Buying a second hand apartment – can you get out

Buying a second-hand home is a very serious decision. For many people, it involves the biggest expense of their entire life. What is more, there are many other offers available on the market, which are sometimes very competitive. It is hardly surprising that some people change their decision to buy an apartment. Sometimes the change in plans for an apartment is also due to a negative credit decision from the bank. This is an important issue, as information coming from national banks indicates that lenders have tightened the rules on housing finance. Regardless of the reason, the buyer’s decision to give up the apartment or house always causes some complications.
Banks’ requirements for a preliminary agreement make it necessary to sign a preliminary agreement at a relatively early stage of the transaction. Concluding a preliminary agreement can be avoided if the buyer (who is for example an investor) has funds “in cash” and is pressing for a quick purchase of a used apartment or house.
It is worth realizing, however, that in case of a secondary market transaction, the parties are free to draft the preliminary agreement. This is due to the fact that during the sale of a used property the regulations of the Developer’s Act do not apply. Moreover, the sale of a second-hand apartment or house to another individual does not have a consumer character. Thanks to the freedom of contract, it is possible to work out a solution that will properly secure the interests of both parties. In virtually every situation, the seller of an apartment will want the preliminary agreement to provide for a deposit, which is essentially non-refundable as opposed to a refundable down payment. With a deposit as defined by Article 394 of the Civil Code, the seller is able to keep the money if the other party dissents.
Withdrawal from the preliminary agreement and retention of the down payment is possible after the deadline for the sale of the property has passed.
Potential buyers often fear that their money (paid as a deposit) will be lost if the bank issues a negative credit decision preventing the purchase of the apartment. A seller can dispel such doubts by introducing a clause into the preliminary agreement providing for return of the down payment in case of a negative and properly documented credit decision from several banks. A real estate agency should help to properly formulate a preliminary agreement that will secure the interests of both parties.
It is also important that the preliminary agreement provides for a sufficiently long period of time for the conclusion of the agreement transferring the ownership of the apartment.
The inclusion in the preliminary contract of a clause ensuring the return of the down payment after a negative credit decision of the bank may help to avoid litigation with a person who planned to buy a second-hand apartment. Such a person sometimes cannot reconcile himself/herself to the loss of the down payment amounting to several thousand zlotys and tries to recover it in court.

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