A retail chain expanding into central Poland signed a ten-year commercial lease without legal review of the indexation clause. Eighteen months later, the landlord invoked an automatic rent escalation mechanism tied to a broad inflation index. The tenant faced annual increases far exceeding initial projections – with no contractual exit.
Commercial leases in Poland are governed primarily by the Kodeks cywilny (Civil Code, KC), which sets default rules on duration, termination, and rent adjustment. Unlike residential tenancies, commercial arrangements receive limited statutory protection, meaning the parties' drafted terms govern almost entirely. A poorly structured lease can lock a tenant into escalating costs or strip a landlord of remedies for 10 or more years.
This case study examines the key contractual terms that determined the outcome of a disputed commercial lease in the Mazowieckie region. It covers the background, the legal strategy deployed, and the transferable lessons for any business entering or renegotiating a Polish commercial lease.
What went wrong? Background to the dispute
The tenant – a mid-size retail operator – leased approximately 1,200 square metres of commercial space in a Warsaw suburb. The lease ran for ten years with an option to renew. Rent was denominated in euros but payable in Polish zloty at the National Bank of Poland (Narodowy Bank Polski, NBP) exchange rate on the invoice date. An indexation clause linked annual rent adjustments to the Harmonised Index of Consumer Prices published by Eurostat.
The clause contained no cap. After two consecutive years of elevated inflation, the cumulative rent increase reached 28 percent above the original figure. The tenant challenged the adjustment, arguing the clause was ambiguous and that the parties had not intended unlimited escalation. The landlord disagreed. The matter was referred to the District Court (Sąd Rejonowy) in Warsaw, with a parallel application to the National Court Register (Krajowy Rejestr Sądowy, KRS) to confirm the corporate authority of the landlord entity to execute the original lease.
Our team was engaged at the pre-litigation stage, roughly 14 months after the dispute crystallised. (Early engagement, we have found, typically saves at least one procedural round.) The tenant had already made three rent payments under protest, which preserved its position but created a factual record the landlord sought to exploit.
How did the legal strategy address the core lease terms?
The strategy rested on three pillars: contractual interpretation under Polish civil law, a procedural challenge to the landlord's authority, and a parallel renegotiation track. Each pillar targeted a different weakness in the landlord's position.
First, the indexation clause. Under Polish civil law, ambiguous contract terms are construed against the party that drafted them – a principle the Civil Code applies to commercial agreements. The clause referenced the index but did not specify the base year or the compounding method. Our team argued that the absence of a cap, combined with the drafting ambiguity, rendered the unlimited escalation unenforceable as written. The court accepted this line of argument as a preliminary matter, ordering the parties to submit expert evidence on market-standard indexation practice within 60 days.
Second, the authority challenge. The KRS filing confirmed that the landlord's signatory lacked board-level authorisation at the time of signing. Under Polish corporate legislation, acts performed without proper authority are voidable, not automatically void – but the defect provided leverage. This finding supported the renegotiation track by weakening the landlord's litigation posture.
Third, renegotiation. With litigation risk shared by both sides, the parties reached a settlement within five months. The revised lease introduced a 5 percent annual cap on rent increases, a clearly defined base year, and a mutual break option exercisable after year seven on 12 months' notice. We secured a reduction in accrued disputed amounts exceeding PLN 180,000 for the tenant in the Mazowieckie region (winter 2025).
What are the transferable lessons for commercial lease negotiations?
Polish commercial leases offer wide contractual freedom. That freedom cuts both ways. The lessons from this matter apply to any business leasing space in Poland – whether manufacturing, retail, or professional services.
Indexation must be capped and defined. Every indexation clause should specify: the index, the base date, the compounding method, and a maximum annual adjustment. A clause that omits any of these elements invites dispute. Market practice in Warsaw currently ranges from 3 to 5 percent annual caps for prime retail space.
Currency and payment mechanics matter. Euro-denominated rent payable in zloty creates exchange-rate exposure for both sides. Tenants should negotiate a fixed conversion rate or a contractual band. For foreign investors – particularly those buying property in Poland as a Netherlands national or entering via a Polish subsidiary – currency risk compounds lease risk in ways that are not always modelled at the investment stage.
Break clauses are essential on long leases. A ten-year lease without a break option is, in effect, a ten-year financial commitment. Polish law does not imply break rights; they must be drafted expressly, with clear notice periods (typically six to 12 months) and any associated penalty payments capped.
Authority verification should precede signing. Checking the KRS entry of the counterparty before execution takes under one hour and costs nothing. It is a step that the tenant in this matter skipped – at considerable expense. For transactions structured through holding vehicles, the corporate and M&A practice can map the authority chain across multiple entities.
- Confirm the signatory's authority via the KRS before execution
- Cap indexation and define the base year and compounding method
- Negotiate a mutual break option on leases exceeding five years
- Address currency conversion mechanics explicitly in the lease body
- Retain all rent payment records, including payments made under protest
Frequently asked questions
Q: How long does a commercial lease dispute typically take in Polish courts?
A: First-instance proceedings before a District Court in Warsaw currently average 18 to 24 months for contested commercial lease matters. Parties who engage in parallel mediation or settlement negotiations can often resolve disputes within five to eight months, as occurred in this matter. The choice of forum – court or arbitration – should be addressed in the lease itself, ideally with a mediation clause as a first step.
Q: Is it a misconception that Polish commercial leases automatically renew?
A: Yes. Under the Civil Code, a fixed-term lease does not renew automatically unless the tenant remains in possession after expiry and the landlord does not object within a defined period. If the landlord objects in time, the lease terminates on the agreed date. Tenants who assume renewal is automatic risk losing their premises without notice. Any renewal right should be drafted as an express option with a written exercise deadline.
Q: What costs should a tenant budget for legal review of a commercial lease?
A: A full legal review of a standard commercial lease – covering indexation, termination, subletting, and fit-out obligations – typically takes eight to twelve hours of attorney time. For a ten-year lease on 1,000 square metres or more, that investment is modest relative to the financial exposure of an uncapped indexation clause or an absent break right. For Polish nationals considering property transactions, our guide to buying property in Poland as a Polish national covers related due diligence steps.
The specific facts of your lease determine which risks are live and which protections are available. Missing a contractual deadline or overlooking an ambiguous clause can foreclose remedies that would otherwise be straightforward to pursue.
If your company is negotiating, reviewing, or disputing a commercial lease in Poland – particularly on a term exceeding five years or with a cross-border ownership structure – our team will analyse the indexation mechanics, authority chain, and break-option position: info@kordeckipartners.com.
About KORDECKI & Partners
KORDECKI & Partners is a law firm based in Warsaw and Krakow, advising business clients across 30 jurisdictions. Our team combines expertise in Polish and international law with a practical approach to commercial real estate, lease structuring, and FIDIC disputes. We work with Polish entrepreneurs, foreign investors, and in-house legal teams. To discuss your situation, contact info@kordeckipartners.com.
Disclaimer: This publication is provided for informational purposes only and does not constitute legal advice. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. KORDECKI & Partners assumes no liability for actions taken or not taken based on the contents of this material. For advice regarding your particular situation, please contact info@kordeckipartners.com.