Draft Amendment to the Real Estate Development Act
A draft amendment to the “Real Estate Development Act”[1], designated as UD361, has been added to the Council of Ministers’ list of legislative tasks. The draft provides for further strengthening the protection of buyers of apartments and single-family homes in the primary market and imposes new informational and organizational obligations on developers.
[1] Act of May 20, 2021, on the Protection of the Rights of Purchasers of Residential Units or Single-Family Homes and the Real Estate Developer Guarantee Fund (consolidated text: Journal of Laws 2026, item 880).
The draft is currently undergoing the consultation phase.
Key proposed changes:
1. Restrictions on the dissolution of a development company and liability of partners
For limited liability companies, as of the date of the company’s dissolution, liability under the warranty for defects in sold residential units will, by operation of law, pass jointly and severally to all shareholders, and any exclusion of this rule in the articles of association will be ineffective. In the case of simple joint-stock companies and joint-stock companies: dissolution of the company will be possible no earlier than 5 years from the date of delivery of the residential unit to the purchaser.
2. Prohibition on Price Increases After Contract Conclusion
The draft bill provides for a statutory prohibition on increasing the price of a residential unit or house, including price indexation to the detriment of the buyer. This would mean greater price stability after the conclusion of a development contract and the transfer of the risk of increased project implementation costs to the developer.
3. Expansion of the DOM Portal’s functionality
The draft bill provides for the expansion of the DOM Portal’s functionality to include information about developers, such as the history of their completed projects, details on delays, arrears in contributions to the Development Guarantee Fund (DFG), as well as specific information regarding proceedings, warnings, and actions taken by supervisory authorities. The goal is to make it easier for buyers to verify a potential contractor before entering into a contract.
4. More Detailed Information About Properties in Listings on the Developer’s Website
Developers will be required to publish, among other things, floor plans of the unit or house, specifying the dimensions of individual rooms; if illustrative furnishings are included in the floor plan, their linear dimensions must also be provided, along with floor plans of ancillary rooms. Visualizations and photographs not directly related to the offered development must be appropriately labeled.
5. Increase in the Amount of the Reservation Fee Refund
If a developer fails to fulfill an obligation under the reservation agreement, the refund of the reservation fee is to be increased from the current two times the fee to four times its amount. This measure is intended to limit situations in which a developer withdraws from a transaction, e.g., due to rising market prices.
6. Modification of the property acceptance procedure
The buyer is to be given the opportunity to submit an additional list of defects after acceptance, particularly following consultation with an appraiser or other specialist. The draft also provides for the mandatory presence of the developer or its representative during acceptance, as well as the buyer’s access to specific project documentation prior to acceptance.
How to Prepare Your Company for the Upcoming Changes?
Draft UD361 could significantly alter the practice of entering into and performing development agreements. The new rules regarding the liability of special-purpose entities will be of particular importance.
Once these changes take effect, developers may need to restructure their investment models, financing arrangements, and approach to risk management after the sale is complete.
If you have any questions regarding the upcoming amendment, please feel free to contact us!
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