According to earlier announcements, this year, the so-called the FINN Act, i.e. companies investing in property rental, which will be the counterparts of REITs operating in many countries.
The institutional lease was introduced in the amended Act on the protection of tenants’ rights, which has been in force since 2017. Its principles are similar to occasional rentals, but in this case the landlord can only be an entity that conducts business involving the rental of apartments.
The institutional letting is to balance the interests of both sides of the lease. The tenant has a guarantee of the contract and the rate of the indexed fee for the inflation rate, he is also sure that he will not be surprised by the change in rent or sudden termination of the contract and shortening the lease period.
The main advantages in the institutional lease are the parties’ equality in the contract, the constancy of prices for our clients and the priority right to rent another flat. In addition, it is the availability of 24/7 services in case of any defects.
As he emphasizes, the Polish rental market is still in the development phase, over the last few years its share has increased from 1.8 percent. to the current 5 percent However, it is still incomparably smaller than in Western European countries, where the share of the rental in the real estate market fluctuates at the level of 30-50 percent. So there is still huge potential for growth.
The Polish rental market for housing is dominated by individual investors and there are still few entities that offer an institutional lease.
The institutional rental offer is addressed to practically all clients, while everyone has to undergo a rent test and verification in the BIK, BIG database. It is checked whether the clients will be able to afford renting or whether they will be able to pay fees. On the one hand, it is a concern for the security of payments that customers will regulate, while on the other hand it is caring for the safety of the customers who, by paying their bills, will have a guarantee of a place to live.