The preliminary agreement is regulated in the Act of 23 April 1964 – the Civil Code, and it is an agreement by which one or both parties undertake to conclude a specified promised agreement in the future. It is an agreement whose essential purpose is to guarantee the parties the possibility of, and the obligation to conclude, the final agreement, the so-called promised agreement, which, due to various circumstances, often cannot be concluded immediately. As a rule, the law allows a preliminary agreement to be concluded in any form. However, if either party evades concluding the promised agreement, the consequences differ depending on whether the agreement was concluded in the form of a notarial deed or in written form.
The purpose of a preliminary agreement
There can be many circumstances influencing the decision to conclude a preliminary agreement, for example the lack of a sufficient sum to pay the sale price for the subject of the agreement, waiting for a loan decision, geodetic divisions of a plot, or waiting for a document to be issued, e.g. a succession decision. A preliminary agreement, which concerns an obligation to conclude another agreement in the future, does not have a dispositive effect – it therefore does not yet transfer ownership of the property, including real estate – but only obliges the parties to conclude the promised agreement in the future. The purpose of the preliminary agreement is to lead to the conclusion of the final agreement in the future on the terms set out in the preliminary agreement.
What should a preliminary agreement contain?
Every preliminary agreement should specify the so-called essential terms of the promised agreement. In the case of a preliminary agreement for the sale of real estate, it should include information about the parties, the subject of the agreement and its price. In addition, the preliminary agreement should specify the date for concluding the final agreement; if no date for concluding the final agreement is given, the agreement should be concluded within an appropriate time limit set by the party entitled to demand the conclusion of the promised agreement, and if both parties are entitled to demand its conclusion and each of them has set a different date, the binding date is the one set by the party that did so first. If, within one year of the conclusion of the preliminary agreement, no date for concluding the final agreement has been set, its conclusion can no longer be demanded.
A preliminary agreement in written form or in the form of a notarial deed?
The form of a notarial deed is required for the transfer of ownership of real estate. Consequently, choosing to conclude the preliminary agreement in the form of a notarial deed means, among other things, that you can pursue your rights in court. The entitled party may then seek the conclusion of the promised agreement before a court, and a final court ruling declaring the obligation to make a declaration of intent replaces that declaration. When concluding a preliminary agreement in the form of a notarial deed, you may additionally request that a land and mortgage register application be filed with the court for the entry of the claim for the transfer of ownership of the real estate; the party in whose favour the claim has been disclosed may then pursue it against the current owner of the real estate. If such an agreement is concluded in written form, the party is only entitled to claims for non-performance of the agreement in the form of damages. Claims under a preliminary agreement become time-barred one year after the date on which the promised agreement was to be concluded.
How much does a preliminary agreement cost at the notary’s?
The cost of a preliminary agreement whose subject is, for example, real estate depends on its value. The amount of the notarial fee is regulated by the Decree of the Minister of Justice of 28 June 2004 on the maximum rates of the notarial fee. To determine the exact cost of a preliminary agreement, it is best to contact the notary office, and the notary will then calculate the exact cost of such an agreement.