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09 September, 2022

What is submission to enforcement as to payment of the price and delivery of the property?

Both in times of dynamic economic growth as well as in the cycle of a slightly weaker economic situation, many property owners ask themselves the question, how can they protect themselves in a matter of the price payment and the delivery of the property? One of the most frequently used solutions is to include in … Continued

Home Blog What is submission to enforcement as to payment of the price and delivery of the property?

Both in times of dynamic economic growth as well as in the cycle of a slightly weaker economic situation, many property owners ask themselves the question, how can they protect themselves in a matter of the price payment and the delivery of the property? One of the most frequently used solutions is to include in the contract a clause on submission of the buyer or the tenant to enforcement under a notarial deed pursuant to Art. 777 par. 1 point 4 or 5 of the Code of Civil Procedure. By referring to this legal act, such declaration can not only secure the payment of the price, but also the handing over of the property.

In practice, the provision allows the selling party to significantly shorten the legal path of pursuing the exercise of its claims or rights in the event of failure by the other party to comply with the terms of the contract; because in such case enforcement takes place directly from the notarial deed, without the need to carry out a long-lasting court trial.

The clause on submission to enforcement in the notarial deed gives the Seller or the Lessor who has not received the payment of the price within the specified time limit the opportunity to apply to the court for an enforcement clause. Having a notarial deed with an enforcement clause, we can apply to the bailiff with a request to initiate enforcement against the debtor in order to recover our debts.

However, there are situations when the buyer or the Lessee has many creditors, or most of his property is located outside Poland, in these cases enforcement may unfortunately be difficult. However, despite some disadvantages, the described solution is a tool that is often used by sellers or landlords to mitigate potential negative economic effects resulting from the actions of unreliable Buyers or Tenants.

At Leach & Lang we encounter the practice of including provisions related to submission to enforcement quite often in contracts used in real estate transactions.

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