Institutional lease leading to acquisition of ownership (Part 1)

The institutional lease leading to acquisition of ownership is a new type of the tenancy agreement which has been introduced to Polish law as of 7 August 2018. The provisions on the institutional lease leading to acquisition of ownership have been laid down in the Act of 21 June 2001 r. on the protection of tenants’ right, municipal housing resources and amendments to the Civil Code (Art. 19k–19s). The new provisions are generally based on the statutory regulation of the institutional lease (cf. Art. 19f–19j of the said Act), with one crucial difference, which is the obligation of both parties to the tenancy agreement to conclude a contract on transfer of the ownership title to the premises to the tenant. The article discusses the nature of the new type of institutional lease, mutual obligations of both parties as well as essential elements of the agreement. The author comments in particular the regulation concerning the mortgage established by the landlord for the benefit of the tenant in order to secure the tenant’s future claim against the landlord to return the sales price in case of failure to fulfil the obligation to transfer the ownership title to the tenant.