Property Development Guarantee Fund – New Measures to Protect Purchasers of a Residential Unit or a Detached House

Abstract

The article discusses the purchase of residential premises or single-family houses on the primary market and the rules of consumer protection in the event of the developer’s bankruptcy or other difficulties encountered while transferring the ownership of such real properties. The author presents the way that led to the adoption of new regulations of the Act on the Protection of the Rights of Purchasers of a Residential Unit or a Detached House and on the Property Development Guarantee Fund, passed in May 2021. A major change resulting from the adoption of the new regulations is the establishment of the Property Development Guarantee Fund within the Insurance Guarantee Fund, whose role will be to provide buyers with comprehensive protection as well as certainty that all funds deposited on the residential trust accounts are recovered in the event of the withdrawal from the property development agreement or the developer’s bankruptcy. In addition, the article discusses the operation principles of the Property Development Guarantee Fund as well as the rights and obligations of the participants of the property development market.