Imagine purchasing an apartment for 10 million złoty. After the transaction, however, it turns out that the property is encumbered with an easement that no one had previously verified, and the money sent to the account specified in the email ended up in a hacker’s account. In the Polish luxury real estate market, worth over 3.5 billion złoty, such situations do occur – but they can be prevented. Below, we present principles for capital protection in high-value transactions.
In short: For premium transactions ranging in value from several to tens of millions of zlotys, traditional forms of security—a simple written contract, a standard transfer, and trust—are insufficient. Security requires comprehensive legal and technical due diligence, the use of notarial escrow, AML verification, precise contractual provisions, and information flow control.
Main rules of safe premium transaction:
- A detailed legal and technical analysis (due diligence) – verifying the land and mortgage register is just the beginning. It’s essential to examine the ownership history, third-party claims, easements, and the actual technical condition and operating costs.
- Notarial deposit as standard – for transactions above PLN 2 million, waiving the deposit means unnecessary risk.
- Full verification of the parties – checking the identity, beneficial owner, authorization of proxies, source of funds and sanction lists.
- A preliminary contract in the form of a notarial deed – only this form allows the conclusion of the final contract to be enforced in court.
- Confidentiality protection – signing a non-disclosure agreement (NDA) before the first presentation is standard in the off-market segment.
How is a premium transaction different from a standard transaction?
Value and Risk Scale
The difference between buying a PLN 600,000 apartment and a PLN 6 million one isn’t just about the price tag. In the mainstream segment, the financial risk is significantly lower. With luxury purchases, a single missed entry in the land and mortgage register, an unverified easement, or an imprecisely worded contract clause can result in a loss of hundreds of thousands of zlotys.
The scale of capital involvement is shown by the largest transactions on the Polish market:
- 600 m² apartment in Warsaw – PLN 30 million ,
- penthouse in Tricity – nearly PLN 25 million .
As the value of real estate increases, the detailed examination of its legal and technical condition must increase.
Buyer Profile and Ownership Structure
In the premium segment, both cash purchases and transactions conducted through special purpose vehicles (SPVs) are common practices. This structure requires additional verification of the beneficial owner and the source of financing.
The form of purchase itself is also important:
| Transaction model | Description | Complexity |
| Asset deal | Direct purchase of real estate (standard liability rules). | Lower |
| Share deal | Purchasing shares in a company that owns real estate requires additional corporate, financial, and tax analysis. | Higher |
The importance of confidentiality and discretion
In the luxury goods market, privacy is a key element of the offer. In the premium segment, a significant portion of listings operate off-market. Detailed property information is shared only with verified clients, often after signing a non-disclosure agreement (NDA).
Time and complexity of the process
| Market segment | Average transaction completion time |
| Popular | 1–3 months |
| Premium | 3–12 months |
The longer turnaround time in the premium segment is due to the multi-stage process. It includes negotiations with legal advisors from both parties, detailed legal and technical analysis, payment coordination via notarial escrow, and AML and KYC verification procedures.
Rushing into high-value transactions increases the risk of making costly mistakes.
Legal Due Diligence – Legal Status Analysis
The land and mortgage register is the beginning, not the end
Examining the land and mortgage register is the first stage of legal verification, but it should not be the only element of real estate analysis.
When the purchased property (e.g. a premises in a historic tenement house or a house on land with unregulated status) does not have a land and mortgage register, verification is carried out on the basis of other documents: an extract from the land register, administrative decisions and previous notarial deeds.
What to check besides the land and mortgage register
A full legal analysis of premium real estate also covers the following areas:
- The chain of ownership – examining the history of ownership from the moment of construction or first subdivision. Breaks in the chain of contracts, gifts to unrelated persons, or unclear inheritances require clarification.
- Claims of former owners – a key issue in cities such as Warsaw (the effects of the Bierut Decree of 1945) or Kraków (tenement houses in city centers).
- Land and personal easements – transmission (technical infrastructure), passage, or driveway. On large residential plots, an undisclosed or overlooked road easement in favor of a neighbor can restrict planned development or landscaping.
- Access to a public road – it happens that houses in premium suburban locations do not have legally regulated access to a public road, which generates long-term court disputes.
- Illegal construction – extensions, terrace additions, private ponds, or gazebos erected without the required notifications or permits. The cost of legalizing or demolishing such structures can be very high.
- Zoning in the development plan – the local development plan (MPZP) specifies the development conditions for adjacent plots. This allows you to avoid purchasing a villa overlooking an area that could be occupied by a highway or multi-family housing development in a few years.
Additional risks in the premium segment
Apartments in historic buildings are subject to special requirements from the conservator. These regulations may prevent:
- changing the layout of internal walls,
- installation of modern window joinery,
- installation of external air conditioning units on the facade.
Moreover, the technical condition of installation lines (electrical, water, sewage and heating) in hundred-year-old buildings often requires modernization, the cost of which can be very high for a single premises.
The acquisition of real estate belonging to special purpose vehicles requires additional examination of the entity’s financial condition, its business history, company agreements and any corporate encumbrances.
Technical and operational due diligence
Technical condition under the aesthetic layer
High-quality interior finishes can mask structural or installation flaws. The most costly defects in premium properties most often involve elements invisible during a standard inspection.
| Study area | Scope of verification |
| Installations | The condition of electrical cables, pipes (copper or steel) and the tightness and patency of risers. |
| Design | The occurrence of wall cracks, the condition of waterproofing, dampness and thermal bridges (examination with a thermal imaging camera). |
| HVAC systems | Performance, wear and tear and service history of heating, ventilation and air conditioning systems. |
| Acoustics | The level of acoustic insulation of walls and ceilings (especially important in apartment buildings). |
| Home automation (BMS) | Software license status, warranty validity, and availability of manufacturer technical support. |
It is recommended to commission an independent technical audit from a specialist chosen directly by the buyer.
Intelligent systems and digital security
Modern premium properties equipped with building management systems (BMS), cameras, sensors, and voice control require a network security assessment. Before purchasing, verify:
- Network segmentation – do Internet of Things (IoT) devices operate in a dedicated and secured virtual network (VLAN)?
- Privacy protection – do video surveillance systems record images outside the property boundaries (which is related to personal data protection regulations)?
- Reliability and backup power – do key installations have power backup systems and the ability to manually control them in the event of a grid failure?
- Software support and updates – is the home control software regularly patched by the manufacturer?
Beware of cybercrime: One of the main threats when settling such large contracts is attempting to extort funds by sending a fake bank account number via email. For multi-million dollar transactions, verifying payment details through another channel (e.g., in person or by phone) is essential.
Energy efficiency and operating costs
An energy performance certificate is a mandatory document for property sales and rentals. In the premium segment, it directly impacts operating costs – maintaining large residences can cost from several to tens of thousands of złoty per month. For this reason, buyers are increasingly assessing long-term energy costs. Two phenomena are evident in the Polish market:
- Green premium – higher valuation of facilities equipped with energy-saving and ecological technologies (e.g. heat pumps, heat recovery, photovoltaic cells with energy storage).
- Brown discount ( brown discount ) – lowering price expectations in the case of properties with high energy consumption and outdated heating installations.
Securing funds in premium transactions
Notary deposit
When purchasing real estate on the secondary market, a notarial deposit is one of the most effective tools for capital protection. The legal basis for this procedure is set out in Article 108 of the Notarial Law.
Deposit procedure:
- The buyer transfers the agreed amount to the notary’s dedicated deposit account.
- The notary blocks the funds until the conditions specified by the parties in the notarial deed are met.
- The conditions for payment may include, among others: submitting the bank’s consent to cancel the seller’s mortgage, handing over the property to the buyer, or providing certain certificates of no rent or tax arrears.
- After presenting evidence of meeting these conditions to the notary, the funds are transferred to the seller’s account.
The cost of preparing a deposit report is a maximum of half the notarial fee. For a transaction worth PLN 5 million, this fee is approximately PLN 4,000–5,000 gross, which is a negligible fraction of the value of the subject matter of the contract and directly impacts the security of the settlement.
Application example: Purchase of an apartment worth PLN 5 million, encumbered with a PLN 1.5 million mortgage. A notarial deposit allows for the following sequence of events to be safely completed:
- Transfer of PLN 1.5 million directly to the mortgage creditor’s bank account in order to fully repay the debt.
- Obtaining consent to cancel the mortgage (so-called cancellation notice ).
- Transfer of the remaining part of the price (PLN 3.5 million) to the seller’s account after submitting an application to remove the encumbrance from the land and mortgage register.
This allows the buyer to avoid the risk of paying the full price for a property that could remain burdened with debt.
Escrow account (primary market)
, a residential escrow account (open or closed) is used . Following the transitional periods for the amendment to the Developer Act, buyers’ deposits are protected by the Developer Guarantee Fund (DFG) . This fund ensures the refund of funds in the event of the bankruptcy of the developer or the bank holding the account.
In the case of a closed account, the bank pays the developer a lump sum payment only after ownership of the property is transferred to the buyer. This ensures the highest possible level of protection for the invested capital.
Other transaction hedging instruments
- Voluntary submission to enforcement (Article 777 of the Code of Civil Procedure) – a debtor’s declaration submitted in the form of a notarial deed. In the event of non-payment or failure to meet the deadline for the delivery of the premises, it facilitates the initiation of enforcement proceedings, bypassing the lengthy court process.
- Large-Value Settlements via the SORBNET3 System – From September 2025, the National Bank of Poland will implement the SORBNET3 standard, which supports key interbank transactions in real time, regardless of the amount. This allows for the immediate posting of multi-million transfers.
- Verification of payment details – before making a transfer, the bank account number of the law firm or the seller should be confirmed by a method other than email (e.g. in person at the notary office or by telephone via a verified connection) to prevent funds from being intercepted by cybercriminals.
Preliminary agreement and key provisions
The form of a notarial deed is a requirement
In the premium segment, concluding a preliminary agreement in standard written form carries too much risk. Only a notarial deed allows for the enforcement of the final agreement in court (pursuant to Article 390 § 2 of the Civil Code). A notarial deed also forms the basis for entering a claim for transfer of ownership in Section III of the land and mortgage register. This entry limits the owner’s ability to sell the property to another entity during the ongoing loan arrangements or process.
Deposit and advance payment
The choice of the form of prepayment is important for the security of the contract:
| Instrument | Legal nature and function | Financial consequences (based on the example of a transaction worth PLN 10 million with a deposit of PLN 500,000) |
| Deposit (Article 394 of the Civil Code) | Security function: if the buyer fails to fulfill the contract, the deposit is forfeited to the seller; in the event of the seller’s fault, the seller must return twice the amount. | Withdrawal from the contract due to the seller’s fault gives rise to the seller’s obligation to return the amount of PLN 1 million . |
| Advance | Partial payment towards the price: refundable if the transaction fails for any reason. | The funds are returned in nominal amount (PLN 500,000), no additional financial sanctions. |
In premium transactions, the market standard is to use a deposit of 5–10% of the sales price . The preliminary agreement should precisely define the situations in which the deposit is refundable without consequences for the buyer (e.g., a bank’s refusal to grant financing despite meeting formal requirements, or the discovery of previously unknown legal or physical defects in the property before the conclusion of the final agreement).
Key contractual clauses in premium
A properly prepared preliminary contract should contain additional detailed provisions:
- A detailed inventory of furnishings – permanent furniture, premium household appliances, audiovisual systems, and sometimes decorative elements or works of art can constitute a significant portion of the transaction value. The lack of a precise appendix specifying which items are included in the price can lead to disputes during the handover process.
- Contractual penalties for delays in the delivery of real estate – they should be proportional to the value of the subject of the contract, protecting the buyer against financial losses resulting, for example, from the need to rent replacement premises for a longer period.
- Financing clause – even investors with adequate capital often use external financing (e.g., bridge loans). The transaction schedule should include a realistic timeframe for banks to issue a credit decision.
- Rules for the return of funds from the deposit and the division of costs – precise definition of which party covers the notarial fee and court fees and the deadline by which the notary is to return the funds from the deposit in the event of withdrawal from the contract.
Identity verification of parties and anti-money laundering procedures (AML/KYC)
Why AML is especially important in premium real estate
Premium real estate transactions are subject to stringent AML procedures. Notaries, intermediaries, and financial institutions are required to verify the identity of the parties and the legal origin of the funds used for the purchase.
Scope of verification of the parties to the contract
- The process of verifying the parties involves checking their identity, the ownership structure of the entities participating in the transaction and the source of funds intended for the purchase of the property.
Warning signals (red flags)
Increased caution should be exercised in the following cases:
- pressure to quickly finalize the transaction,
- unclear or overly complex ownership structure,
- financing from third parties,
- lack of documents confirming the source of funds.
The transparency of the process protects the interests of both the buyer and the seller.
Protections when purchasing from the premium primary market
Legal regulations
After the end of the two-year transition period (July 2024), the amendment to the Act on the protection of the rights of purchasers of residential premises or single-family houses will be fully applicable to all new investments:
- Developer Guarantee Fund (DFG) – provides full protection for buyers’ payments, including in the event of bankruptcy of the developer or the bank maintaining the escrow accounts.
- Definition of a significant defect – regulation of the procedure for the technical acceptance of premises, enabling the buyer to refuse acceptance in the event of serious defects that prevent the use of the property.
- Price transparency – the obligation to determine the price of the premises in relation to its usable area measured in accordance with the Polish Standard.
- Harmonizing the payment schedule – linking the installments paid by buyers to the actual progress of construction works.
These regulations provide investors on the primary market with a higher level of legal protection, which is particularly important when investing millions of zlotys.
Verification of developer credibility
Before concluding a contract with a developer, it is necessary to verify him in the following areas:
- Registration analysis (KRS) – consistency of share capital, composition of the management board and capital links with related entities (SPV principle).
- Market experience – the number of successfully completed and commissioned investments of a similar standard.
- Financial reporting – analysis of the balance sheet and profit and loss account in terms of the debt level and financial liquidity of the capital group.
- Opinions and dispute history – verification of court proceedings and opinions of previous buyers using facilities built by the developer.
Important provisions in premium development agreements
- Precise finishing standards – avoiding generic phrases such as “luxury finish.” The technical appendix should include the names of the manufacturers, collections, and technical specifications of the materials used (e.g., specific types of natural stone or joinery).
- Intermediate and final deadlines – defining the work schedule and precise contractual penalties for delays in putting the investment into use or transferring ownership.
- Design changes – limiting the developer’s ability to make unilateral changes to the architectural design or development of the common area without the prior consent of the buyer.
Off-market trading and confidentiality of information
Why privacy is key
The most prestigious premium properties in Poland are rarely listed on public portals. Protecting the image and privacy of owners requires maintaining confidentiality regarding the exact location, layout, and unique interior furnishings. Making this information public risks violating the privacy of household members or attracting those uninterested in purchasing. Therefore, confidentiality becomes a crucial element in building the value of a property.
Confidentiality protection tools
To minimize the risk of data leakage, the following protective instruments are used:
- Non-disclosure agreement (NDA) – signed before disclosing detailed materials (drawings, addresses), specifying high contractual penalties for violating the prohibition of disclosing information.
- Financial and intentional verification of buyers – preliminary examination of the financial capacity and identity of a potential client before organizing the first presentation.
- Marking of graphic materials (watermark) – personalization of transmitted photos and projections, facilitating identification of the source in the event of a possible leak.
- Protecting the identity of owners in sales materials – preparing offer documents in such a way as to prevent the identification of the seller’s identity before entering into binding negotiations.
Risks specific to local markets (Warsaw, Krakow, Tricity)
Warsaw
The capital city represents the largest and most diverse premium market in the country. The specifics of individual districts and building types (e.g., high-rise apartments on Złota or Twarda Streets, detached villas in Mokotów, Wilanów, or Saska Kępa) raise distinct legal challenges:
- The effects of the Bierut decree – the issue of claims by former landowners or their heirs still affects the legal status of tenement houses and land in central districts (Śródmieście, Wola, Mokotów).
- Complex ownership structure – the presence of numerous joint ownerships and transmission or passage easements established in recent decades.
- Dominance of the off-market market – transactions concerning the most prestigious premises in Warsaw take place almost exclusively on the off-market basis.
Cracow
The Krakow market is characterized by a large share of historic tenement houses in the Old Town and Kazimierz districts, as well as residential developments in Wola Justowska . The main risk areas include:
- Conservation requirements – strict guidelines of the Provincial Office for the Protection of Monuments in Krakow, which may limit the possibility of adapting, renovating or technically modernising the premises.
- Technical risks of older tenement buildings – wear and tear of ceilings, damp basements, lack of gravity ventilation and wear and tear of common installations.
- Management of common areas – high fees for the renovation fund in small housing communities burdened by the need to renovate historic facades or staircases.
Gdynia and Tricity
The specificity of the seaside market (Gdynia Orłowo, Kamienna Góra, Sopot) is related to the specific geographical location of the property:
- Guaranteed exposure and view – the view of the coastline determines the property’s value. Before purchasing, it is important to verify the development plans for adjacent plots to ensure that new developments could obstruct the view.
- Soil and geological conditions – the proximity of cliffs and slopes requires a thorough examination of the soil’s bearing capacity before starting or purchasing a home investment.
- The influence of atmospheric factors – increased air humidity and salinity require the use of materials with high corrosion resistance, which increases the costs of subsequent building maintenance.
Development directions and market trends
The current landscape of the luxury real estate market is shaped by certain trends:
- The buyer’s negotiating power has grown in importance , with transaction discounts compared to asking prices averaging up to 15%. The time it takes to make a purchase decision has also lengthened (averaging 3 to 6 months for apartments and up to a year for detached residences).
- Extended due diligence procedures – a detailed examination of the energy efficiency and long-term operating costs of a luxury property is becoming standard.
- Tightening AML requirements – full financial transparency of the parties and examination of the origin of capital are becoming common practice in high-value transactions .
- IT risk management (cybersecurity) – increasing attention is paid to the separation of building automation systems (BMS/IoT) from home networks and strict compliance with procedures to prevent payment fraud.
- The direction of discreet luxury ( quiet luxury ) – a change in the criteria for evaluating luxury. Instead of spectacular, showy design solutions, investors prefer the highest acoustic quality, excellent thermal parameters, and advanced yet discreet technological systems that guarantee privacy.
- Title Insurance Insurance – this service is gaining popularity when purchasing properties with complex legal histories (e.g., historic buildings, city-center tenement houses). The cost of the policy is typically 0.3–0.8% of the property value, which helps minimize the risk of losses resulting from potential future legal claims by third parties.
- Professionalization of due diligence processes – transaction analyses in the premium segment are beginning to resemble audit processes known from the corporate mergers and acquisitions (M&A) market, combining image, legal, tax, technical and geodetic due diligence of the entity into one structured package.
Secure Transaction Control Card
1. Seller’s documents
- Identity of the seller (ID card, passport).
- Marital status and applicable property regime (verification of the need to obtain the spouse’s consent to the sale).
- Powers of attorney (examination of the scope of authorization, notarial form and validity).
2. Real estate documents
- Land and mortgage register (detailed overview of entries in all four sections, including verification of current mentions).
- Title of the property purchased by the seller and full ownership history (ownership chain).
- Local Development Plan (MPZP) or decision on development conditions (WZ).
- Certificates of no arrears in local taxes and service charges.
- Full architectural, construction and as-built documentation of the facility.
- Energy performance certificate.
3. Buyer verification (seller’s obligation)
- Establishing the identity and identifying the beneficial owner (in the case of companies).
- Verification of the source of capital.
- Checking sanctions lists and PEP status.
4. Settlement and payment
- Choosing a safe form of settlement (notary deposit or residential escrow account).
- Precise formulation of the conditions for the withdrawal of funds and their security.
- Additional verification of the correctness of the payment account number outside of e-mail.
5. Security of contractual provisions
- Maintaining the form of a notarial deed of the preliminary contract.
- Application for entry of a claim for transfer of ownership in the land and mortgage register.
- Detailed specification and list of other movable equipment of the property.
- Clear definition of the amount of contractual penalties, conditions and deadlines for withdrawal from the contract.
6. Post-transaction activities
- Preparation and signing of a detailed interim handover and acceptance protocol (including meter readings).
- Rewriting contracts with utility suppliers and notifying the property manager of the change of ownership.
- Submitting a tax return and settling the tax on civil law transactions (PCC-3) in the case of purchases on the secondary market, if this obligation was not fulfilled through a notary.
Summary
Securing transactions in the luxury real estate market requires a multifaceted approach, combining thorough document verification, technical condition analysis, and precise contract drafting. Choosing secure payment models, such as notarial escrow, and ensuring data confidentiality are key components in minimizing investment risk. Collaborating with independent legal experts, technical advisors, and professional brokers allows for a safe and efficient purchase process with full capital protection.
Frequently Asked Questions (FAQ)
1. Is a notarial deposit mandatory when purchasing premium real estate?
No, using a notarial deposit is voluntary. However, for high-value transactions (over PLN 2 million), it is a recommended standard to protect the interests of both parties. The cost of this service is typically a fraction of a percent of the purchase price, which is negligible compared to the amount being secured.
2. What is the difference between a notarial deposit and a housing escrow account?
A notarial deposit is maintained directly by a notary and is most often used for transactions on the secondary market. A residential escrow account is a separate bank account maintained by the developer when implementing residential investments on the primary market. Disbursement of funds from the escrow account is overseen by the bank servicing the development project.
3. Does a written preliminary contract provide adequate security?
The simple written form does not guarantee full legal protection. In the luxury segment, it is recommended to conclude a preliminary contract in the form of a notarial deed. Only this form allows for the entry of a claim for transfer of ownership in the land and mortgage register and any potential judicial enforcement of the final contract.
4. What documents should be checked before purchasing a prestigious apartment?
The minimum required documentation includes: a land and mortgage register, a local development plan or planning permission, an extract and a map from the land register, certificates of no arrears in taxes and service charges, and an energy performance certificate. In premium transactions, this scope is expanded to include an audit of reprivatization claims, an examination of the seller’s corporate structure (in the case of companies), and an independent technical assessment of the property.
5. What is the standard deposit amount for a transaction worth PLN 5 million?
In line with market practice, the deposit typically ranges from 5% to 10% of the property price, which, given the specified amount, translates to a total of PLN 250,000–500,000. The preliminary agreement should precisely define the terms for the refund or retention of this amount, which prevents interpretation disputes during the preparation phase of the final agreement.
6. Can a foreigner safely purchase a luxury property in Poland?
Yes, Polish law allows foreigners to purchase real estate. However, it’s important to remember the formal requirements: citizens of countries outside the European Economic Area (EEA) and Switzerland must obtain a permit from the Minister of Internal Affairs and Administration when purchasing detached houses or land. Transactions involving detached residential premises (apartments) generally do not require such a permit, with the exception of properties located in the border zone.
Katarzyna Borkowska