The developer contract is the most important document in the whole process of buying an off-plan apartment. You commit to an obligation worth hundreds of thousands of zloty, often before the building exists. It is worth knowing exactly what to check, which clauses can surprise you and what to negotiate. Here is a practical checklist, point by point.
What a developer contract is and why it matters
In the guide on how to buy an investment apartment step by step, the developer contract was one stage of the process. Here we break it down into its parts: specific clauses, red flags and points to negotiate. This is a deep dive into one stage, not a repeat of the whole buying process.
A developer contract is an agreement with the developer to buy a property that is still being built or is under construction. It regulates both sides’ obligations: the developer’s to build and transfer ownership, the buyer’s to pay. In Poland it is governed by the developer act, which gives buyers certain guarantees, including protection of the funds paid in.
It is a document you often sign many months before you receive the keys. Everything you put in it, or overlook, will bind you throughout construction and at handover. That is why a careful analysis is not a formality but the safeguarding of a substantial investment.
The escrow account: the first thing to check
The developer act requires buyers’ payments to go into an escrow account, which protects them in case of the developer’s problems. There are two types of such account, and the difference matters for your safety.
- Open escrow account – the developer receives funds in tranches, as construction progresses. The bank checks progress before releasing the next tranche
- Closed escrow account – the developer receives the full amount only after ownership is transferred to the buyer. This gives the buyer the highest level of protection
Check which type the contract provides for. A closed account offers greater security, but an open one is more common. It is worth understanding what protection you really have, and how the bank controls the release of funds with an open account.
Payment and deadline schedule
The contract sets out when and how much you pay, and when the developer commits to deliver the property. Pay attention to a few things:
- The tranche schedule – whether payments are tied to real construction progress or simply to the passage of time
- The delivery date – a specific date for transferring ownership, not a vague quarter with no commitment
- Penalties for delay – whether the contract provides compensation if the developer delivers later than stated
- Consequences of your delay – what happens if you are late with a tranche payment
Asymmetry can be a problem here. Sometimes a contract treats the buyer’s delays harshly and the developer’s leniently. It is worth noting this and, if necessary, negotiating more balanced terms.
Finishing standard: what exactly you get
One of the most common areas of misunderstanding. The contract and annexes should precisely define the finishing standard, ideally in a measurable way rather than in vague slogans.
Instead of phrases like “high standard”, look for specifics: which materials, which manufacturers or classes, what equipment is included in the price and what is an optional extra. The more measurable the description, the lower the risk of disappointment at handover. A well-prepared contract includes a detailed standard as an annex.
Clauses on changes to the project
Construction takes months or years, and developers sometimes reserve the right to make changes to the project. Check how broad these rights are. Can the developer change the layout, the floor area, the standard of common areas without your consent? Which changes require the buyer’s approval, and which can the developer introduce unilaterally?
Reasonable contracts allow minor, insignificant technical changes but protect the buyer from significant changes to the floor area, layout or standard without their consent. Overly broad rights for the developer to make unilateral changes are a warning sign.
The operator agreement as an annex
For an apartment in a condo hotel, the agreement with the rental operator is as important as the developer contract itself. Check whether it is available as an annex or at least in draft form at the purchase stage.
The key points to check in the operator agreement are the revenue split, the length of the agreement, the rules for payouts, the scope of the operator’s duties, the costs borne by the owner and the terms of the owner’s access to the unit for their own stays. It is the agreement that will really determine your income from the investment.
Checklist: a quick summary
Before you sign a developer contract, check:
- The escrow account type (open or closed) and the rules for releasing funds
- A payment schedule tied to construction progress
- A specific delivery date and penalties for the developer’s delay
- Symmetry in the consequences of delays for both sides
- A measurable finishing standard in an annex
- The scope of the developer’s rights to change the project
- The availability and content of the operator agreement
- The land registry entry and the legal status of the property
Have questions about the developer and operator agreements at Sky Resort?
A Sky Resort advisor will walk you through the documentation and explain every clause. We operate in line with the developer act, with buyers’ funds in an escrow account. We also encourage you to consult the contract with your own lawyer. The first conversation is free.
Talk to an advisorFrequently asked questions
Do I have to sign the developer contract before a notary?
Yes. In Poland a developer contract requires the form of a notarial deed. The notary ensures the contract complies with the law but does not negotiate its terms on your behalf. It is worth commissioning a lawyer to analyse the content in light of your interests before the notary visit.
What does the developer act give me?
The developer act imposes on the developer obligations that protect the buyer, including running an escrow account for payments, information duties and certain contract standards. It is an important safeguard, though it does not remove the need for a careful analysis of the specific contract.
What do buyers most often overlook?
Most often the asymmetry of late penalties, a vague description of the finishing standard, the broad scope of the developer’s rights to change the project and the content of the operator agreement. These are areas worth checking especially carefully.
Can I negotiate the terms of a developer contract?
To some extent yes, although developers often work from standard templates. It is worth trying to negotiate especially the late penalties, the finishing standard and the rights to make changes. A lawyer will help identify which clauses are unfavourable and worth negotiating.
Do I need a lawyer for a developer contract?
It is not mandatory, but strongly recommended for an investment of this value. A lawyer specialising in real estate will catch unfavourable clauses that a layperson might miss. The cost of a consultation is small compared with the value of the transaction.
