A declaration of voluntary submission to enforcement is a commonly used instrument for securing potential claims of the landlord in commercial lease transactions (industrial, office, or retail). It may also be used in contracts outside the real estate sector where there is a need to secure the claims of one of the contracting parties. What is this mechanism, and what risks does it pose for the tenant?
1. Declaration of voluntary submission to enforcement – Key Information
A declaration of voluntary submission to enforcement is a contractual instrument designed to secure the proper performance of obligations. In lease agreements, it appears in two forms:
- as security for the tenant’s payment of all amounts due under the lease, i.e., not only rent but also service charges, utilities, contractual penalties, etc.; (so-called voluntary submission to enforcement regarding payment) or
- as security for the tenant’s obligation to return the property at the end of the lease term (so-called voluntary submission to enforcement regarding surrender).
2. What are the consequences for the tenant of submitting a declaration of voluntary submission to enforcement?
A declaration of voluntary submission to enforcement significantly simplifies the landlord’s ability to pursue claims if the tenant fails to perform obligations voluntarily. A correctly submitted declaration, once the landlord obtains an enforcement order, effectively replaces a court judgment, allowing enforcement proceedings to begin immediately.
Importantly, when issuing the enforcement order, the court does not assess the merits of the case. It merely verifies whether the declaration meets formal statutory requirements. In practice, this means that the court does not conduct evidentiary proceedings, analyse the lease agreement, call witnesses, or verify whether the landlord’s claim actually exists!
3. Form of the declaration of voluntary submission to enforcement
Due to the far‑reaching legal consequences of submitting a declaration of voluntary submission to enforcement, Polish law requires the declaration to be made in the form of a notarial deed.
Without this form, the declaration is invalid and unenforceable.
In practice, a draft declaration is attached to the lease agreement, and once the lease is signed, the tenant has a specified time (typically 2–4 weeks) to deliver the declaration executed before a notary. It is common practice to stipulate in lease agreements that the delivery to the landlord of a correctly executed declaration is a condition precedent to handover of the premises.
Although the declaration may theoretically be executed abroad, landlords usually require it to be signed before a Polish notary due to procedural complexity. This may be challenging for tenants whose authorised representatives are not based in Poland. A practical solution is to grant a power of attorney to a trusted individual in Poland. A foreign power of attorney to make a declaration of voluntary submission to enforcement must, however, be notarised abroad.
4. Market standards and negotiation points
Whilst a declaration of voluntary submission to enforcement regarding surrender is standard and generally non‑negotiable in the Polish commercial property market, the requirement for a declaration regarding payment depends on the type of lease, the tenant’s credit rating, and the landlord’s internal standards. Landlords may secure their financial claims through various forms of security, such as a bank guarantee or corporate guarantee. Tenants should therefore consider whether replacing the declaration of voluntary submission to enforcement regarding payment with an alternative security instrument.
There is no doubt that a declaration of voluntary submission to enforcement regarding payment, enables the landlord to initiate enforcement proceedings relatively quickly without court action and is a powerful tool that may influence the financial planning and risk management of the tenant’s business. The extent of this risk is proportional to the amount of the security and the length of the period during which the declaration may be enforced. For this reason, it is worth negotiating both elements. Market practice links the maximum security amount to a multiple of the rent and service‑charge prepayments. The validity period of security is typically tied to the planned end date of the lease and an agreed number of calendar months. In simple terms, the lower the security amount and the shorter the enforceability period, the more favourable it is for the tenant.
Submitting a declaration of voluntary submission to enforcement regarding surrender is, in many cases, essentially non‑negotiable. The only matter that may be subject to some negotiation is the deadline or event triggering the use of this security. It is in the tenant’s interest to negotiate a certain time buffer, for example in the form of an additional notice that the landlord must issue before applying for an enforcement order.
5. Summary
Declarations of voluntary submission to enforcement are often presented as ‘standard’ documents, and indeed they are. However, this does not mean they should be accepted without negotiation. Before committing to such security, the prospective tenant should understand its implications and consider whether reasonable alternatives are available. It is also advisable to negotiate the key terms of such declarations to minimise exposure to risk.
Wiewiórski Legal provides comprehensive advice on all matters related to commercial property leases, including issues concerning security instruments. Please do not hesitate to contact us if you require an analysis of a draft lease, assistance with negotiating security documents, or support in executing documents on behalf of the tenant – including a declaration of voluntary submission to enforcement.
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