Preliminary real estate sale agreement: 8 mistakes that can cost tens of thousands of zlotys

Published: August 7, 2026

The sale of a flat or house is very often preceded by a preliminary agreement. In practice, many people regard it merely as a formality before visiting a notary. Only when one party withdraws from the transaction does it become clear that the wording of the agreement is crucial to resolving the ensuing dispute.

One of the cases I am handling concerns precisely such a situation. The parties entered into a written agreement obliging them to conclude a real estate sale agreement by a specified date. They used a template found online which had not been adapted to their arrangements or circumstances. The buyer paid earnest money, but shortly before the planned execution of the notarial deed, disagreements arose over how the price was to be paid and how the parties’ earlier arrangements were to be carried out. As a result, the sale did not take place, and the parties entered into litigation lasting several years over the return of the earnest money, the legal nature of their agreement and the limitation of claims.

This case illustrates how a properly prepared preliminary agreement can often prevent costly litigation.

This article concerns Polish law. References to the Civil Code are references to the Polish Civil Code (Kodeks cywilny).

1. A reservation agreement and a preliminary agreement are not the same thing

Calling a document a “reservation agreement” does not by itself determine its legal nature. Whether it is a reservation agreement or a preliminary agreement depends primarily on its substance.

Under Article 389 § 1 of the Polish Civil Code, a preliminary agreement is an agreement by which one or both parties undertake to conclude a specified agreement in the future.

Therefore, if the parties specify, above all:

the subject matter of the sale, including in this case the precise location of the property and its land and mortgage register number,
the price,
the obligation to conclude the final agreement,

even a document entitled “reservation agreement” may be regarded by a court as a preliminary agreement.

A typical reservation agreement serves an entirely different purpose. Its purpose is to withdraw the property temporarily from the market and give the buyer a specified period in which to make a decision. As a rule, it does not yet oblige the parties to conclude the sale agreement.

It is therefore important to remember that, in any court dispute, the court will examine the true substance of the obligation, not merely the title of the document.

2. Concluding a preliminary agreement in ordinary written form is not a genuine cost saving

A preliminary agreement for the sale of real estate may be concluded in ordinary written form and will be valid.

This does not mean, however, that it will have the same effects as an agreement executed in the form of a notarial deed.

If the preliminary agreement was concluded only in writing, a party generally cannot successfully ask a court to compel conclusion of the sale agreement. The party is primarily entitled to the damages claim provided for in Article 390 § 1 of the Polish Civil Code or, depending on the agreement’s wording, to claims relating to earnest money.

Much stronger protection is provided by a preliminary agreement concluded in the same form as that required for the final agreement. In the case of a real estate sale, this means a notarial deed. The party may then seek conclusion of the sale agreement through the courts.

From a practical perspective, when a property is worth several hundred thousand zlotys, the apparent saving on the cost of a notarial deed very often proves illusory.

3. The price alone is not enough: the agreement should be worked out in detail

In practice, many disputes do not concern the price of the property itself, but matters which the parties did not regulate at all.

In the case I am handling, the parties agreed orally that the full price would be paid on the date the notarial deed was signed. For the seller, this was an absolutely fundamental condition. However, the agreement did not adequately reflect this arrangement, which later became the source of a serious dispute.

It is also worth regulating in detail such matters as:

the date on which possession of the property will be delivered,
the obligation to vacate the premises,
whether furniture is to be left or removed,
the cost of removing and disposing of it,
the method by which the price will be paid,
the deadline for the funds to be credited,
the consequences of late payment.

The more precise the agreement, the lower the risk of subsequent disputes.

4. A clause stating that “the buyer has inspected the condition of the property and raises no objections” does not exclude the seller’s liability

Preliminary agreements very often include a clause stating that the buyer has familiarised themselves with the property’s technical condition and raises no objections.

This does not mean, however, that the buyer automatically loses their rights under the statutory warranty for defects (rękojmia).

The buyer may still exercise their rights if hidden defects emerge, meaning defects that could not have been identified during an ordinary inspection. Depending on the type of defect, the buyer may demand that it be remedied, seek a reduction in the price and, in specified circumstances, even submit a declaration withdrawing from the agreement.

The seller is not liable only for defects of which the buyer knew when the agreement was concluded. In court proceedings, however, it is the seller who will have to prove that the buyer did in fact have that knowledge.

It is therefore advisable to draw up a detailed property inspection report before signing the preliminary agreement. A general clause confirming awareness of the property’s condition will not usually provide sufficient protection on its own.

5. Earnest money or an advance payment?

The parties decide whether an amount transferred is to be an advance payment (zaliczka) or earnest money (zadatek).

The distinction is fundamental.

If the parties intend to establish earnest money, the agreement should expressly state that the transferred amount constitutes “earnest money within the meaning of Article 394 of the Polish Civil Code”.

The amount of earnest money should also be reasonable. In practice, it most often represents a specified percentage of the sale price. It should not constitute most of the price or replace the entire sale price.

6. Failure to conclude the final agreement does not always entitle a party to claim the earnest money

Article 394 § 1 of the Polish Civil Code is frequently misinterpreted.

The mere fact that the agreement was not concluded does not automatically mean that the other party may retain the earnest money or demand twice its amount.

This provision applies only where the agreement was not performed due to circumstances for which one party alone is responsible.

For example, this may occur where the buyer assures the seller that the entire price can be paid immediately, but then, on the date scheduled for signing the notarial deed, asks for payment to be deferred by several days. Conversely, responsibility may lie with a seller who failed to prepare all documents necessary to conclude the sale agreement.

Article 394 § 3 of the Polish Civil Code must also be borne in mind. If the agreement was not performed for reasons for which both parties, or neither party, are responsible, the earnest money should be returned and there is no obligation to pay twice its amount.

It is also important that the right to retain the earnest money or demand twice its amount is linked to exercising the right to withdraw from the agreement. According to established case law, a declaration of withdrawal need not take one particular form. It may also be expressed in a demand for payment of twice the earnest money, or even in the statement of claim itself, provided that its content unequivocally demonstrates an intention to withdraw from the agreement.

7. Limitation of claims arising from a preliminary agreement

This is one of the issues most often overlooked.

Under Article 390 § 3 of the Polish Civil Code, claims arising from a preliminary agreement become time-barred one year after the date on which the final agreement was to have been concluded.

This applies not only to claims seeking conclusion of the agreement or damages but, according to settled case law of the Polish Supreme Court, also to claims relating to earnest money.

It is worth remembering that this one-year limitation period does not expire on the last day of the calendar year. If the final agreement was to have been concluded on 15 June, the limitation period will, as a rule, expire on 15 June of the following year.

8. What if the parties did not specify a date for concluding the agreement?

The Polish Civil Code also addresses this situation.

Under Article 389 § 2 of the Polish Civil Code, the date for concluding the agreement may subsequently be set by the party entitled to demand its conclusion. If both parties set different dates, the date specified first will be binding.

If, however, neither party sets a date for concluding the final agreement within one year from the date of the preliminary agreement, the right to demand its conclusion expires.

In practice, this also means that the one-year limitation period for the remaining claims arising from the preliminary agreement starts to run after that first year has elapsed. In other words, a failure to set a date for concluding the agreement does not cause the claims to remain open indefinitely.

Conclusion

A preliminary agreement is one of the most important documents in a real estate sale. Its wording will later determine whether the parties can effectively enforce their rights in court.

Before signing it, the parties should therefore take the time to refine all material provisions rather than relying solely on oral arrangements or ready-made templates downloaded from the Internet. A properly prepared agreement can often prevent years of costly litigation.