing to accept the premises are very rare, while delays on the part of the developer occur much more frequently and, in the case of some developers in Poland, constitute a kind of “market standard.”
A practical example from Polish case law:
“A clause excluding contractual penalties in a development contract is not permitted” (Supreme Court judgment of August 10, 2017, file ref. I CSK 10/17).
When is the Polish developer liable for a delay?
Pursuant to Article 471 of the Polish Civil Code, the debtor (in this case, the developer) is obliged to repair the damage resulting from non-performance or improper performance of the obligation, unless it proves that the breach of obligations occurred for reasons beyond its control. This provision therefore establishes a presumption of fault on the part of the debtor (developer), which means that if the developer wishes to be released from liability, it is incumbent upon them to prove that the delay was due to force majeure, the actions of third parties, or other circumstances for which they are not responsible.
In practice, this means that if the developer is late in transferring ownership of the premises, the purchaser of the premises is entitled to claim contractual penalties. The mere fact of the developer’s delay “triggers” the presumption of fault on the part of the developer and may determine its contractual liability towards the purchasers. In a possible court case, it is therefore the developer’s responsibility to prove that the delay occurred through no fault of their own. If they fail to prove this (and in many cases this may be impossible), the contractual penalty for the delay is payable to the buyers of the premises.
A practical example from Polish case law:
“The debtor may be released from the obligation to pay a contractual penalty if he refutes the presumption under Article 471 of the Civil Code that the delay in performance is a consequence of circumstances for which he is responsible” (Supreme Court judgment of October 6, 2010, file ref. II CSK 180/10).
In situations where a developer attempts to release itself from liability, our experience shows that it very often adopts a line of defense consisting of attempting to demonstrate that the delay was caused by problems with connecting utilities, for which separate entities, i.e., utility providers, are responsible, and not the developer.
Delay by the developer in connecting utilities and the professional nature of the developer’s activity in Poland
It is obvious that the developer is obliged to provide the utility connections necessary for the proper use and full functionality of a residential premises or single-family house. These obligations arise both from the provisions of the construction law and from the provisions of the development agreement itself.
At the same time, the developer should plan the investment taking into account the business risks known to them, which also includes the risks associated with possible delays in the completion of connections by utility providers.
In Polish case law, in such situations, the professional nature of the developer’s business is emphasized, which means that the developer is subject to stricter standards of due diligence, as specified in Article 355 § 2 of the Polish Civil Code. According to this provision, the debtor’s due diligence in the conduct of its business activities is determined taking into account the professional nature of those activities.
Due diligence should be understood as conduct consistent with the standard of reliability accepted in professional transactions. This includes, among other things, cautious, prudent, preventive, and thoughtful conduct, as indicated in legal literature (commentary on the Civil Code edited by E. Gniewek). The concept of due diligence in professional relations (both unilateral and bilateral) is based on the assumption that economic activity is conducted on a continuous basis and requires specific knowledge and competence. Therefore, the environment – including buyers of premises – has increased expectations of the developer in terms of reliability, accuracy, and foresight of the consequences of their own actions (or omissions).
As an entity conducting business activity, a developer should demonstrate a particular ability to anticipate investment risks and manage them appropriately, including ensuring connections to the investment in a timely manner. In practice, this means that a developer bears a greater risk of investment failure than an ordinary individual.
Furthermore, in accordance with the Polish Development Act and the provisions of the Polish Civil Code, the developer is obliged to loyally inform the consumer about all circumstances affecting the implementation of the investment. Concealing such information may be considered not only contrary to good practice (Article 385¹ of the Polish Civil Code), but also grounds for awarding the buyer contractual penalties for delay.
The developer’s lack of experience cannot justify the developer’s negligence
It is worth adding that in the context of the above-mentioned legal regulation, the developer’s lack of experience does not exempt him from liability for the delay in connecting the investment on time. As confirmed, for example, by the judgment of the District Court for Warsaw Praga-Północ in Warsaw of June 9, 2025 (file ref. VII C 1115/24), which ended with a favorable ruling for our law firm, “the fact that the defendant was an inexperienced developer does not diminish its guilt.” The duty of due diligence refers to an objective professional standard, not the subjective capabilities and skills of a particular developer.
Under the current legal framework, against the backdrop of the so-called “new development act” (i.e. the Polish Act of May 20, 2021 on the protection of the rights of buyers of residential premises or single-family houses and the Developer Guarantee Fund), it is assumed that there is no obligation to stipulate a contractual penalty in favor of the buyer in the development agreement. However, if the agreement provides for interest for late payment of individual installments by buyers to the developer, the parties should also include a provision on a contractual penalty reserved for the buyer. In practice, this is almost always the case in Poland, as developers usually take care to guarantee themselves interest for any delay in payment on the part of the buyer of the premises.
The developer was aware of the risk of delays in connecting utilities, yet entered into a contract with the buyer setting an unrealistic deadline for the transfer of ownership of the premises.
The developer is obliged to plan the residential investment, then carry out its implementation and prepare contracts in such a way as to minimize the risk that the timely performance of its obligations will depend on the actions of other entities. Otherwise, it is liable for any delays and their legal consequences.
Consequently, if a Polish developer, being aware of the difficulties and risks of delays in obtaining connections to the investment, nevertheless undertakes in the development agreement to meet unrealistic deadlines, it bears full responsibility towards the buyer of the premises for failing to meet those deadlines. The developer cannot evade responsibility by referring to external factors that were foreseeable. In such a situation, we are dealing with a failure to exercise due diligence, assessed according to the objective standard of a professional operating in the real estate market, as mentioned above.
What is more, our experience shows that Polish developers not only fail to reliably inform buyers about existing problems with utility providers, but also do not propose annexes to contracts that would include a realistic schedule for the completion of the investment. It can be assumed that this is probably due to the fear of losing customer trust and the desire to avoid renegotiating the terms of the contract.
For example, in one of the cases we won, the developer was informed by the distribution system operator about significant difficulties with the construction of an electrical connection 1.5 years before the conclusion of the development contract. Despite this knowledge, the development contract specified a date for obtaining the occupancy permit, which, in light of the information available, was impossible to meet. What is more, the developer did not take any action to amend the contract, in particular, it did not propose an annex postponing the date of transfer of ownership. The developer deliberately concealed important information about the difficulties with the implementation of the investment from the buyers of the premises, hoping that he would be able to justify the delay at a later date or shift the responsibility to other entities. The developer probably also hoped that the buyers of the premises would not file claims against the developer.
Consequently, in the circumstances described, it had to be concluded that the developer was liable for the delay and was obliged to pay a contractual penalty to the buyers, because:
- it was aware of the problems with the timely completion of the connections (it was informed about them by the utility providers before the conclusion of the development agreements),
- it did not inform the buyers about these difficulties or, as can even be presumed, misled them as to the actual status of the investment in the content of the development agreement,
- it committed to unrealistic deadlines for the completion of the investment and transfer of ownership of the premises,
- it did not provide for appropriate safeguards in the agreement, e.g., exclusion of liability for delays caused by independent entities performing the connections,
- it did not conclude an annex changing the date of transfer of ownership.
As a result, the developer in Poland bears full responsibility for the delay in transferring ownership of the premises, and the buyers were awarded contractual penalties in full – in accordance with the provisions of the development agreement, even though the developer tried (unsuccessfully) to shift the blame onto external entities.
A practical example from Polish case law:
“In this case, there were no grounds for the assumptions made by the defendant and assured to the plaintiffs that the premises would be handed over and their ownership transferred within the time limits specified in the agreement, or even before their expiry. Also significant here is the very short period of time for the completion of the entire development project, consisting of several dozen premises and a dozen or so buildings, where a period of less than two years was assumed for its completion. The defendant was aware, already at the stage of issuing the connection conditions, that both networks to which the connection was to be made (sewerage and power) were at the planning and design stage and, moreover, their construction had not even begun yet. (…) In summary, it was possible to present clear investment conditions to its customers, which the defendant obviously failed to do. The plaintiffs, like other customers, paid the full sale price without receiving any valuable consideration, but above all, without receiving the consideration on time. (Judgment of the District Court for Wrocław Śródmieście in Wrocław of December 5, 2013, file ref. no. IX C 316/13).
Situations in which a developer can effectively free itself from liability for delay in transferring ownership
The only case in which a developer can effectively avoid liability for delay is when, acting with due diligence, it had no objective possibility of foreseeing the circumstances causing the delay. In such exceptional circumstances, beyond the developer’s control and impossible to foresee with due diligence, liability for damages (including the obligation to pay a contractual penalty) may be excluded. However, in practice, such cases are rare and require clear evidence of no fault on the part of the developer. In our experience, these situations account for 5-10% of cases in which delays have occurred.
Moreover, developers have serious difficulties in proving, in court proceedings, that the delay was caused by reasons beyond their control and was impossible to foresee with due diligence. This is because they often do not have the relevant documentation confirming their timely response to problems, there is no correspondence with utility providers or minutes of meetings with contractors, which significantly hinders the effective defense of their position in court. As a result, it seems that buyers of premises should not be afraid to pursue their claims, as in many cases these claims are clearly justified.
Summary
In Poland a developer cannot invoke delays on the part of external entities if it was aware of the risks to the timely completion of the investment at the stage of concluding the development agreement and nevertheless committed to unrealistic deadlines. In such cases, its contractual liability remains valid and the buyers of the premises are entitled to claim contractual penalties.
Our experience shows that in most cases of this type, the remedies sought by buyers are recoverable, and Polish courts tend to favor arguments based on a breach of the developer’s duty of care.
Therefore, we recommend issuing a payment request and, if there is no response, referring the case to court.
What to do if the developer is late in transferring ownership of the apartment?
If the developer fails to meet the deadline for transferring ownership of an apartment or house, the buyer should first attempt an amicable resolution. Most often, this involves sending the developer a written demand for payment of contractual penalties or compensation. In practice, such a demand alone often produces the desired effect, as developers—wanting to avoid litigation—tend to agree to pay the amounts due.
However, if the demand proves ineffective, the next step is to pursue the matter in court. The buyer may then claim contractual penalties, compensation, and in some cases also interest for the delay. It is also worth reviewing the development agreement to check whether it provides for additional mechanisms protecting the buyer’s interests.
Can a developer exclude their liability in a development agreement (or any other document)?
No, they cannot. Any provisions excluding contractual penalties or compensation for the buyer are considered so-called abusive clauses, which are not binding on the consumer (the buyer of the property). In the event of a delay, the buyer always retains the right to pursue claims for late transfer of ownership, even if the developer claims otherwise.
That said, one should be cautious about waiver clauses, which developers often include in transfer of ownership agreements. Their purpose is usually to deprive the buyer of potential claims. In such cases, it is best to consult a law firm before signing.
What evidence is needed to successfully claim a contractual penalty from the developer?
The most important pieces of evidence in such a case are: the development agreement, the transfer of ownership agreement, and correspondence with the developer. Of course, witness testimony can also be very helpful, particularly from other buyers of units in the same development.
What are the chances of obtaining compensation from the developer in the event of a delay?
From our litigation practice, the chances of obtaining compensation or a contractual penalty from a developer in the event of a delay are very high. In the vast majority of cases—around 95%—developers are unable to demonstrate that the delay was caused by circumstances beyond their control. This means that the developer’s liability for failing to transfer ownership on time is real and enforceable.
Therefore, in our view, it is not worth giving up on pursuing such claims. Very often, simply sending a proper demand for payment leads to an amicable settlement of the dispute.
Do problems with contractors or changes in the prices of construction materials release the developer from liability?
No. The developer is responsible to the buyer for the timely transfer of ownership of the property, regardless of whether they use subcontractors or carry out the investment themselves. Potential problems with contractors, delays in the delivery of construction materials, or increases in material costs do not constitute so-called force majeure and do not release the developer from liability. Of course, in many court cases, developers argue that such circumstances exempt them from responsibility, but courts consistently reject this view.
In practice, this means that the buyer has full rights to demand payment of contractual penalties, compensation, or interest for the delay, even if the developer cites organizational or market problems. The risk associated with choosing contractors and the availability of materials always rests with the developer, never with the buyer.
Does signing the property handover protocol mean waiving claims for delay?
No, these are two separate issues. Signing the property handover protocol primarily concerns the technical condition of the property, not matters related to the timeliness (or lack thereof) of the transfer of ownership. The mere fact of signing the protocol does not deprive the buyer of the right to pursue claims for delay.
In practice, however, developers sometimes try to rely on the handover protocol as “confirmation” that the buyer has no objections. Of course, such a position has no support in the law or case law and is incorrect.
Therefore, the buyer can sign the handover protocol and still pursue their rights against the developer for the untimely transfer of ownership.
