Liability of the developer for defects in the common property parts is a substance that we meet very frequently in practice. Residents of real property acquired on the primary marketplace note the first defects in common parts usually in the first year after surviving in the building. To the most common defects in common property parts include:
- flooding and moisture of underground garages, causing mould fungi to appear and degradation of method condition of garages,
- leaks on walls under terraces,
- crackling facades, defects and harm to plaster on the facade,
- defects in ventilation ducts, heating systems, water and sewage systems,
- water leaks through dilation,
- access of groundwater to elevator shafts,
- cracking tiles on stairways,
- lacks of tube seals at passages through the ceiling,
- leakages from the patio,
- noise problems.
Our experience shows that specified cases are coming – housing communities are increasingly bringing to courts lawsuits against developers and win cases, frequently getting compensation of hundreds of thousands of zlotys.
This Article aims to approximate the rules claims for defects of part of common property by housing communities. The text addresses the following issues:
- who is entitled in practice claims against the developer?
- what types are claimsExistingwithdeveloper?
- how it should be constructed action against the developer?
- what they are time limits for claims against the developer?
Housing community – suit against developer
Housing community is the organisational unit referred to in Article 33(1) of the civilian Code created by the general owners of the premises of the building concerned. Consequently, Housing community may get rights and undertake obligations, as well as sue and be sued. Is it so within the legal capacity of the housing community, the community can get property owners' rights towards the developer related with defects in common property revealed in the process of utilizing the building?
Note that warranty claims only purchasers of goods (location) are entitled. This rule follows straight from Article 556 of the civilian Code according to which the seller (the developer) is liable to the buyer (the buyer of the premises), if the item sold (local) has physical or legal defect. Each of the purchasers of premises located in the building is so entitled to claims against the developer due to the fact that it has a stake in the full construction investment. In accordance with Article 209 of the civilian Code, each of the co-owners may execute any activity and prosecute any claim which seeks to preserve the common law. These activities are referred to as ‘behaviour“, and thus those whose intent is to defend the law against possible danger – specified as the threat of building construction. This position is besides reflected in the case law of the courts, for example in the ultimate Court order of 21 June 2013 (Case I CZ 53/13) The Court of First Instance concluded that, in accordance with Article 209 k.c., each of the co-owners may execute any activity and prosecute any claim which pursues the maintenance of a common law. Housing communitya to which effective co-owners of parts of the common building have transferred their rights to exercise warranty rightsand which leads to the removal of the building's defects, can so undoubtedly come up with specified a claim.
- Example: Mr Adam Kowalski acquired a housing facility in a block where there are 100 apartments, which gives him a share of 50.000 in the full property. Mr Adam Kowalski may claim from the developer for flooding the underground garage in which the car is parked and for breaking tiles on all the staircases of the building.
In the past, courts have looked at applicable issues in different ways. with an active housing community card and possible effective redress of developersby housing communities. The fundamental plan of the present case-law line took place in the ultimate Court judgement of 29 January 2014 (Event III CZP 84/13). In a judgement taken in the composition of 7 judges, the Court held that the owners of premises located in the real property may, on the basis of a transfer agreement, transfer to the housing community the rights they enjoy vis-à-vis the developer in connection with the physical defects of the common property.
This position was subsequently confirmed in many judgments of the general courts. For example, the Court of Appeal in Katowice in its judgement of 19 August 2016 (Event mention I ACa 196/16) ruled that ‘The community has a card to claim claims transferred to it by transfer. Transfer of claims of each of the joint owners creates a material card. Each of them has a ‘partial’ right to claim these claims, determined by the size of the share in the common property, and the origin of these claims is the contract of sale of the premises. (...) These claims can be transferred to any 3rd party, including the housing community.”
- Example: the cost of repairing the leaking roof of the building is PLN 100,000. Residents (members of the housing community) whose full share of the common property is 70% have transferred claims to the housing community. Consequently, in the course of legal proceedings, the housing community may claim a sum of PLN 70.000 from the developer (i.e. 70% of PLN 100,000). Thus, the more assignment contracts are concluded between residents and the housing community, the greater the amount can be obtained from the developer.
It can so be concluded that the ultimate Court ruling cited above has been a breakthrough for many housing communitiesand it is now apparent that the housing community may apply in a court process against the developer in a case for defects in the common property parts. It is uncommon for only 1 or respective inhabitants to be curious in removing defects in part of the common property. Therefore, in practice, residents act together by transferring claims against the developer to the housing community.
In practice, however, it is highly crucial that before submitting lawsuit against the developer, members of the housing community have adopted the following resolutions:
- a resolution authorising the management of the housing community to undertake activities exceeding the scope of the average management of the common real property — the conclusion of agreements for the assignment of claims to individual owners of premises to remedy harm to the defects of the common real estate,
- a resolution authorising the board of the housing community to take action to claim from the developer,
- a resolution authorising the management of the housing community to grant a procedural power in the case.
Housing community – claims against developer
The housing community may challenge the developer in 2 modes. First, on the basis of provisions of the civilian Code concerning warranty (Article 560 of the civilian Code and subsequent provisions) compensation for improper performance of contractsy (Article 471 of the civilian Code). This position is confirmed in many judgments of the General Courts, for example the Court of Appeal in Łódź in its judgement of 2 September 2014 (Event mention I ACa 186/13) ruled that ‘attributing rights to purchasers warranty due to defects in the subject substance of sale do not deprive him of the right to search the best compensation for himself under the circumstances. The purchaser may so exercise his or her rights in respect of warranty for defectsBut he can besides request compensation for actual injuryHe suffered from a faulty thing. The claim for compensation in this situation does not request to be preceded by an effort to usage the warranty.’
It is besides crucial that the usage of the warranty under Article 560 of the civilian Code and subsequent rules does not preclude damages from being made on a general basis, which is confirmed in many judgments of the courts. For example, the Court of Appeal in Katowice in its judgement of 2 May 2011 (Event I ACa 269/11) ruled explicitly that Article 566 § 1 k.c. the legislature introduced only for this purpose, in order to emphasise that the usage of the warranty does not exclude another claims arising from the contract concluded, in peculiar compensation claims. There are no obstacles to a buyer who neither withdraws from the contract nor requests a simplification in the price being able to make a claim in accordance with Article 471 k.c. for improper performance of the sale contract.
- Claims under the seller's warranty for physical defects of goods sold (real estate) against the developer (Articles 560 and subsequent civilian Code)
Pursuant to Article 560 of the civilian Code, if the goods sold (the property) have defects, the buyer may retreat from the contract or request a simplification in the price. In practice, from the point of view of the residents of the property, if building has defects in common parts, initially the most effective solution will usually be an application to the developer requesting removal of building defects. Residents may besides make a declaration of will to reduce the price proportional to the failure of value of the building due to defects, and if the full amount has been paid to the developer's account they may request reimbursement of the proportional part of the amount. Therefore, in practice, the price simplification should correspond to the value of the work needed to reconstruct the building to appropriate method condition. As the ultimate Court noted in its judgement of 11 December 2009 (Event No V CSK 190/08), claim for price reduction it does not straight address the issue of harm to the property of the buyer of the premises, but that the price of the premises free of defects does not correspond to the price of the premises affected by the defects. It is besides worth noting that in any situations in practice it is pointless to repeat calling the developer to remove defects and the more effective solution seems to be to bring an action.
- Claims for compensation for physical defects of goods sold (real estate) against the developer (Article 471 of the civilian Code)
The housing community may besides claim compensation resulting from improper performance of the contract pursuant to Article 471 of the civilian Code, according to which the debtor is obliged to make good the harm resulting from the default or improper execution of the undertaking, unless the failure or improper execution is simply a consequence of circumstances for which the debtor is not liable. It is besides clear that the injured individual can choose whether to search compensation for harm in kind or whether he prefers to pay an appropriate monetary amount. Article 471 of the civilian Code does not in any way specify how harm should be corrected. Thus, the principles laid down in Article 363(1) will apply. There is no uncertainty about the above: “The repair of the harm may take place either by the restoration of the erstwhile condition, or, most often, by the payment of an appropriate monetary sum – compensation (Agnieszka Rzetecka-Gil, civilian Code). Comment. Commitments — General part, LEX/el 2011.)
Housing community – process for defects – plan of the lawsuit
If Housing community He'll decide he wants to. request the developer to repair the defects,
the application should cover the scope of the corrective work as precisely as possible. In the light of the above, before submitting an action, it is recommended to get an independent method opinion indicating the nature of the defects and how they are removed.
- Example: we request that the developer, XYZ sp. z o.o. be ordered to carry out the following works aimed at removing in the residential community “Our Home”, located at ul. Wyczynkowa 1 in Warsaw property defectscommon, consisting of:
– a defective finish made of resin with sprinkles on 2 slides leading to the underground garage by removing the defective surface and making a fresh surface of this slide utilizing resin with sprinkles.
– the position of the defective, i.e. scratched and discolored concrete cube, forming a sidewalk of about 8 m2 at the entrance gate to the underground garage of the building by removing the defective concrete cube and the location of the unbroken, unpaved and uncoloured cube;
– incorrectly safe the drainage of water from the roofs of the building due to the deficiency of protection of 8 vomiters located on the roof of the building at cages: K, L, M, N, O, P, R, S from the fall of stones/swir from the roofs by protecting the abovementioned gnomes and spits from falling stones/swir from the roof.
If, for any reason, the Court of First Instance dismisses the request for remedying the defect, a possible application for remedying the defect should besides be for thesettlement from the developer to the housing community of cash amounts the amount corresponding to the value of the individual repairs.
- Example: we request that the following amounts be judged by the developer, XYZ sp. z o.o.
– amounts of PLN 30,000 as a work to remove faulty surfaces and make a fresh surface of this slide utilizing resin with sprinkles
– the amount of PLN 25,000 as the title of works aimed at removing defective concrete cubes and the location of the unbroken, undrawed and uncolored cube
– amounts of PLN 27.000 as collateral for 8 vomiters located on the roof of the building at cages: K, L, M, N, O, P, R, S from the fall of stones/swir from the roofs by protecting the abovementioned gnomes and spits from falling stones/swir from the roof.
For more information on the rules for formulating a lawsuit, see right here..
Claims against developer – limitation of claims
According to Article 568 k.c. § 1 of the civilian Code, the seller shall be liable for the warranty if a physical defect is established before the expiry of 2 years and, as regards property defects, within 5 years of the date of issue of the goods to the buyer. The issue of the items to the buyer should be understood to mean the day of the first place from the purchaser. However, where Housing community decide to prosecute its claim under Article 471 of the civilian Code, then the claim shall expire within 10 years from the date of the discovery of the building defect (so the ultimate Court in its resolution of 22 November 2013, act No III CZP 72/13).
A suit against the developer – safeguarding claims
In many cases, in peculiar due to the nature of the defects, it may besides be in the interests of the housing community to submit a claim for the protection of claims. More information on the mechanics can be found right here..
Commentary of the Capital Legal Office
Liability of the developer for defects in the common property parts is a problem that affects many housing communities. According to our practice, the first property defects they appear as early as the first year after the developer surrenders the property. Residents then have 2 claims that they have against developers – provisions of the civilian Code on Guarantees and rules on compensation for improper performance of the contract by the developer. However, it should be remembered that according to settled court case law, the first step should be assigning claims to the housing community, the adoption of a resolution of the housing community authorising the board to take action to search claims from the developer and a resolution authorising the board to grant a procedural power on the case.
If, after reading the article, you would like to get more information on applicable issues in claims from developers, please contact us.
