The Purpose of Real Estate Acquisition as a Criterion for Differentiating Purchaser Protection under the Developer Act

Abstract

The axiological premise underlying the enactment of the first Developer Act was the need to ensure enhanced protection for purchasers of residential property. The statutory concept of a “purchaser” corresponds to the civil-law notion of a consumer, which is premised on the existence of informational and economic asymmetry between the parties to a developer relationship. The point of departure for the analysis undertaken in this article is the observation that the Developer Act does not differentiate between the legal position of natural persons acquiring property in order to satisfy their own housing needs and that of natural persons acquiring property for investment purposes, in particular as a means of capital allocation. In the author’s view, such a legal framework may result in the provision of protection that is unjustified or even contrary to the purpose of the Act. The article seeks to demonstrate that an entity acquiring an additional property for wealth-preservation purposes does not occupy the position of the “weaker party” in a developer relationship and therefore does not require the special, enhanced protection afforded to purchasers under the Developer Act.

In particular, the article examines the merits of amending the Developer Act so as to permit the inclusion in developer agreements of clauses enabling the legal status of the property to be monitored following the transfer of ownership, as well as the possible introduction of a temporary restriction on the purchaser’s entitlement to derive financial benefits from the property, for example through a tenancy arrangement. The issues addressed and the proposals advanced are intended to initiate a discussion on the need to restore contractual equilibrium within developer relationships. Such a discussion should respect the principle of proportionality governing interference with consumer rights and should avoid the excessive extension of protection to entities that are not seeking to satisfy a genuine housing need.

This issue is of considerable significance from the perspective of research into the sustainable development of housing in Poland, understood as the balancing of the interests of the public sector and private actors, while simultaneously recognising the right to housing as a human right. A one-sided model of purchaser protection that fails to account for the investment-driven nature of certain transactions contributes to the entrenchment of housing thesaurisation, which, in the longer term, restricts the availability of residential premises and undermines the effectiveness of the State’s housing policy. The article forms part of a broader strand of analysis highlighting the importance of appropriately designed private-law instruments in the pursuit of public objectives, while emphasising the role of regulation governing developer relationships as one of the factors determining the sustainable development of housing.