Developer bankruptcy in Poland – what happens to your money? DFG, escrow account, trustee (2026)

In short: if a developer declares bankruptcy, your payments are not automatically lost. The bank returns to buyers the money held in the residential escrow account (mieszkaniowy rachunek powierniczy), and if construction will not continue, the missing part of payments made into an open account is refunded by the Developer Guarantee Fund (Deweloperski Fundusz Gwarancyjny – DFG) within 30 days of your application (90 days at most). The development may also be completed – by the trustee, another developer or under an arrangement with buyers – in which case you get your flat.

Updated: October 2026. Legal status: the Polish Developer Act (Dz.U. 2026 poz. 880) and the Bankruptcy Law (Dz.U. 2025 poz. 614, Art. 425a–425o).

Key facts

• The protection applies to developments run under the 2021 Polish Developer Act (ustawa deweloperska) – mainly those in which sales started on or after 1 July 2022.
• After bankruptcy is declared, the bankruptcy judge (sędzia-komisarz) decides within 3 months whether the trustee (syndyk) may continue construction. No decision within that time has the same effect as withdrawal from the contracts.
• If construction will not continue, the bank returns the funds in the escrow account to buyers, and the DFG pays the difference up to the total of your payments into the open account.
• The UFG pays out DFG money within 30 days of the application, and in exceptional situations within 90 days at the latest.
• With a closed account, the developer has not yet received your money – the bank returns it from the account.
• Claims are filed with the trustee within 30 days of the bankruptcy notice in the National Register of Debtors (Krajowy Rejestr Zadłużonych – KRZ).

What happens to your money – scenarios

Situation	What happens	Who returns the money
The trustee completes construction (with the bankruptcy judge's consent)	The contract continues, you keep paying into the escrow account, and your claim is satisfied by the transfer of ownership of the flat	– (you get the flat)
Another developer buys the land with the construction	It takes over the contracts with buyers and is jointly and severally liable for them with the bankrupt developer; within 30 days it opens a new escrow account to which the funds are transferred	– (you get the flat from the new developer)
Arrangement with buyers	Buyers (at least 20% of them) can submit arrangement proposals, e.g. additional payments to complete construction	depends on the arrangement
Construction will not continue – open account	Same effect as withdrawal from the contracts; the trustee instructs the bank to return the funds in the account	the bank – whatever is left in the account; the DFG – the difference up to the total of your payments
Construction will not continue – closed account	The money has not yet gone to the developer	the bank – from the escrow account
The bank holding the account fails	The developer must sign an agreement with another bank within 30 days	the BFG up to the guarantee limit, the DFG – the rest

Step 1: bankruptcy declaration and the decision on further construction

Bankruptcy proceedings against a developer have a special purpose: to satisfy buyers by transferring ownership of the units to them, if reasonable considerations allow it (Art. 425b of the Bankruptcy Law). The trustee may continue the development with the consent of the bankruptcy judge, who gives it when completing construction is economically justified and realistic (Art. 425e).

If the bankruptcy judge refuses consent, agrees to abandon construction or issues no decision within 3 months of the bankruptcy declaration, the trustee's withdrawal from the developer agreements takes effect by operation of law. The trustee then informs the bank holding the escrow account and instructs it to return the funds to buyers. The same applies if the bankruptcy judge later agrees to stop construction (Art. 425h).

Step 2: refund from the escrow account and top-up from the DFG

First, the bank returns to you your share of the funds remaining in the escrow account. With an open account, part of the money may already have gone to the developer for completed stages – that difference is covered by the Developer Guarantee Fund, run by the Insurance Guarantee Fund (Ubezpieczeniowy Fundusz Gwarancyjny – UFG) (Art. 48(1)(1)–(3) and (8) of the Developer Act).

Example: you are buying a flat for 900,000 zł and have paid three instalments – 585,000 zł in total. The bank has already released 360,000 zł to the developer for two completed stages, and 225,000 zł remains in the account. After the bankruptcy, the bank returns 225,000 zł to you and the DFG the missing 360,000 zł. The developer had already paid the fund contribution on each of your payments.

Step 3: application to the UFG

• The bank and the trustee provide the UFG with information about the bankruptcy and the amounts returned to you.
• You submit an application to the UFG: full name, PESEL number (or identity document details if you do not have a PESEL), address, escrow account number and the account for the payout, plus a statement of the amounts returned by the developer (Art. 55).
• The UFG pays out within 30 days of the application. The deadline may be extended if the application needs verification or the fund lacks money – to no more than 90 days; applications are then processed in order of receipt.
• After the payout, the UFG takes over your claim against the developer and pursues recovery from the bankruptcy estate itself.

The UFG publishes the procedure and forms on its Strefa DFG service (dfg.ufg.pl). According to the UFG, in 2025 the DFG paid out over 11.7 million zł to buyers, on average approx. 365,600 zł per person.

Step 4: filing your claim with the trustee

The bankruptcy decision is published in the National Register of Debtors (KRZ). From that day, creditors have 30 days to file their claims with the trustee through the KRZ system. If your payments are not returned in full (e.g. you paid part outside the escrow account or the development was not covered by the DFG), file your claim on time.

Buyers' claims arising from withdrawal from the contract are satisfied from the money obtained from selling the property, and priority is given by the entry of the claim in the land and mortgage register (księga wieczysta) – even if it was later deleted (Art. 425j). If the mortgage bank consented to separating the unit free of encumbrances, your claim ranks ahead of the mortgage up to the amount of your payments (Art. 425i). If the DFG has already paid you part of the money, the UFG's claims from that payout are satisfied first, and only then your remaining claims (Art. 425ja).

When another developer or the buyers take over construction

The trustee may sell the land with the construction under way to a business that undertakes to complete it. The new developer takes over the rights under the contracts, is jointly and severally liable for them with the bankrupt developer, and must sign a new escrow account agreement within 30 days, to which the bank transfers the accumulated funds (Art. 425l–425m). Buyers representing at least 20% of all buyers in the development can, within 30 days of the bankruptcy declaration, submit arrangement proposals – e.g. additional payments to complete construction or a sale of the development to another developer (Art. 425n–425o).

If the development started before 1 July 2022

Developments in which sales and the first contracts started before 1 July 2022 were run for 2 years under the old 2011 Act – with an escrow account but without the DFG (Art. 76). If such a developer goes bankrupt, you are protected mainly by the escrow account and the entry of your claim in the land and mortgage register, not by the fund. If you are buying a flat in an older development, ask the developer whether your contract is covered by the new Act and the DFG contribution.

Warning signs before buying

• An entry about restructuring or bankruptcy proceedings in the KRZ or in the KRS of the developer or its special purpose company.
• A schedule that keeps slipping, and reports of payouts from the account being withheld after a bank check.
• A change of the bank holding the escrow account during construction without a clear explanation.
• A request to pay into an ordinary account instead of the escrow account – always a reason to stop.
• No track record of completed developments, or a mortgage on the land without the bank's consent to separate the units free of encumbrances.

How to go through this list step by step: How to check a developer before buying and Land and mortgage register – how to check it online.

Frequently asked questions

Summary

A developer's bankruptcy does not mean losing your money if you paid into an escrow account in a development covered by the 2021 Act: you either get the flat once construction is completed, or a refund from the account plus a top-up from the DFG. What matters most is what you do before buying – checking the developer and the type of escrow account, and paying only into that account. The full list of buyer's rights is in the article Polish Developer Act 2026 – buyer's rights step by step, and the rules of the account and the fund in Escrow account and DFG.

We help clients choose developments by proven developers – see new flats in Warsaw, flats from 800,000 zł to 1 million zł and offers in Wrocław. We review the contract with a lawyer before you sign: developer agreement review. Consultation and selection of offers are free, and buyers usually pay us no commission, because our fee is normally paid by the developer.

Legal status as of October 2026. This article is for information only and does not constitute legal advice – if your developer goes bankrupt, consult a lawyer about your situation.

Sources

• Ustawa z 20 maja 2021 r. o ochronie praw nabywcy lokalu mieszkalnego lub domu jednorodzinnego oraz Deweloperskim Funduszu Gwarancyjnym – Act on the protection of the rights of buyers of a residential unit or single-family house and on the Developer Guarantee Fund, consolidated text Dz.U. 2026 poz. 880 (Art. 10–12, 18, 48, 55, 76).
• Ustawa z 28 lutego 2003 r. – Prawo upadłościowe – Bankruptcy Law of 28 February 2003, consolidated text Dz.U. 2025 poz. 614 (Art. 51, 425a–425o).
• Ubezpieczeniowy Fundusz Gwarancyjny – Strefa DFG: wniosek o wypłatę środków – Insurance Guarantee Fund, DFG zone: payout application.
• UFG quarterly report on DFG funds (as at 31.12.2025), quoted in the explanatory memorandum to the draft amendment of the Act (May 2026).