Poland's Developer Guarantee Fund (DFG): How It Protects Property Buyers

You've signed a developer agreement (umowa deweloperska) for a flat in Poland and you're paying instalments as the build progresses — but what happens to that money if the developer disappears or goes bankrupt? Polish lawmakers created the Developer Guarantee Fund (Deweloperski Fundusz Gwarancyjny, DFG) as an extra layer of protection on top of the escrow account. Here's how the DFG works, how it interacts with the escrow account, and where its limits lie.

This guide is general legal information, not legal advice. How the rules apply depends on your individual circumstances — the type of contract, the kind of escrow account used, and the stage of the development — and the matter should be assessed by a qualified Polish lawyer. We do not guarantee any outcome or timeframe for recovering funds. Twoja Sprawa helps you organise the documents for that assessment.

Key facts

• The DFG is a fund built from contributions paid by developers, designed to step in if a developer becomes insolvent — it works alongside, not instead of, the escrow account.
• Its legal basis is the Developer Act of 20 May 2021 (Journal of Laws / Dziennik Ustaw, Dz.U. 2021 item 1177), in force since 1 July 2022.
• The mieszkaniowy rachunek powierniczy (residential escrow account) is the first line of defence — your payments go to a ring-fenced account held by a bank, not straight to the developer.
• The DFG adds a second layer for situations where the escrow account's protection may not be enough — for example, in a developer's bankruptcy or where the buyer withdraws from the contract through the developer's fault.
• The exact scope and limits of DFG protection in any given case require checking the contract — not every payment and not every situation is covered in the same way.
• The DFG is not a tool for forcing repairs — it protects money paid in, not workmanship or defect remediation.

What the Developer Guarantee Fund is and where it came from

The Developer Guarantee Fund was introduced by the Act of 20 May 2021 on the protection of rights of purchasers of a residential unit or single-family house and on the Developer Guarantee Fund (Dz.U. 2021 item 1177), in force since 1 July 2022. It replaced an earlier, narrower buyer-protection regime dating from 2011.

The fund is financed by contributions paid by developers on transactions covered by the Act — it is a ring-fenced pool of money, not state budget funding in the conventional sense. This spreads the cost of protecting buyers across the whole development market, rather than loading it only onto the clients of one insolvent firm.

The DFG covers contracts falling under the Developer Act — chiefly developer agreements for residential units and single-family houses signed after the Act came into force. Whether this extends to, say, reservation agreements (umowa rezerwacyjna) or preliminary agreements (umowa przedwstępna) in any given case needs to be verified.

Escrow account vs DFG — two different layers of protection

Before looking at what the DFG does, it helps to separate two mechanisms that are often confused:

Escrow accounts come in two forms: open (otwarty) and closed (zamknięty). With an open account, the bank releases funds to the developer in stages as construction progresses; with a closed account, the developer receives the full amount only once ownership of the unit has been transferred. A closed account offers stronger protection, since the developer has no access to the money before completion, but in practice most developments use open accounts.

The DFG does not replace the escrow account — it supplements it. If the escrow account works as intended and the developer honours the contract, the fund stays firmly in the background. Its role only becomes relevant when something goes wrong — the developer becomes insolvent, or fails to perform the contract in a way that justifies the buyer withdrawing.

What exactly the DFG protects — the scope of cover

The DFG's core function is to protect the money a buyer has paid in where the developer cannot complete the project or refund the funds. This applies in particular to:

• the developer's bankruptcy — where the escrow account or the bankruptcy estate may not hold enough to fully satisfy all buyers,
• withdrawal from the contract for reasons attributable to the developer — for example, serious delay or failure to remedy a material defect — within the scope set out in the Act.

An important caveat: the DFG protects money, it does not force the developer to fix defects in the unit. For disputes over the quality of workmanship, the correct route is the statutory warranty for defects (rękojmia, Article 556 et seq. of the Civil Code — Kodeks cywilny) and the handover/complaint procedure under the Developer Act, not a claim against the DFG.

Whether a payout would cover the whole sum paid in or only part of it depends on the implementing regulations and the circumstances of the case. Do not assume full cover of your losses as a given.

When the DFG isn't enough — the limits of the mechanism

Buyers often treat the DFG as a guarantee of complete financial safety. In reality, the mechanism has clear boundaries:

• The fund responds to specific events defined in the Act — it is not a blanket insurance policy against every possible dispute with a developer.
• The process for triggering a payout can be slow, particularly in a bankruptcy, where the buyer must first lodge a claim (zgłoszenie wierzytelności) in the insolvency proceedings, with the DFG payout following as a separate procedure.
• The existence of the DFG doesn't remove the need for due diligence when choosing a developer — it's still worth checking whether the development falls under the Act and which bank holds the escrow account.
• The amount and timing of any payout are not fixed in advance — they may depend on the stage of the development and how many buyers are affected by the same event.

Even with the DFG in place, it's worth keeping systematic records — the contract, proof of payments, and correspondence with the developer and the bank — as this documentation underpins any future claim.

How to make a DFG claim — practical steps

If you want to rely on DFG protection, it helps to work through this methodically:

1. Establish whether your contract falls under the 2021 Developer Act — check the date it was signed and its legal character.
2. Gather your documentation: the contract, the payment schedule, proof of transfers into the escrow account, and any correspondence about delays or defects.
3. Identify the cause of the problem — is it the developer's bankruptcy, a withdrawal caused by the developer's fault, or another situation covered by the Act.
4. Contact the body administering the fund, and, in the event of bankruptcy, lodge your claim in the insolvency proceedings within the deadline set by the court.
5. Consider taking legal advice, particularly where the case involves a bankruptcy or a dispute over whether your situation falls within the categories covered by the fund.

Each of these steps can look different depending on the stage of the development and the type of problem — the general outline above is always worth checking against current legislation and the specific developer's situation.

Frequently asked questions

Does the DFG cover every contract with a developer?

As a rule, it covers contracts falling under the 2021 Developer Act, signed after it came into force. The exact scope in any individual case should be checked by a lawyer against the wording of the contract and the date it was signed.

Will the DFG refund the full amount I paid if the developer goes bankrupt?

There is no guarantee of that — the scope and level of protection depend on the circumstances of the case and the implementing regulations. Do not assume an automatic, full refund without a case-specific review.

Can I claim against the DFG if the developer simply won't fix defects in my flat?

Generally, no — the DFG protects money paid in against the developer's insolvency; it does not enforce workmanship quality. Where defects are the issue, the correct route is the handover and complaint procedure under the Developer Act, together with the statutory warranty for defects (rękojmia) under the Civil Code.

What if the developer isn't using a residential escrow account at all?

This is a legal obligation for contracts covered by the Act, and failing to use one may indicate a breach. It's worth taking legal advice as soon as possible, before making further payments.

Need help with this?

If you're unsure whether your investment is properly protected, whether your contract falls under DFG cover, or you've found yourself facing a developer's bankruptcy — we can help you organise the documentation for further legal analysis. See our developer dispute section (in Polish), or browse related guides below.

• Developer bankruptcy — what it means for a property buyer
• Statutory warranty, guarantee, and the Developer Act — defects in a new flat
• Handover of a flat from a developer — the protocol and defects