Earnest Money on a Polish Property Purchase: When You Keep It, When You Lose It

This guide is general legal information, not legal advice. How the rules apply depends on your individual circumstances, so before you rely on anything here, the matter should be assessed by a qualified Polish lawyer. Twoja Sprawa helps you organise the documents for that assessment.

You've decided to buy a property in Poland, and the moment is approaching when you'll be asked to pay a zadatek — an earnest-money deposit, usually a few percent of the price, put down as a guarantee that you're serious about going through with the deal. But do you know what happens to that money if the sale falls through?

The rule set out in Article 394 of the Polish Civil Code (Kodeks cywilny, KC) is clear enough on paper, but in practice deals often get murky. In this article we explain when a zadatek is forfeited, when it's returned, and when you can demand it back doubled.

The Article 394 KC rule: The zadatek is forfeited to the other party if the sale falls through because of the party who paid it. It must be returned doubled if the sale falls through because of the party who received it. The contract's own terms can vary these default rules.

What is a zadatek — the definition

A zadatek is a sum of money the buyer pays the seller (usually into the account of a notariusz — a civil-law notary, who in Poland handles conveyancing and holds funds as a neutral third party, unlike a UK notary public who mainly certifies documents) in order to secure the deal on agreed terms. It's a guarantee, on both sides, that the parties genuinely intend to complete the transaction.

A zadatek is typically 5–10% of the purchase price. Example: you're buying a flat for PLN 400,000, so the zadatek would be PLN 20,000–40,000. The zadatek is credited against the final price — if you buy for PLN 400,000 and have already paid a PLN 30,000 zadatek, then on signing the akt notarialny (the notarial deed, the document that formally transfers ownership) you pay the remaining PLN 370,000.

The difference between zadatek and zaliczka

Many buyers confuse these two terms, but they are legally quite different.

Zadatek (Article 394 KC)

• Functions as a guarantee that both parties genuinely intend to complete the deal.
• Is forfeited, or returned doubled, depending on whose fault it is that the deal fell through.
• Is credited against the price.

Zaliczka (part-payment / advance)

• Is simply an advance payment toward the purchase price — an ordinary instalment.
• If the deal falls through, it's returned in full regardless of fault — because it was always just an advance on the price you'd eventually pay.
• Is also credited against the price.

In practice: if the contract says "zadatek PLN 30,000", Article 394 KC applies. If it says "zaliczka", the rules are more forgiving for the buyer — it's returned in full, whatever went wrong.

Article 394 KC — the forfeiture and refund rule

Article 394 KC works as follows:

1. The sale falls through because of the buyer

The zadatek is forfeited to the seller.

Example: you sign a preliminary contract (umowa przedwstępna) and pay a PLN 30,000 zadatek, but before the notarial deed is signed you change your mind and pull out without a valid reason. The seller keeps the PLN 30,000 — you lose it.

2. The sale falls through because of the seller

The zadatek must be returned doubled.

Example: you've paid PLN 30,000, but the seller changes the terms or backs out of the sale. The seller must now refund you PLN 60,000 (twice the zadatek) — a penalty for pulling out.

3. The sale falls through with no fault on either side

As a general rule, the zadatek is returned in full — because no one was at fault.

Example: the contract contained a condition precedent — "completion is conditional on the buyer obtaining a mortgage." The bank refuses the mortgage through no fault of the buyer's; the condition isn't met, the contract lapses, and the zadatek is returned.

Conditions precedent and the zadatek — the key issue

This is where things get complicated. The preliminary contract should say explicitly what happens to the zadatek if a condition precedent isn't met.

Scenario: The bank refuses the mortgage

• If the contract says: "the buyer undertakes to obtain a mortgage; if the bank refuses, the buyer withdraws without any right to the zadatek" — then you lose the zadatek (it's treated as your fault for choosing a bank that turned you down).
• If the contract says: "completion is conditional on obtaining a mortgage; if the bank refuses, the contract lapses and the zadatek is returned" — then the zadatek is returned, because it isn't your fault.

Tip: before signing a preliminary contract, make sure it sets out clearly what happens to the zadatek if your mortgage is refused. This is the single most common source of disputes.

Scenario: The seller can't get the bank's consent to release a mortgage on the property

• If the seller's existing mortgage isn't released, the sale can't complete — and that's the seller's fault (they weren't financially prepared).
• The zadatek should then be returned doubled (Article 394 KC).

When the zadatek is forfeited and when it's returned

Enforcing the zadatek — what to do if it isn't returned

If the seller unlawfully refuses to return the zadatek when they're obliged to, you can:

1. Send a written demand — a formal letter (usually recorded delivery / registered post) to the seller's address, requiring the refund within a set deadline (e.g. 7 days).

2. Sue — if the demand goes unanswered, you can bring a claim against the seller before a Polish court for return of the zadatek. Article 394 KC gives you the legal basis for the claim.

3. Claim double the zadatek — if the sale fell through because of the seller, the court can award you the doubled refund plus damages.

Claims like this are usually heard by the district court (sąd rejonowy), which as a rule handles claims up to PLN 75,000.

How to protect yourself against losing your zadatek

1. Use a notarial preliminary contract

• A preliminary contract signed as a notarial deed gives you a stronger right to sue (Art. 544 KC) — the court can compel the seller to complete the sale.

2. Set out the conditions precedent clearly

• Make sure the contract spells out exactly what happens to the zadatek if a condition isn't met — this matters most for the mortgage condition.

3. Have the notary hold the funds

• The zadatek should be paid into the notary's escrow account, not the seller's account directly, and held there until the notarial deed is signed.
• This gives you much stronger assurance that the zadatek will actually be returned if the deal falls through.

4. Keep records

• Keep the payment confirmation, the preliminary contract, and all correspondence. These are your evidence if a dispute arises.

Frequently Asked Questions

Can I claim double the zadatek back if the seller pulls out? Yes — under Article 394 KC. If the sale falls through because of the seller, you're entitled to double the zadatek back. You'll need to prove this to the court.

What if the bank refuses my mortgage — do I lose the zadatek? It depends on what the preliminary contract says. If it contains a condition precedent (the contract lapses if the mortgage falls through), the zadatek is returned. If the contract simply makes obtaining a mortgage the buyer's obligation, without a condition precedent, you risk losing the zadatek.

Can I negotiate the zadatek terms in the preliminary contract? Yes — the contract is negotiable. You can propose that the zadatek be paid into the notary's escrow account rather than directly to the seller, or that it be returned in full if the mortgage is refused. It's a matter for negotiation between the parties.

What if the seller won't return the zadatek for no good reason? Send a formal written demand, and if that doesn't work, sue. Based on Article 394 KC, the court can find in your favour and order the zadatek returned, with interest.

Is the zadatek treated as part-payment of the price? Yes — under Article 394 KC, it's credited against the price. If you buy a property for PLN 400,000 and have already paid a PLN 30,000 zadatek, you pay the remaining PLN 370,000 on signing the notarial deed.