POLAND Law and Practice Contributed by: Michał Wielhorski, Mateusz Prokopiuk, Małgorzata Wąsowska and Klaudia Michalec, act legal Poland
accepted market standards have developed in the practice of commercial leases. As regards the length of the lease, according to the Civil Code, a contract may be concluded for both a fixed and indefinite term. Nevertheless, the dominant practice is that of concluding com - mercial premises leases for a fixed term – the standard being five-year leases with an option of renewal (mainly owing to limited options for early termination of an agreement concluded for a fixed term). With regard to the maintenance and repair of a commercial property, the obligations of the par - ties are usually regulated in detail in the body of the lease agreement. The tenant is responsible for minor repairs and maintenance of the prem - ises resulting from ordinary use. In accordance with Article 681 of the Civil Code, this includes repairs to floors, doors and windows, the paint - ing of walls, and ongoing servicing of technical installations. At the same time, tenants often incur costs for much larger expenditures in the form of improvements to the premises, especial - ly when the premises are handed over without finishing work (core and shell) or require adapta - tion to specific purpose. As for the frequency of rent payments, monthly billing is the predominant solution in commer - cial lease contracts; this is primarily due to the requirements of financing banks. Additional ser - vice changes are also a common feature in the market practice of commercial leases in Poland. 6.5 Rent Variation In the case of leases of commercial premises, the amount of rent throughout the duration of the lease may change, depending on the provisions of the lease itself and the legal measures used. Pursuant to the Civil Code, the landlord has the
right to unilaterally increase the rent, which is regulated by Article 685(1) of the Civil Code (but it is possible to make a provision in the lease agreement for exclusion of this regulation). An important aspect is that such a change may take place without the tenant’s consent. Furthermore, a rent indexation mechanism is often introduced in commercial leases. The indexation may be effected on the basis of offi - cial indices, such as: • the Harmonised Index of Consumer Prices (HICP) published by Eurostat; or • the annual average consumer price index announced by the Polish statistics office (Sta - tistics Poland). In respect of shopping centres and retail parks, the tenant is often required to pay a turnover rent, in addition to the base rent. 6.6 Determination of New Rent As specified in 6.5 Rent Variation , it is possible either for the landlord to: • unilaterally increase the rent amount in accordance with a statutory regulation – although the lease agreement may provide for the regulation to be excluded; or • make a provision in the lease agreement for an index (eg, the HICP) – based on which, the rent indexation is effected. Turnover rent is determined on a case-by-case basis by the turnover generated by a tenant on
the leased premises. 6.7 Payment of VAT
In the Polish legal system, the lease of non- residential premises is generally subject to VAT
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