24.1 C
London
Friday, August 19, 2022

Developer Act. Additional security for buyers. The Development Guarantee Fund is established

Must read

- Advertisement -


A developer law has been in force since Friday, which is to increase the protection of home buyers on the primary market. One of the main changes is the creation of the Development Guarantee Fund. Money paid by the buyers of the apartment will be returned from the collected funds. – From now on, buyers of houses or flats on the primary market are protected like never before – assessed Małgorzata Ślepowrońska, president of the Insurance Guarantee Fund (UFG).

The Development Guarantee Fund is established

The Act on the protection of the rights of buyers of a flat or a single-family house and the Development Guarantee Fund establishes a Development Guarantee Fund (DFG), similar to the Tourist Guarantee Fund that has been operating for several years. DFG will be reimbursed funds paid by people buying a flat or a house in the event of the bankruptcy of the developer or the bank running the escrow account, and also in the event of the buyer withdrawing from the contract – e.g. due to a significant defect in the premises or if the developer fails to transfer the ownership of the premises to the buyer. within a certain period.

The buyer of a new apartment will be able to refuse to accept it due to a significant defect in the premises. If the developer does not remove it within the prescribed period or if the existence of a significant defect is found by a construction expert, the buyer will be able to withdraw from the developer agreement.

- Advertisement -

The act obliges the developer to deliver the information prospectus prior to the conclusion of the agreement, and also specifies what information should be included in the prospectus – so far, the document was issued at the request of the person interested in concluding a developer agreement. The developer will also have to inform whether the premises being sold meet all the legal prerequisites for calling it a flat.

Agreement and reservation fee

In addition, issues related to reservation contracts were regulated. The booking fee cannot exceed 1%. real estate prices. If a developer agreement is concluded, this amount will be counted towards the price of the apartment and will be transferred to a housing escrow account. If the bank does not grant the customer a loan, he will recover the money paid in.

If, on the other hand, the developer concludes a contract with another person regarding the reserved premises, he will have to reimburse the booking party for the double amount paid by him. If the client changes his mind, he will lose the amount paid.

Payment schedule

The new regulations also increase supervision over the spending by developers of funds from housing trust accounts. The payment schedule has been linked to the construction schedule. The buyer will pay as the construction progresses – only for the completed stage.

The Development Guarantee Fund will be a separate account in the Insurance Guarantee Fund. The developer will have to pay DFG contributions on each payment from the buyer made to the Housing Trust Account. In the case of open fiduciary accounts it will be 0.45%, and in the case of closed fiduciary accounts – 0.1%.

Warranty included in the price of the refrigerator

The recipes were prepared by the office of Competition and Consumer Protection. UOKiK argued that the existing regulations did not provide developers’ clients with adequate legal and financial protection. – Each developer’s bankruptcy during the investment may mean the tragedy of people who were left without money and without the right to property, but with a loan for many years – pointed out Tomasz Chróstny, President of the Office of Competition and Consumer Protection.

He added that prior to the entry into force of the developer law, the provisions did not provide a full guarantee of recovering all invested funds in such a situation. He pointed out that when there were problems with completing construction in accordance with the contract, consumers were too often at the mercy of developers. – Today this situation is changing dramatically, because the legal and economic position of consumers in disputes with developers has been strengthened – emphasized the head of the Office of Competition and Consumer Protection.

As explained by the President of UOKiK, for an open escrow account next to an apartment with a value of PLN 500,000 PLN, the cost of protection is PLN 2,250, assuming a premium of 0.45%. – Therefore, in the price of the refrigerator, the consumer gets a guarantee of recovering all payments in a crisis situation, often protection of life savings – emphasized Chróstny.

“Buyers of apartments in the primary market are protected like never before”

– From today buyers of houses or apartments on primary market are protected like never before – assessed Małgorzata Ślepowrońska, president of the Insurance Guarantee Fund (UFG). As she emphasized, the Development Guarantee Fund will provide them with the return of all invested money, both in the event of the developer’s bankruptcy and in the event of bankruptcy of the developer and of the bank running a housing escrow account, which accumulates funds paid by the developer’s clients.

– DFG refunds will also be available, among others in a situation where the developer fails to transfer the ownership of the premises to the buyer within the prescribed period or fails to remove significant defects – she indicated.

UFG experts will emphasize that DFG protection will cover buyers of flats and houses on the primary market, purchased under a developer agreement, and not as ready premises after July 1, 2022. DFG protection does not cover premises purchased for the purposes of business. Investments in apartments for rent made by natural persons will, however, be protected – it is important in this case that the premises meet housing needs, even if the owner does not live there.

Main photo source: Shutterstock



Source link

More articles

- Advertisement -

Latest article