Tuesday, 14 October 2025
Once promoted as a safe investment combining holiday ownership with steady rental income, Poland’s condo-hotel market is now under intensifying legal and regulatory scrutiny. A growing number of investors have filed lawsuits claiming misleading contracts, withheld deposits, and disproportionate penalty fees — exposing the blurred legal lines between consumer protection and commercial risk in this booming yet loosely regulated sector.
At the height of Poland’s tourism-driven property surge, hundreds of condo-hotels were built in resort towns like Zakopane, Kołobrzeg, and Mielno. Buyers were promised guaranteed annual returns of 6–8 percent and hassle-free management. In practice, many have faced contract disputes, delayed projects, and penalty clauses demanding up to 50 percent of the property price if they withdrew after making deposits.
According to legal experts, such penalties are often illegal under Polish consumer law. “A 50 percent withdrawal fee is a red flag — courts increasingly classify these clauses as abusive if the buyer is a consumer,” said a Warsaw-based property lawyer familiar with multiple ongoing cases. Under Article 385¹ of the Civil Code, terms that significantly disadvantage consumers or fail to reflect real costs can be declared void.
The Office of Competition and Consumer Protection (UOKiK) has confirmed this stance, penalizing developers including the operator of Termy Uniejów, which was fined over PLN 200,000 in 2023 for misleading investors with profit guarantees and unfair withdrawal clauses. The decision, though not yet final, reflects a growing crackdown on aggressive marketing practices in resort-style property schemes.
Meanwhile, the long-running “4 Kolory” case in Władysławowo remains one of the largest collective actions in Poland’s real estate sector. More than 120 investors are seeking over PLN 80 million in damages after paying deposits for hotel apartments that were never completed. While earlier fines against intermediary firm Home Broker have been upheld on appeal, the broader compensation case continues in Warsaw.
Industry insiders say the problem lies in how these projects straddle the line between real estate and hospitality. Developers often encourage buyers to set up small companies or sole proprietorships to reclaim VAT — a move that strips them of consumer status and legal safeguards under the Developer Act. “Most buyers don’t realise that by signing as a company, they lose the right to challenge unfair clauses or demand deposit protection,” noted a legal analyst specialising in property law.
For those signing as private individuals, the legal landscape is shifting in their favour. Courts in Warsaw and Katowice have already struck down penalty clauses of 30–50 percent as disproportionate, ruling that developers failed to prove equivalent financial losses. In one case, a buyer who forfeited a 40 percent deposit was refunded nearly in full after the developer resold the unit within weeks.
Yet, despite rising litigation, interest in condo-hotel projects remains strong. Developers continue to market investment apartments in mountain and seaside resorts, adapting contracts to comply with new consumer standards. Still, UOKiK warns that many offers promising “guaranteed returns” remain high-risk, particularly those outside the scope of the Developer Act or traditional mortgage financing.
As Poland’s courts and regulators confront the fallout of a decade-long condo-hotel boom, the outcome of pending cases could reshape the country’s real estate investment landscape. Whether the model evolves into a transparent and regulated segment — or becomes a cautionary tale for retail investors — will depend on how strictly the law distinguishes between property ownership and speculative investment.
Source: UOKiK
