1. DEFINITION OF REAL ESTATE

Real estate are parts of land surface that constitute separate property subjects (land), as well as buildings permanently fixed to the ground or their parts, if, under specific regulations, they constitute a separate subject of ownership

2. SCOPE OF LEGAL REGULATION

Execution of real estate debts encompasses:

• 1) real estate execution,
• 2) simplified real estate execution,
• 3) fractional real estate execution.

Regulations concerning real estate execution are respectively applicable to:

• 1) perpetual usufruct execution,
• 2) execution of premises constituting a separate property,
• 3) execution of cooperative member’s right of ownership of premises,
• 4) execution of sea vessels listed in a ship register,
• 5) execution by means of vending a company or farm.

3. COMPETENCE OF THE LAW ENFORCEMENT AUTHORITY

Property execution is the duty of the judicial officer attached to the court in whose jurisdiction the property is located. When real estate execution takes place, provisions of law do not allow the possibility to select the judicial officer in the Republic of Poland.

4. DUNNING NOTICE, ENTRY INTO THE LAND REGISTER

Simultaneously with the notice being sent to the debtor, the judicial officer sends, to the court of competent jurisdiction for keeping the land register, an application to make an entry into the land register, concerning the execution being in progress, or to submit the application in the document collection. Upon application from the creditor to commence execution from the property mentioned in the application, the judicial officer calls the debtor to repay the debt within two weeks, otherwise a description and valuation procedures will be commenced.

5. TRUSTEE FOR ABSENT PARTIES

In order to secure the rights of an individual whose place of residence is unknown, and who - due to his/her absence - cannot receive notices, the court, upon an application from the judicial officer establishes a trustee to represent the absent party. The trustee will perform his/her duties also in the interest of other individuals who cannot receive notices, during the further course of proceedings. The trustee may, however, represent several individuals jointly only when their interests do not collide.

6. CONSEQUENCES OF REAL ESTATE ATTACHMENT

Disposal of the property after it has been attached, has no influence on further proceedings. The purchaser may participate in the proceedings in the capacity of a debtor. Each time, execution proceedings are valid both with respect to the debtor and the purchaser.

Disposal of items subject to attachment along with the property, after the attachment took place, is not valid.

7. ADMINISTRATION OF THE ATTACHED PROPERTY

The attached property is administered by the debtor, to whom regulations concerning administrators will then apply.

If the correct administration so requires, the court may take away administration from the debtor and will establish another administrator; same applies to the administrator so established.

8. PROPERTY DESCRIPTION AND VALUATION

After the period indicated in the dunning notice elapses, the judicial officer, upon demand of the creditor, will prepare a description and valuation of the property. The aforementioned period is 14 days.

The judicial officer, in the description and valuation protocol, will include the following:

• 1) the property code, its boundaries, and, if possible, its area and heading from the land register or document collection,
• 2) buildings and other facilities, indicating their economic designation and property fixtures, as well as supplies subject to attachment,
• 3) disclosed rights and encumbrances,
• 4) insurance agreements,
• 5) individuals who are in possession of the property, its fixtures and profits a prendre,
• 6) manner in which the debtor is using the property,
• 7) with the quotation of its basis,
• 8) reported rights to the property,
• 9) other details relevant for the marking or valuation of the property.

The property valuation is carried out by an expert, authorised to valuate real estate properties in keeping with separate regulations. If, however, the property was, within six months before the attachment took place, valuated for commercial purposes, and this valuation conforms with requirements concerning property valuation during property execution, then a new valuation is not carried out.

9. PROPERTY BIDDING

The attached property is sold in the course of a public tender. The bidding date may not be appointed earlier than after the lapse of two weeks after the description and valuation become legally valid, and not before the decision on whose basis the execution is launched becomes legally valid.

The judicial officer will notify of the bidding through a public announcement, in which he/she should mention:

• 1) the property to be sold, indicating its location and economic designation, name and surname of the debtor with the land register number and its storage location, or with the heading in the document collection, defining the court with which this collection is held,
• 2) bidding time and venue,
• 3) valuation sum and reserve price,
• 4) value of the bid bond that the bidding participant should submit, with the option for the bond to be submitted in the form of a savings book, with an authorisation of its holder to disburse the deposit in its entirety, in accordance with a legally valid court decision concerning the loss of bond, or in another manner indicated by the judicial officer;
• 5) the period during which the property can be visited two weeks before the bidding and during which documents form the execution proceedings can be inspected in the court.

Moreover, the announcement should specify:

• 1) that rights of third parties will not impede the bidding and legal conveyance of ownership rights to the purchaser without reservations, if these individuals, before the bidding commences, fail to produce evidence that they brought an action to exempt the property or items attached along with it from execution and obtained a decision suspending the execution in this respect;
• 2) that the use, easements and life annuitant’s rights, if they are not disclosed in the land register or by adding a document to the document collection and they fail to be reported within a maximum of three days before the bidding, will not be taken into account in further execution proceedings and will expire the moment that the decision awarding ownership becomes legally valid.

The bidder is obliged to submit a bid bond, to an amount of one-tenth of the valuated price not later than one day before the bidding date.

The lowest sum for which the property can be purchased at the first bidding (reserve price), amounts to three fourths of the valuation price and two thirds of the valuation sum at the second bidding.

The bidding takes place publicly, in the presence and under the supervision of a judge.

After the bidding is called, the judicial officer publicly announces:

• 1) the bidding subject,
• 2) the reserve price,
• 3) the bid bond value,
• 4) the date on which the purchase price needs to be paid,
• 5) overdue sums with which the property is encumbered, such as national taxes or other public fees, if these sums have been notified of, explaining which of them will be transferred onto the purchaser without being included into the purchase price,
• 6) rights encumbering the property, which will remain in force with and without being included in the purchase price,
• 7) changes in the actual and legal status of the property, resulting from documentation, if these occurred after its description and valuation.

The following individuals may not participate in the bidding: the debtor, the judicial officer, their spouses, parents and siblings, and individuals present at the bidding in their official capacitates; the bidder who failed to fulfil the conditions of the previous bidding, individuals who may purchase properties only upon authorisation issued by an official body and who failed to produce such authorisation.

The presence of a single bidder is sufficient for the bidding to take place.

If no bidder appeared at the first bidding, the judicial officer, upon the creditor’s demand, will announce the second bidding, at which the reserve price constitutes two thirds of the valuation price. This price is the lowest at which the property can be bought at the second bidding.

After the bidding closure, the court represented by the judge supervising the bidding, issues, in open Court, a decision concerning the winning bid for the bidder who offered the highest price, having heard him/herself and the participants present.

In the winning bid decision, the name and surname of the purchaser, property code, bidding date and purchase price need to be mentioned.

After the winning bid becomes legally valid, and when the purchaser has complied with the bidding conditions, the court issues a decision to grant ownership.

A legally valid decision to grant ownership results in the conveyance of ownership onto the purchaser, and constitutes the title to disclose the purchaser’s ownership right in the cadastre, and in the form of an entry into the land register, or by including a document in the document collection. A legally valid decision concerning the granting of ownership constitutes a writ of execution to convey the ownership right onto the purchaser, and to vacate the rooms located on the property without ordering that an execution clause should be applied.

Immediately after the sum subject to division is transferred onto the court’s deposit account, the judicial officer draws up a draft plan to divide the sums obtained from the property execution and submits it with the court. If necessary, the court introduces changes and amendments to the plan; otherwise, it approves it.

10. RESPECTIVE APPLICATION OF PROPERTY EXECUTION REGULATIONS

Regulations concerning property execution apply to the execution from property fractions, as well as to execution from perpetual usufruct.

Regulations concerning property execution apply also to non-developed land properties, and to properties with a residential or commercial building, if, at the moment at which an application for execution is filed, no notification was submitted, concerning the construction completion.

Regulations concerning property execution also apply to execution from sea vessels entered into ship registers.