Notarial orders for payment – changes in debt collection

Notary orders for payment

The government draft concerning, among other things, amendments to the Law on Notary Publics was submitted to the Parliament on October 11, 2022, and also provides for changes to the Civil Code Act, the Civil Procedure Code Act, the Land and Mortgage Register Act, the Law on Bailiffs, the Criminal Procedure Code Act and the Law on Population Records.

Among the most revolutionary changes is the introduction of a new category of payment order.

The draft stipulates that upon written request, the notary shall issue a notarial order for payment covering claims of up to PLN 75,000, if the legitimacy of the claimed claim is not in doubt, in particular, if the claimed claim is proven in the accompanying:

1. an official document;
2. a bill accepted by the debtor;
3. the debtor’s demand for payment and the debtor’s written statement of acknowledgment of the debt.

It is worth noting that the basic requirement is to prove the monetary claim with a document. However, the proposed enumeration is only exemplary. Interestingly, the possibility of issuing notarial orders for payment is limited in quantity – a notary can issue no more than 200 such orders per month.

The application shall be submitted on an official form, the model of which will be specified in a regulation of the Minister of Justice.

The notarized order for payment orders the obligated person to pay the amounts specified in the order for payment in full, together with the costs for issuing the order, within two weeks of service of the order, or to file an objection with the notary within that period. The draft does not specify whether the costs for issuing the order also include the costs of representation by a professional attorney.

If the prerequisites for the issuance of a notary’s warrant are not met, the notary prepares a report on the refusal to issue the warrant, a copy of which is delivered to the applicant. The refusal to issue a warrant is not appealable.

Importantly, if the obligated person/debtor does not take delivery of the package containing the notarized payment order, the order will lose its force.  The fiction of delivery has not been provided for, which means that the debtor can avoid direct receipt from the notary with impunity. This may render the derived institution ineffective.

The loss of force of a notarized order for payment will result in the effective filing of an objection by the debtor.

The enforcement clause of the notarized order for payment will be granted by the district court according to the general jurisdiction of the obliged party.

The draft further provides that the filing of an application for a notarized order will suspend the running of the of the statute of limitations for the claim covered by the application.

The draft also does not regulate the cost of such payment orders.

In addition, it follows from the drafted regulations that a refusal to issue a notarized order for payment excludes the possibility of filing another application for the same claim, in which case the creditor is left with the path of court proceedings.

Land registry applications

The draft also provides an alternative to land and mortgage register applications filed with the district court.

Notaries are to gain the authority to make real estate ownership entries related to the establishment of separate ownership of premises. This includes the establishment and encumbrance of separate ownership of premises with limited rights in rem, as well as other claims related to the premises. The entry made by the notary is subject to a complaint to the court where the land register is kept.

Currently, the waiting time for an entry in the land and mortgage register made traditionally by the district court is very long.

Summary

The proposed regulations will provide a separate basis for issuing an order for payment, independent of the proceedings regulated so far in the Code of Civil Procedure. The creditor will gain an additional way to collect debts in Poland. However, the current version of the proposed regulations introduces many loopholes for debtors.

The aim of the changes is to relieve the courts of the burden of hearing simple and uncontested cases and to speed up court proceedings. At stake, however, is the constitutional right to a court which calls into question the proposed changes.

The draft is currently in the legislative process.