What is a flat for key money, really?

Calling 15 thousand PLN an attractive price compared with 300 thousand PLN would be an understatement. It is a downright laughably small amount! It seems that with such a budget you can at most dream of a flat of your own. Meanwhile, there is a solution that makes it possible to obtain a home for such a small sum. We are talking about buying a property for so-called key money (odstępne). Key money arouses much controversy, so it is time to face this concept and weigh up all its pros and cons. Is it worth considering buying a flat for key money?

In the simplest terms, key money means buying the right to live in someone else's property. The parties to the transaction agree on a certain sum, in return for which the occupant gains registration of residence and the certainty that the rent will not be increased for the duration of the agreement. At first glance this seems a very advantageous solution for both parties, but it has one significant drawback – the procedure is not regulated by law, so there is a considerable risk that the owner of the flat will try to cheat us. If we are wronged, the Tenants' Protection Act will not protect us.

When deciding on key money, we absolutely must make sure the agreement is put in writing. It will be a civil-law agreement. Otherwise, as tenants we will always be afraid that, for example, the owner will suddenly demand, without giving any reasonable grounds, that we leave the property. In the agreement, on the other hand, we can include a provision on the time the tenant has to move out of the flat after the tenancy period expires. If we agree on a fixed rent, a provision on this must also be included in the document. Every detail needs to be taken care of, including, for example, whether the owner can demand a higher rent when the standard of the flat improves (as a result of renovation carried out by the tenant).

How much do you have to pay in key money?

The amounts can vary; everything depends on the value of the flat, its size and the attractiveness of its location. However, the amount of key money is always lower than the purchase price of the flat.

Can the flat be bought later on?

As we have already mentioned, key money is not regulated by statute, so the right to buy the flat depends on what the parties to the transaction agreed. If the tenant is interested in buying the flat after the key money agreement expires, they should raise this at the stage of the initial talks with the owner.

Is it worth it?

In truth, there is always some risk. Even flats sold in the normal way, i.e. with transfer of ownership, have to be checked carefully for encumbrances. In the case of a flat for key money, however, you must scrupulously check whether the person claiming to be its owner really is the owner.

This type of agreement can be signed only with a private individual. If the flat belongs to the city or to a housing cooperative, the agreement will be invalid.

In truth, the safest option is to buy or rent a flat through a professional, trusted estate agency whose listings include only verified properties with a stable and clear legal situation. Besides, if you dream of a flat of your own, in a property rented for key money... you will never quite feel at home.