Overview of retail lease agreements in Poland

Polish Civil Code.

The duration of the retail lease agreement is freely negotiated between the parties. There is no minimum duration for retail lease agreements, but its initial term may not exceed the maximum duration of 30 years.

The landlord may terminate lease agreements concluded  for a definite term if the tenant is in arrears regarding payment for two rental periods despite a grace period of one month.

Additionally, the landlord may terminate the lease agreement with immediate effect if (i) the tenant uses the premises contrary to the lease or contrary to the purpose of the premises and does so despite written notice from the landlord, (ii) the tenant neglects the premises to such an extent that the premises are at risk of being damaged or (iii) the tenant grossly or persistently violates the house rules or, by its inappropriate behavior, renders the use of other premises burdensome.

The lease agreement may provide for other specific possibilities for early termination by the landlord.

The tenant may terminate a lease agreement concluded for a definite term if any defects in the premises constitute a danger to the health of the tenant or persons employed by it.

The lease agreement may provide for other specific possibilities for early termination by the tenant.

There is neither a right of renewal nor an eviction indemnity payable by the landlord.

The landlord is entitled to review the rent at any time upon one month’s notice. Retail leases usually exclude the application of that provision. Instead, the parties usually provide for indexation based on the consumer prices index.

There are no mandatory provisions regarding  fitting-out works.

The tenant is obliged to return the premises in a non-deteriorated condition, allowing for normal wear and tear. If the tenant improves the premises, the landlord, unless otherwise agreed, may either keep the improvements against due compensation for their value at the time of the return or demand that the previous condition be restored.

The tenant requires the landlord’s consent to assign the lease (transfer of rights and obligations under the lease agreement). The tenant may sublease the premises if the lease agreement does not prohibit it. 

The lease is binding on the new owner in the case of the sale or any other transfer of ownership of the premises. The new owner may terminate even a fixed term lease in accordance with the statutory notice periods unless the lease agreement has been concluded for a definite period of time while observing the written form with a notary certified date and the premises have been already delivered to the tenant.

A tenant in a shopping centre has no statutory preemption right in the case of the sale of the premises.

There are no mandatory provisions regarding the form  and/or duration of a rental guarantee.

In retail lease agreements, the parties are free to agree whatever they deem appropriate in relation to the maintenance and repair of the premises. If nothing is set out in the lease agreement, as a principle, the landlord shall hand-over the premises to the tenant in a state appropriate for the purpose it was leased and maintain it in such a state through the entire period of lease. However, minor repairs connected with normal use of the premises are performed by the tenant. Those minor repairs include especially minor floor, door and window repairs, painting of walls, floors and the inner side of entrance doors, as well as minor repairs to installations and technical equipment ensuring lighting, heating, and water supply and discharge.

In practice, the landlord usually recharges the costs for major, structural repairs to the tenants via a service charge.

Under the lease agreement, the parties agree upon contractual consequences of any destructions of the leased premises, such as redevelopment (including deadlines) or extraordinary termination rights. 

The rent and service charges are generally subject to 23% VAT.

The landlord has the statutory right of pledge over the tenant’s movables kept in the premises as security against the tenant’s obligations. This statutory right is usually excluded in retail leases. 

Tenant’s obligation to return the premises to the landlord is usually secured by the declaration on voluntary submission to enforcement which is made by the tenant in form of notarial deed and delivered to the landlord prior commencement of the lease term. In case the tenant does not return the premises back to landlord in the time provided in the lease agreement, the landlord who possess tenant’s declaration on voluntary submission to enforcement does not have to obtain eviction order of the court.