On the market, there are more and more offers for investment in Condohotels in Poland. Usually it applies to tourist apartments in polish seaside resorts, polish big cities, polish mountain resorts. At first sight, an investment in an attractive property seems very beneficial. However, as just like every investment, common sense and caution are also advisable here.

At first, it should be note who offers such investment and check the company out. Then it is important to investigate the legality of the investment and its stage, especially whether the party to the contract actually run a business and owns the property and then will become its administrator.

 Often, from the very beginning, the construction of a hotel is financed from investors' money and there may be a problem when the financing ends at some point. For that reason it should be considered, that the earlier stage of investment, the bigger risk that investment will be not finalized.

 It should be pointed out that the sold apartments are non-residential, and therefore, property buyers are not protected by the provisions of the Act on the protection of the purchaser of dwelling premises or a detached house. Thus, for example, the paid funds are not subject to special protection. The following contracts are most often concluded by way: preliminary contract, developer contract, lease contract with a guaranteed profit at a fixed level, a lease contract without a guaranteed profit (profit depending on the amount of income earned and without the upper limit). It’s also worth knowing in advance how high the costs of the management are and the rules of participating in it. Cause unprofitability of the hotel is another risk burdening the investor.

It is also worth guaranteeing the real possibility of using apartment and checking how it is used when we are not there. Is it possible, that the calculation supposing, that the apartment is rented whole the time is real to be achieved? What if the seller or property manager declares bankruptcy? Will it be possible to rent an apartment on your own?

 If you are interested in the investment, then it is worth comparing the contracts offered by various developers in order to take advantage of the best option.

The Law Office helps in analyzing contracts and checking investment documents.

Ewa Kosowska-Czapla

Attorney at law

In the practice of the Law Firm it happens that contractors from different countries cooperate with each other for many years even without a contract. In the event of a conflict, it may happen that one of them will transfer its claim to another entity.

Such a transfer of claims may be very unfavourable to the other party, as it will significantly reduce the possibility of set-off of mutual claims.

According to Article 14(2) of the Regulation on the law applicable to contractual obligations (Rome I), the law to which the assigned claim is subject shall govern its transferability, the relationship between the purchaser of the claim and the debtor, the conditions for the effectiveness of the assignment and the liberating effect of the debtor's performance. Therefore, if the law to which the sold claim is subject is Polish law, in this situation the transfer is regulated by the Polish Civil Code.

According to art. 509 § 1 of the Polish Civil Code, a creditor may transfer a claim to a third person (transfer) without the debtor's permission, unless this would be contrary to the law, a contractual reservation or the nature of the obligation. Thus, the consent of the debtor will not be required for the assignment of the claim. The debtor may find himself in a situation where the claim will be asserted by a completely different entity, not even known to him.

At the same time, the provision indicates that the contract may state otherwise. Thus, only the agreement will protect the debtor against the uncontrolled transfer of the debt to another person.

As I wrote in the introduction, many contractors cooperate with each other without a contract, so the lack of an agreement in this respect is very unfavourable for the debtor.

The solution is unfavourable not only because the debt may be bought out by, for example, a debt collection company. Making a transfer also blocks to some extent the possibility of settling one's own claims, e.g. by way of set-off.

Ewa Kosowska-Czapla

Attorney-at-law/ Restructuring adviser

In the case of international contracts for the sale of goods regulated by the Convention on Contracts for the International Sale of Goods (CISG Convention), the contracting parties may, in certain cases, withhold their obligations.

The general principle of simultaneous and equivalent performance in sales contracts is legally established. The purpose of these rules is to ensure that the parties receive a consideration of equal value to that offered. However, for example, sometimes the principle of simultaneity is not or cannot be applied e.g. in the case of deferred payment sales. Therefore, the law moves forward in situations where a party to the contract has real fears of a real threat to the fulfillment of the contract by the other party. Such fear will be evaluated by the court in a possible trial and should be regarded as justified by the circumstances of the case, assuming a reasonable person's pattern of conduct.

According to Article 71 of the CIS Convention, a party may suspend the fulfilment of its obligations if, after the signing of the contract, it turns out that the other party has failed to fulfil a significant part of its obligations because of this:

• a serious lack of capacity or solvency of that party, or
• its behaviour during the preparation for performance or during performance of the contract.

If the seller has shipped the goods before the reasons described in the preceding paragraph become known, the seller may oppose the delivery of the goods to the buyer, even if the buyer has a document authorising him to receive them. This paragraph applies only to rights to goods in the relationship between the buyer and the seller.

The withholding party shall immediately, before or after shipment of the goods, notify the other party of the suspension of performance and shall continue fulfillment if the other party provides adequate safeguards for the proper fulfillment of its obligations.

In the light of the content of this provision, it is worth noting the following points.

First of all, abstention is allowed when, after the signing of the contract, there is a fear of non-fulfilment of the contract. This means that the circumstances giving rise to concern must arise after the conclusion of the contract or be unknown to the other contracting party at the time of the conclusion of the contract.

Secondly, the threat of breach of contract must relate to a “significant part of the obligations”. In this case, we will apply a quantitative and qualitative proportion. It will also be important which obligations were most important for the parties.

The fear of non-fulfilment must be linked to the events specified in the Convention:

• serious inability to fulfil, e.g. due to strike, armed conflict,
• lack of solvency, e.g. long-term lack of liquidity resulting in non-payment; lack of solvency may affect both the buyer and the seller,
• the other party's wrongful behaviour.

The necessity of proving the existence of conditions enabling the exercise of the right of withholding lies with the entity which made use of the right of withholding.

In the case of an entitled party withholding the performance, the other party is obliged to secure it. The deadline for performance of the obligation is postponed until the security is deposited.

            Ewa Kosowska- Czapla

Attorney-at-law/ Restructuring adviser

It is worth knowing that you can also check the information about the property online.

All you need to know is the Land and Mortgage Register number.

On the website: https://przegladarka-ekw.ms.gov.pl/eukw_prz/KsiegiWieczyste/wyszukiwanieKW?komunikaty=true&kontakt=true&okienkoSerwisowe=false

you can search the real estate by number in Land and Mortgage Register.

You will find it in the electronic land and mortgage register:

Section I - designation of real estate, e.g.

• land property, where you can check the location of the property, e.g. plot number, registry district,
• residential property, where you will find the location: address, purpose of the premises, description of the premises (type and number of rooms), storey, usable area,

It is also worth knowing that by checking the plot, how you enter the designation of the property, and then the identification number of the plot, you can be redirected to the map of the plot on the Geoportal page, where you will see a satellite image of the plot.

Section I SP - list of rights related to ownership

• ownership interests held by easements

Section II - ownership

• information on who is the owner, what are the shares in the joint ownership.

Section III - rights, claims and limitations, e.g.

• usufruct
• easements encumbered with the property,
• ground: passage, passage, transmission,
• personal: flats,
• information on pending debt collection proceedings,
• information about the preliminary contract.

Section IV - mortgage

• whether it is entered or not and, if so, on whose behalf and by way of security for what amount of the claim.

In each section you will find a list of documents being the basis for entries (e.g. you will check if the real estate was acquired by way of separation, sale, donation).

             Ewa Kosowska-Czapla

Attorney-at-law/ Restructuring adviser

02.03.2019

On the market, there are more and more offers for investment in Condohotels in Poland. Usually it applies to tourist apartments in polish seaside resorts, polish big cities, polish mountain resorts. At first sight, an investment in an attractive property seems very beneficial. However, as just like every investment, common sense and caution are also advisable here.

At first, it should be note who offers such investment and check the company out. Then it is important to investigate the legality of the investment and its stage, especially whether the party to the contract actually run a business and owns the property and then will become its administrator.

 Often, from the very beginning, the construction of a hotel is financed from investors' money and there may be a problem when the financing ends at some point. For that reason it should be considered, that the earlier stage of investment, the bigger risk that investment will be not finalized.

 It should be pointed out that the sold apartments are non-residential, and therefore, property buyers are not protected by the provisions of the Act on the protection of the purchaser of dwelling premises or a detached house. Thus, for example, the paid funds are not subject to special protection. The following contracts are most often concluded by way: preliminary contract, developer contract, lease contract with a guaranteed profit at a fixed level, a lease contract without a guaranteed profit (profit depending on the amount of income earned and without the upper limit). It’s also worth knowing in advance how high the costs of the management are and the rules of participating in it. Cause unprofitability of the hotel is another risk burdening the investor.

It is also worth guaranteeing the real possibility of using apartment and checking how it is used when we are not there. Is it possible, that the calculation supposing, that the apartment is rented whole the time is real to be achieved? What if the seller or property manager declares bankruptcy? Will it be possible to rent an apartment on your own?

 If you are interested in the investment, then it is worth comparing the contracts offered by various developers in order to take advantage of the best option.

The Law Office helps in analyzing contracts and checking investment documents.

Ewa Kosowska-Czapla

Attorney at law

In the practice of the Law Firm it happens that contractors from different countries cooperate with each other for many years even without a contract. In the event of a conflict, it may happen that one of them will transfer its claim to another entity.

Such a transfer of claims may be very unfavourable to the other party, as it will significantly reduce the possibility of set-off of mutual claims.

According to Article 14(2) of the Regulation on the law applicable to contractual obligations (Rome I), the law to which the assigned claim is subject shall govern its transferability, the relationship between the purchaser of the claim and the debtor, the conditions for the effectiveness of the assignment and the liberating effect of the debtor's performance. Therefore, if the law to which the sold claim is subject is Polish law, in this situation the transfer is regulated by the Polish Civil Code.

According to art. 509 § 1 of the Polish Civil Code, a creditor may transfer a claim to a third person (transfer) without the debtor's permission, unless this would be contrary to the law, a contractual reservation or the nature of the obligation. Thus, the consent of the debtor will not be required for the assignment of the claim. The debtor may find himself in a situation where the claim will be asserted by a completely different entity, not even known to him.

At the same time, the provision indicates that the contract may state otherwise. Thus, only the agreement will protect the debtor against the uncontrolled transfer of the debt to another person.

As I wrote in the introduction, many contractors cooperate with each other without a contract, so the lack of an agreement in this respect is very unfavourable for the debtor.

The solution is unfavourable not only because the debt may be bought out by, for example, a debt collection company. Making a transfer also blocks to some extent the possibility of settling one's own claims, e.g. by way of set-off.

Ewa Kosowska-Czapla

Attorney-at-law/ Restructuring adviser

In the case of international contracts for the sale of goods regulated by the Convention on Contracts for the International Sale of Goods (CISG Convention), the contracting parties may, in certain cases, withhold their obligations.

The general principle of simultaneous and equivalent performance in sales contracts is legally established. The purpose of these rules is to ensure that the parties receive a consideration of equal value to that offered. However, for example, sometimes the principle of simultaneity is not or cannot be applied e.g. in the case of deferred payment sales. Therefore, the law moves forward in situations where a party to the contract has real fears of a real threat to the fulfillment of the contract by the other party. Such fear will be evaluated by the court in a possible trial and should be regarded as justified by the circumstances of the case, assuming a reasonable person's pattern of conduct.

According to Article 71 of the CIS Convention, a party may suspend the fulfilment of its obligations if, after the signing of the contract, it turns out that the other party has failed to fulfil a significant part of its obligations because of this:

• a serious lack of capacity or solvency of that party, or
• its behaviour during the preparation for performance or during performance of the contract.

If the seller has shipped the goods before the reasons described in the preceding paragraph become known, the seller may oppose the delivery of the goods to the buyer, even if the buyer has a document authorising him to receive them. This paragraph applies only to rights to goods in the relationship between the buyer and the seller.

The withholding party shall immediately, before or after shipment of the goods, notify the other party of the suspension of performance and shall continue fulfillment if the other party provides adequate safeguards for the proper fulfillment of its obligations.

In the light of the content of this provision, it is worth noting the following points.

First of all, abstention is allowed when, after the signing of the contract, there is a fear of non-fulfilment of the contract. This means that the circumstances giving rise to concern must arise after the conclusion of the contract or be unknown to the other contracting party at the time of the conclusion of the contract.

Secondly, the threat of breach of contract must relate to a “significant part of the obligations”. In this case, we will apply a quantitative and qualitative proportion. It will also be important which obligations were most important for the parties.

The fear of non-fulfilment must be linked to the events specified in the Convention:

• serious inability to fulfil, e.g. due to strike, armed conflict,
• lack of solvency, e.g. long-term lack of liquidity resulting in non-payment; lack of solvency may affect both the buyer and the seller,
• the other party's wrongful behaviour.

The necessity of proving the existence of conditions enabling the exercise of the right of withholding lies with the entity which made use of the right of withholding.

In the case of an entitled party withholding the performance, the other party is obliged to secure it. The deadline for performance of the obligation is postponed until the security is deposited.

            Ewa Kosowska- Czapla

Attorney-at-law/ Restructuring adviser

It is worth knowing that you can also check the information about the property online.

All you need to know is the Land and Mortgage Register number.

On the website: https://przegladarka-ekw.ms.gov.pl/eukw_prz/KsiegiWieczyste/wyszukiwanieKW?komunikaty=true&kontakt=true&okienkoSerwisowe=false

you can search the real estate by number in Land and Mortgage Register.

You will find it in the electronic land and mortgage register:

Section I - designation of real estate, e.g.

• land property, where you can check the location of the property, e.g. plot number, registry district,
• residential property, where you will find the location: address, purpose of the premises, description of the premises (type and number of rooms), storey, usable area,

It is also worth knowing that by checking the plot, how you enter the designation of the property, and then the identification number of the plot, you can be redirected to the map of the plot on the Geoportal page, where you will see a satellite image of the plot.

Section I SP - list of rights related to ownership

• ownership interests held by easements

Section II - ownership

• information on who is the owner, what are the shares in the joint ownership.

Section III - rights, claims and limitations, e.g.

• usufruct
• easements encumbered with the property,
• ground: passage, passage, transmission,
• personal: flats,
• information on pending debt collection proceedings,
• information about the preliminary contract.

Section IV - mortgage

• whether it is entered or not and, if so, on whose behalf and by way of security for what amount of the claim.

In each section you will find a list of documents being the basis for entries (e.g. you will check if the real estate was acquired by way of separation, sale, donation).

             Ewa Kosowska-Czapla

Attorney-at-law/ Restructuring adviser

02.03.2019