POLAND Law and Practice Contributed by: Michał Wielhorski, Mateusz Prokopiuk, Małgorzata Wąsowska and Klaudia Michalec, act legal Poland
be resold again without the need to wait for the entry to be made, even on the same day. There are some exceptions (eg, transfer of perpetual usufruct requires an entry in the land and mort - gage register). 2.4 Real Estate Due Diligence Depending on the type of transaction, due dili - gence is carried out by lawyers, tax advisers, environmental protection advisers, planning and spatial development advisers, and techni - cal advisers. As a result of the due diligence carried out, a report is drawn up. It can include the results of the full legal audit or, depending on the agree - ment between the buyer and advisers, may be limited to the presentation of only identified risks (so-called red flags). 2.5 Typical Representations and Warranties If the parties to the transaction do not exclude liability under the warranty, the seller will be lia- ble for physical and legal defects of the sold real estate pursuant to statutory provisions (ie, under the warranty for defects). Exclusion of warranty is permitted in professional (B2B) transactions. As the statutory warranty has a relatively limited scope considering the complexity of real estate transactions, the parties agree (in the agree - ment) upon the scope and content of the repre - sentations and warranties made by the seller, as well as the seller’s liability for them. Liability for representations and warranties does not arise from statutory law but is established by the par - ties themselves directly in the agreement, based on the principle of freedom of contract. The representations and warranties made by the seller are in each case tailored to the subject
of the transaction and remain correlated to the results of the due diligence carried out on the real estate. They typically concern the condition of the property being sold. By way of example, the submitted representations and warranties usually concern: • the legal title to the property; • real estate permits; If the parties to the transaction do not exclude liability under warranty for defects in the sold property, the representations and warranties made by the seller may establish additional lia- bility for the seller or serve as a detailed specifi - cation of the seller’s liability under warranty. In a significant number of transactions, the parties establish a list of representations and warranties on the one hand and – on the other – exclude liability under warranty, so that the representations and warranties become the sole and exclusive responsibility of the seller. In such cases, the parties typically regulate in detail the individual categories of representations and warranties (their groups), assign appropriate liability limits and define the duration of liability, understood as the maximum periods for raising claims. • environmental issues; and • tax and financial issues. It should be noted that a warranty and indem - nity (W&I) insurance is an increasingly common solution for the allocation of potential risks in transactions. It consists of insuring transaction risks related to the truthfulness of the seller’s representations and warranties made in the real estate sales contract.
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