Physical Defects in Real Property

It sometimes happens in conveyancing that the actual area of the land or property differs from the area initially declared by the owner, or even from the area registered in the official documents (the land and mortgage register or the land register).  Most often the difference is disclosed in a survey and then the parties make a relevant price adjustment. Specifically, in the case where the area of land is misrepresented by the seller, the transfer price will be reduced.

However, even if no survey is made (for whatever reason), the buyer still enjoys legal protection if the property (or premises) is smaller than declared – the buyer can make a claim for a physical defect against the seller (Article 556 § 1 of the Polish Civil Code).

In the latest decisions of the Polish Supreme Court, the judges directly stated that any difference between the actual area of real property and the area declared in the property purchase agreement is a physical defect within the meaning of Article 556 § 1 of the Civil Code (a judgment of the Supreme Court of 25 February 2022, II CSK 109/22).

In this case, it does not matter whether the seller was aware that the premises are actually smaller than contractually declared or registered in the official documents (since the seller’s liability under warranty for physical defects is based on statutory implied warranty, so the seller’s subjective knowledge on the transferred property is not relevant to a claim for defects).

In this situation, the claim most in line with the buyer’s material interests is a price reduction (Article 560 § 1 of the Civil Code). The buyer’s claim to restore the equality of mutual considerations in the contract by adjusting the price actually paid by the buyer to the price that should have been paid for the property (premises) with a smaller area. If the seller fails to refund the money voluntarily, the buyer may bring a claim before court.

Please note that claims for property defects expire five years after the release of the property to the seller (Article 568 § 1 of the Civil Code) –  if the defect is detected later, the buyer will no longer have claims under statutory warranty (though may attempt to make a claim on other legal grounds, specifically for underperformance of the contract, but this may be more difficult to process).

Naturally, the buyer will not have any claims against the seller if the buyer was aware that the area of the transferred property is smaller than declared or registered (Article 557 § 1 of the Civil Code).