PZFD’s position on the draft law for housing price transparency

Developers should provide consumers with complete, reliable, and up-to-date information on apartment prices. This is the objective of a bill proposed by Poland 2050, which has the backing of the Polish Association of Developers (PZFD). However, PZFD has suggested clarifications to ensure the law effectively serves its intended purpose.

Clarifications Proposed by PZFD

The Polish Association of Developers has submitted comments on the draft amendment to the Act on the Protection of the Rights of the Purchaser of Residential Premises. This amendment, introduced by Poland 2050 – Third Way, seeks to enhance price transparency in the housing market.

“We fully support the introduction of measures that provide prospective buyers with quick and comprehensive access to apartment price information. Such transparency benefits both buyers and developers. However, the current draft contains ambiguous wording that may lead to misinterpretations, resulting in improper enforcement or even circumvention of the regulations,” stated Bartosz Guss, CEO of PZFD.

One major concern is that the current wording allows certain companies to avoid publishing their price lists.

Ensuring Transparency at All Stages

The draft law mandates developers to disclose apartment prices in contracts defined under Article 3(1) and Article 4(1) of the Act on the Protection of Purchasers’ Rights. However, these provisions apply only to real estate sales contracts, which do not necessarily cover all stages of the development process.

“Not all agreements within a development project are sales contracts. In the early phases of an investment, developers often enter into binding agreements, such as development or preliminary sales contracts, which do not yet transfer ownership but serve as commitments for future sales,” explained Przemysław Dziąg, legal advisor and Deputy General Director of PZFD.

Due to vague wording, some companies might interpret that they are not obligated to disclose prices at the pre-sale stage. This loophole could significantly reduce market transparency for consumers and allow firms to bypass information requirements.

To address this, PZFD proposes expanding the new regulations to include all contracts throughout the investment process, including development agreements, rather than limiting them to sales contracts.

“This adjustment would ensure transparency from the initial stages, preventing information gaps and aligning with consumer protection goals,” Dziąg emphasized.

Improving Price Disclosure

PZFD suggests modifications to the information developers must disclose. While the draft law requires the publication of the price per square meter and total price, PZFD argues that consumers make decisions based on the total price of the apartment, considering factors such as finishing standards, room layout, building location, and parking availability.

“A more effective approach would be for developers to provide both the total price and the usable area of the property,” stated Dziąg. “This would give buyers a clearer understanding of value and enable better comparisons between offers.”

Additionally, the draft law mandates developers to maintain a dedicated website for each project, displaying essential company information. However, PZFD argues that many companies already publish project details on their corporate websites, which is a practical and consumer-friendly approach. The law should explicitly allow this practice while ensuring compliance with pricing transparency requirements.

Providing Complete Investment Information

PZFD recommends that developers be required to publish an investment prospectus on their websites. This document provides crucial details about construction timelines, finishing standards, financial conditions, and nearby infrastructure plans.

“This ensures buyers have a comprehensive understanding of their investment and prevents unpleasant surprises, such as the construction of a major road near their residence years later,” PZFD commented.

While PZFD supports the idea of publishing price changes, it warns that presenting the full history of every price fluctuation could be confusing for consumers. Instead, it proposes an approach similar to the Omnibus Directive used in general consumer transactions: requiring developers to disclose price changes over the past 30 days before the latest update. Buyers should also have the option to request a full price history on a durable medium.

Avoiding Redundant Regulations

The draft law introduces additional penalties for developers failing to meet transparency requirements, imposing fines of up to 10% of annual turnover. However, PZFD argues that existing laws already provide effective enforcement mechanisms through the Office of Competition and Consumer Protection (UOKiK).

Under Article 24 of the Competition and Consumer Protection Act, failing to provide complete, reliable, and truthful information is already considered a violation of consumer rights. This allows UOKiK to assess company practices and impose penalties accordingly.

“Once the new price transparency rules take effect, non-compliance would be penalized under existing laws. There is no need to duplicate regulations, especially since other sectors are not subjected to similar industry-specific rules,” concluded Dziąg.

Conclusion

PZFD supports the initiative for greater transparency in housing prices but advocates for refinements to the draft law. By ensuring that all agreements are covered, requiring clearer price disclosures, maintaining flexible website requirements, and avoiding redundant penalties, the regulations can better serve consumers while maintaining practical implementation for developers.