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Country - Poland
Commercial Leases
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A. SOURCES OF LEASE LAW
Applicable legislation
Leases are generally governed by the provisions of the Polish Civil Code (kodeks cywilny - KC) and the Act on Protection of Tenants as regards non-commercial leases, containing most of the provisions protecting the individual lessee.
Do any specific rules apply to commercial leases?
The Polish Civil Code (KC) distinguishes between leases that allow the lessee to collect products (fruits) yielded by the leased object (dzierzawa) and leases that allow the lessee to merely use the leased property but not to collect the fruits (najem). Usually the najem is a typical agreement for concluding leasing premises. However, considering the fact that the revenues from sub-letting can be regarded as fruits means that a dzierzawa lease agreement can also be entered into; this is, however, still disputable in the Polish legal literature.
Do different regimes apply to leases of commercial premises depending on the use of the premises by the lessee (offices, warehousing, industrial, retail)?
Some minor distinctions are made in the Civil Code as regards premises and other lease objects. The Civil Code provides also some specific distinctions with regard to dzierzawa and najem.
B. DURATION AND TERMINATION OF LEASES
Is there a minimum or maximum obligatory term?
The term may be defined and undefined. A dzierzawa can be established for a maximum of 30 years and a najem for 10 years. After expiration of the relevant term, both types of agreement are regarded as an indefinite period lease, which means that it can be terminated within a relatively short statutory time period of maximum three months.
Does the lessee have a right to renew the lease upon expiry of the initial contractual period?
Upon expiry of the lease, any renewal is subject to mutual agreement between the parties. However, If the lessee, after the expiry of the lease term, continues to use the lease object with the consent of the lessor, the agreement shall be regarded as prolonged for an undefined time period.
Do lessees enjoy security of tenure (i.e. the right to remain in occupation after their lease expires)?
No, however, the lessor cannot force the lessee to leave the premises without an enforcement title.
Do leases involve a lengthy procedure for the effective recovery of possession?
Leases invariably contain a provision allowing the lessor to terminate on non-payment of rent or breach of the lease.
The lessor has to seek a court order for the recovery of possession of the premises. The court order and the related proceedings often take several months. However, the lessee may submit himself to enforcement proceedings in a notarial deed, which allows to reduce the time necessary to obtain the court order.
Can government/local authorities require a compulsory termination of a lease?
Yes, local authorities have certain rights to acquire property on a compulsory basis for public purposes; this also includes property held under leases.
The leases of the property acquired in a compulsory manner expire after three months from the day on which the decision concerning the compulsory acquisition became final.
Is there a preferential right of acquisition?
In the case when the State Treasury or a municipality sells a real property to private third persons, a lessee, under an undefined residential lease established on this property, has a pre-emption right to purchase the real property provided it submits a respective application within 21 days from taking notice of the intended sale.
In the case of sale of agricultural land owned by the State, the lessee of this land has a pre-emption right subject to fulfilment of some statutory requirements.
The Parties may also provide a contractual pre-emption right of the lessee.
C. RENT AND COSTS
Are variable rental agreements common?
It is the market standard to link the rent to the increase of several price indexes. Adjustment is often on a yearly basis for commercial leases. Residential leases are normally not adjusted.
Most common indexation
CPI published by the Central Statistical Office (GUS), also HCPI.
Who usually pays the common expenses?
Each lessee is usually required to pay a proportion of the service costs incurred by the lessor. The proportion is calculated based on the size of the respective unit. Service costs usually paid by the lessee are direct utilities: electricity, water, power resources, utility services, and telecommunication services. The lessor usually covers property taxes as well as insurance. The lessee insures its own assets and against third party liability.
For leases of commercial premises, it is common to pass a much bigger proportion of the costs on to the lessee.
Certain expenses are normally excluded from the service charge, such as the initial development of the building or repairs of the static structure itself.
Are there any other expenses connected with the lease?
In the case the lease agreement is concluded with a certified date, notary costs for such certification have to be paid.
Which indirect taxes apply?
VAT at 22% for commercial leases.
D. OBLIGATIONS OF LESSOR AND LESSEE
Who is responsible for different works on the premises?
The lessor has to maintain the lease object so that it is fit for its purpose during the whole tenancy. The lessor has to repair and maintain the common areas and the structure of the building. The lessor shall be liable for defects of the lease object, which wholly or partially obstruct them from being used according to their purpose. In such cases, the lessee may request a rent reduction or, in some circumstances, even withdraw from the agreement. The lessee is responsible for minor repairs.
Can the lessee alter or improve its premises?
Yes, however in the case of improvements being made to the lease object by the lessee, the lessor may, provided there is no other agreement between the parties, keep the improvements and pay the relevant remuneration or request restitution.
What restrictions exist on the lessee's right to use the premises?
Leases will generally restrict the use of the premises to a particular use (restaurant, office, etc).
Specific activities which may cause inconvenience are also prohibited. The lessor may also be restricted by planning laws to allow a use not covered by the respective planning authority.
Is there any right to transfer the lease?
In the case of a transfer of ownership title to the lease object, the buyer enters automatically into the lease as the lessor and may terminate the lease within a statutory time period. Provided that the lease agreement for the lease object leased for a fixed-term was concluded with a certified date (i.e. a date confirmed by an official authority, including a tax office or notary), such lease agreements have a degree of legal protection with respect to the subsequent owners of the leased property. In such a case, the agreement may not be terminated prematurely by a subsequent owner if the leased property was delivered to the lessee prior to the ownership transfer. If the certified date is not given, the purchaser has the right to terminate the lease within the statutory terms applicable to undefined term leases.
Is there any right to sub-let the premises?
Subletting of the premises is not allowed, if the parties do not agree otherwise.
Which are the usual guarantees?
In general, the parties are free to contract as they wish. For residential leases, deposits of one month rent are common. For commercial leases, it is more common to provide bank guarantees.
E. PARTICULAR TYPES OF LEASE
Do office leases have any particular characteristics?
They will normally correspond with the characteristics set out above.
Do retail leases have any particular characteristics?
Provisions enabling the lessor to maintain a suitable mix of lessees are common.
Retail leases are typically subject to obligations which exist for the benefit of the shopping centre as a whole. For example, an obligation to keep open and trade during specified hours and to contribute towards marketing of the entire centre.
Do hotel leases have any particular characteristics?
Hotel leases are similar to commercial leases.
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