Notarial deposit in Poland

The importance of notarial deposits extends far beyond traditional real estate transactions. Today, this institution is increasingly used in professional transactions, particularly in commercial, corporate, investment, and restructuring transactions, where it is essential to ensure the neutrality of the intermediary and full transparency in the execution of obligations.

Normative basis of notarial deposit

The basic regulation of notarial deposit is the Act of 14 February 1991 – the Notarial Law. Of central importance is Article 108 §1 of this Act, which grants notaries the right to accept securities and money in Polish or foreign currency for safekeeping, provided there is a connection with the act documented at the notary’s office.

An analysis of this provision leads to several fundamental conclusions. First, the acceptance of a deposit by a notary is optional, meaning that the notary may refuse to accept it if he or she deems the terms of the deposit unclear, unlawful, or infringing on the principles of safe trading. Second, the scope of the deposit is broadly defined, encompassing not only cash but also securities. Third, the condition for accepting a deposit is its direct connection with the notarial act being performed. Fourth, a notarial deposit does not function as a standalone legal act but is ancillary to another notarial act.

In addition, it is necessary to refer to Article 79, point 6 of the Notarial Act, which includes the acceptance of deposits in the catalogue of notarial acts, and Article 80, paragraph 2, which obliges the notary to ensure that the rights and legitimate interests of the parties and other persons for whom the act may produce legal effects are duly protected.

The operation of a notarial depository for the safekeeping of funds is directly based not only on the provisions of the Notarial Law, but also on the provisions of the Act of 29 August 1997 – Banking Law, and on the implementing regulations regarding the principles of maintaining bank accounts. These provisions are crucial for ensuring the security of funds deposited with a notary and for ensuring their clear separation from the notary’s own assets.

Pursuant to Article 108 § 3 of the Notarial Act, funds accepted for notarial deposit are held in a separate bank account. The structure of this account is based on the general principles of maintaining bank accounts arising from the Banking Act, in particular Article 49 et seq., which regulate the bank account agreement and the bank’s obligations regarding the storage and settlement of client funds.

The legal nature of a notarial deposit

Notarial deposit has a complex legal nature, defined as public law. On the one hand, it is based on the parties’ unanimous declarations of intent, which gives it the characteristics of a civil law relationship. On the other hand, it is implemented by a notary acting as a public official, which means that the deposit is subject to the rigors of public law.

The notary does not acquire ownership of the deposited item, but rather acts as a trustee, obligated to safekeeping and release it in accordance with the deposit protocol. The literature on the subject indicates that the notary’s position in a notarial deposit is similar to that of a depositary under civil law, but their duties and responsibilities are much broader.

A significant element of the deposit’s structure is the notary’s lack of freedom of interpretation. The deposit is released only after the conditions specified in the protocol have been met. The notary does not resolve disputes between the parties or assess the validity of their claims.

The notary as a person of public trust

When performing activities related to the acceptance and execution of a notarial deposit, a notary acts as a person of public trust, which is one of the fundamental guarantees of the security of this institution. This status stems directly from the Notarial Act, which entrusts notaries with the performance of acts with significant legal consequences, performed on behalf of the state and subject to special formal rigors. A notary bears professional and disciplinary responsibility for the performance of their duties, as well as civil liability for damages incurred while performing notarial acts. This liability is personal in nature and is further reinforced by the requirement to maintain civil liability insurance, which enhances the protection of the interests of parties using the notarial deposit.

Subject of notarial deposit

The Notarial Act precisely defines what may constitute the subject of a notarial deposit. According to its provisions, notarial deposits may primarily include money and securities.

A notary is authorized to accept funds for deposit in both Polish and foreign currencies. However, a necessary condition is that the deposited funds are directly related to the notarial act performed at the notary’s office. This means that the notary cannot accept funds intended for the performance of an act to be performed at another notarial office or without his involvement. Deposited funds are subject to special protection as they are held in a separate bank account designated solely for notarial deposits, which excludes the notary from freely disposing of them.

The second category of items that may constitute a notarial deposit are securities. They can only be accepted for deposit if they are in tangible form, i.e., in the form of a paper document. Securities in electronic form cannot be subject to notarial deposit within the meaning of the Notarial Act. At the same time, the Act allows a notary to accept all types of documents for safekeeping, including those submitted in sealed envelopes, as well as electronic data carriers, as is directly stated in Article 106 of the Notarial Act .

Procedure for accepting and implementing a notarial deposit

A notarial deposit requires the preparation of a notarial act, which means the party submitting the deposit should prepare appropriately for the visit to the notary’s office. In particular, it is necessary to gather the personal data required by the notary to properly prepare the deposit acceptance protocol and identify the parties involved. The required information will include the first name(s) and last name, parents’ names, PESEL number, citizenship, date and place of birth, marital status, as well as the current residential address and mailing address. Providing the personal data of the person entitled to receive the deposit is equally important, as the notary will use this information to determine the circle of entities authorized to release it.

The procedure for establishing a notarial deposit follows a specific sequence of steps. First, the parties agree on the deposit terms with the notary. The funds intended for deposit are then transferred to the notary’s dedicated bank account. The next step is for the parties to appear at the notary’s office with a valid ID, which allows for their unambiguous identification.

From a trading practice perspective, the clarity of the terms and conditions for the release of a notarial deposit is crucial. These terms and conditions are always precisely and unambiguously defined in a protocol or notarial deed. A formal definition of the release terms eliminates ambiguity as to what conditions must be met for the release of deposited funds, as well as who is entitled to collect them and under what procedure.

The precise wording of the deposit payment terms in the notarial protocol significantly limits the scope for interpretation by both the parties to the transaction and the notary himself. The notary is strictly bound by the content of the protocol and does not have the authority to interpret it broadly or to resolve any disputes between the parties. Their role is limited to determining whether the conditions specified in the protocol have been met.

After meeting the above requirements, the notary prepares a deposit acceptance protocol, which, as an official document, confirms both the deposit and the terms of its issuance. The final stage of the procedure is the issuance of the deposit to the authorized person after the conditions specified in the protocol are met, which is done against a receipt. If these conditions are not met or the parties’ instructions change, the deposit is returned to the depositor.

Notary deposit account

A notary’s deposit account is a special account. It is maintained solely for the purpose of accumulating funds entrusted to the notary in connection with notarial acts and cannot be used to support the notary’s business activities or to fulfill the notary’s private obligations. Regulations and banking practice require that this account be clearly designated as a notary’s deposit account, allowing for the identification of its specific purpose.

The primary effect of separating the deposit account is the complete separation of the deposited funds from the notary’s assets. These funds do not constitute their personal assets or assets related to the notary’s office. Consequently, they are not subject to enforcement proceedings against the notary, cannot be used as security for their obligations, and are not subject to risks related to their financial situation.

The separation of the deposit account is also crucial for the transparency of financial transactions and the implementation of obligations arising from the Act on Combating Money Laundering and Terrorist Financing. It allows for the unambiguous assignment of financial flows to a specific notarial act, facilitating transaction identification, analysis, and potential reporting. Thus, the Banking Law and its implementing regulations reinforce the public-law nature of the notarial deposit and its guarantee function in legal transactions.

Advantages of notarial deposit and its systemic importance

The use of a notarial deposit, documented in the form of a notarial deed or notarial protocol, provides the parties with a high level of security during the transaction, particularly in real estate transactions. As a person of public trust, the notary is obligated to ensure the proper protection of the rights and legitimate interests of all participants, significantly reducing the risk of abuse and disputes.

Funds transferred to the notary’s escrow account are deposited into a specially designated bank account held by the notary and are transferred to the seller’s account only after the conditions specified in the agreement are met. This mechanism provides protection for both the buyer and seller. The buyer is not obligated to transfer the funds directly to the seller’s account before concluding the sales agreement, while the seller gains assurance that the funds have been effectively secured and will be disbursed once the agreed-upon conditions are met.

Additionally, the notarial deposit, as funds held in a separate bank account, are protected against any third-party claims. If the real estate sale transaction falls through, the notary – in accordance with the parties’ instructions – will return the deposited funds to the account designated by the buyer, further enhancing the security and predictability of the entire procedure.

Notarial deposit in cross-border transactions

In connection with accepting a notarial deposit, the notary is obligated to identify the parties to the transaction and—in cases specified by law—determine the beneficial owner. This includes verifying the clients’ identities based on official documents, analyzing the nature and purpose of the transaction, and assessing the risks associated with the given business relationship. The notary is also obligated to continuously monitor transactions carried out within the deposit and document the financial security measures implemented.

If the nature or circumstances of a transaction raise reasonable suspicions as to its legality, the notary—as an obligated institution—is obligated to fulfill reporting obligations to the Inspector General for Financial Information. Therefore, the notarial deposit also serves a preventive function, constituting an element of the system for early detection and mitigation of the risk of misuse of civil law transactions for illegal purposes.

The importance of a notarial deposit in this context is particularly evident in commercial transactions, especially cross-border ones. Such transactions are characterized by a heightened level of risk resulting from systemic differences, a lack of personal trust between counterparties, differing legal regimes, and increased susceptibility to fraud. In such cases, a notarial deposit allows for the introduction of a neutral settlement mechanism, where funds remain under the control of a public entity until strictly defined conditions are met.

In business practice, a notarial deposit provides tangible, “hard” benefits to the parties to a commercial transaction. It enables the synchronization of the parties’ performance by linking the moment of payment of funds to the fulfillment of specific obligations, such as the transfer of ownership, making registration entries, delivery of goods, or presentation of required documents. This mechanism significantly reduces the risk of non-performance or improper performance of an obligation by one of the parties, without the need for secondary security.

As a result, the notarial depository appears to be an institution of significant practical importance, combining security, settlement, and control functions. Its role is not limited solely to the safekeeping of funds but also encompasses the implementation of significant public law obligations arising from the provisions of the AML Act. It is precisely this interweaving of private and public law elements that makes the notarial depository a key tool ensuring the security and transparency of modern trade, particularly in its cross-border dimension.

Notary deposit costs

Notarial deposit fees are determined based on the Regulation of the Minister of Justice of 29 June 2004 on maximum notarial fees. They include the fee for accepting the deposit, the cost of preparing the report, and VAT at 23%.

The amount of the fee depends on the value of the deposit and is half of the maximum rate provided for in §3 of the regulation:

• up to PLN 3,000 – PLN 50 x ½,
• above PLN 3,000 to PLN 10,000 – PLN 100 + 3% of the surplus above PLN 3,000 x ½,
• above PLN 10,000 to PLN 30,000 – PLN 310 + 2% of the surplus above PLN 10,000 x ½,
• above PLN 30,000 to PLN 60,000 – PLN 710 + 1% of the surplus above PLN 30,000 x ½,
• above PLN 60,000 to PLN 1,000,000 – PLN 1,010 + 0.4% of the surplus above PLN 60,000 x ½,
• above PLN 1,000,000 to PLN 2,000,000 – PLN 4,770 + 0.2% of the surplus above PLN 1,000,000 x ½,
• above PLN 2,000,000 – PLN 6,770 + 0.25% of the surplus above PLN 2,000,000, but not more than PLN 10,000 x ½, and in the case of activities performed between persons classified to the first tax group within the meaning of the provisions of the Act of 28 July 1983 on inheritance and gift tax, not more than PLN 7,500 x ½

Notarial deposit as an alternative to bank escrow

In practice, a notarial deposit serves a similar function to a bank escrow , but in many cases it represents a more effective solution, both organizationally and legally. Compared to escrow offered by banks, a notarial deposit is typically cheaper, structurally simpler, and quicker to implement. This is particularly important in transactions where execution time and flexible settlement terms are key. Banking procedures related to establishing escrow are often characterized by a high degree of formalization, lengthy decision-making processes, and limited individual flexibility regarding the terms of fund disbursement. While a notarial deposit allows for precise and rapid adaptation of its structure to the needs of a specific transaction.

An additional, significant advantage of a notarial deposit is the ability to directly link the financial settlement with the notarial act, which establishes or transfers the rights and obligations of the parties. This structure allows for simultaneous control of both the formal legal aspects and the financed transactions by the same, neutral entity – the notary. Consequently, this eliminates the need to coordinate activities between various institutions, reduces the risk of interpretational discrepancies, and ensures consistency between the content of the legal act and the timing and terms of disbursement. Therefore, a notarial deposit not only serves as a safeguard but also organizes and integrates the transaction process, which in practice translates into increased certainty and predictability.