Polish UOKiK will investigate valorization clauses in the real estate development industry

5 January 2023

Chairman of the Office of Competition and Consumer Protection (UOKiK) Tomasz Chróstny has launched a market investigation into the use of so-called “valorization clauses” in the development industry, the Office said. Eighty-seven entrepreneurs have received calls for information and necessary documents, and an investigation is already underway against one.

“Contracts should be formulated unambiguously and regulate the relationship between the parties in an understandable way. Consumers have the right to know what obligation they are entering into, what specific terms they agree to. The developer’s power to change the price must not lead to an abuse of its position by disproportionately burdening consumers with the consequences of changes in economic conditions in the market,” said UOKiK’s Tomasz Chróstny.

The UOKiK acknowledges that the Development Act does not prohibit the use of valorization clauses, but points out that, one should be very careful with such provisions in contracts.

In the face of high inflation, the cost of construction materials and workmanship, and the associated possible delays, developers may try to seek protection against the loss of profitability of the investment. However, this should not be at the expense of consumers, by passing on to them the negative effects of the complex economic situation, it stated.

“We will each time examine contractual provisions on valorization clauses for their abusiveness, and we advise consumers to analyze signed documents very carefully,” added Chróstny.

Source: UOKiK and ISBnews

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