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Office of Competition and Consumer Protection

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Investments in immovable property - charges pressed by the President of UOKiK

< previous | next > 11.09.2020

Investments in immovable property - charges pressed by the President of UOKiK
  • President of UOKiK Tomasz Chróstny has pressed charges against Infinity Zieleniec Ski&Spa, CGA Invest and Gent Holding group - entrepreneurs building apartments for rent.
  • The doubts concern, inter alia, the way of informing about the rules of investment financing and the rate of return.

President of UOKiK Tomasz Chróstny initiated proceedings for infringement of collective consumer interests against companies building apartments for rent. These are: CGA Invest (former Czarna Góra Apartamenty), Infinity Zieleniec Ski&Spa and the entrepreneurs belonging to the Gent Holding group (Gent Holding, Gent Fund, Equal Real Estate). The first two companies are responsible for the construction of the condo hotels - these are respectively: already completed investment Czarna Perła (Black Pearl) in Stronie ¦l±skie and currently in progress INFINITY Zieleniec Ski & Spa in Duszniki-Zdrój, and Gent Holding - private dorm in Kraków at al. Jana Pawła II.

“We have compared the content of advertising materials with contracts concluded on the purchase of apartments under investments. The charges pressed include, inter alia, overstated rate of return in advertising materials. In each of the three cases it is calculated based on an amount lower than the one the investor has to incur to purchase the apartment. Due to this, given the high risk involved in investing in condo hotels, the rate of return offered to consumers may not be as attractive as it was communicated by the companies. Other information presented by companies might have also misled consumers by providing them with a picture of sustainable and secure investment,” says Tomasz Chróstny, the President of UOKiK.

The charges pressed by the President of UOKiK concern first of all:

  • informing about investment security - this charge pertains to Infinity Zieleniec Ski&Spa, CGA Invest.

Pursuant to the Office's findings, the purchase of apartments in condo hotels built by the above mentioned companies may be risky as the entrepreneurs do not apply any measures to protect payments due, e.g. trust accounts provided for the completion of housing investments.

  • failing to provide or providing misleading information on investment financing - this charge pertains to Infinity Zieleniec Ski&Spa, CGA Invest and Gent Holding.

The companies do not engage their financial resources into the construction. CGA Invest has completed, and Infinity Zieleniec Ski&Spa is carrying out the construction entirely with the buyers' money, which was not communicated to them. Gent Holding, in turn, implies in public communications that it constructs and develops the apartments mostly using its own resources and bank loans. Meanwhile, the main source of financing are the funds raised from issuing bonds, taking loans and receiving payments for the pre-sale of the apartments.

  • informing about the guaranteed rate of return - this charge pertains to Infinity Zieleniec Ski&Spa, CGA Invest and Gent Holding.

The charges pressed by the President of UOKiK concern also the manner of informing about the rate of return. According to the Office's analysis, it is calculated based on a lower amount, i.e., the net price of the apartment - excluding 23 % VAT. Furthermore, Gent Holding obliges the investor to bear the costs of renovation of the apartment once every five years, which are deducted from their income. In their advertising materials, Infinity Zieleniec Ski&Spa and CGA Invest communicate that the possible profit is to be paid out on a monthly basis, while according to the concluded agreements it is to be paid out on a quarterly basis.

According to the Act on Competition and Consumer Protection, proceedings for infringement of the consumers' collective interests may result in the issuance of a decision and the imposition of a financial fine of up to 10 percent of the company's annual turnover.

Consumer support:

Phone: +48 801 440 220 or +48 22 290 89 16 – consumer helpline
E-mail: [SCODE]cG9yYWR5QGRsYWtvbnN1bWVudG93LnBs[ECODE]
Consumer ombudsmen – in your city/ town or district
Regional Consumer Centres: Phone: +48 22 299 60 90 – Dlakonsumenta.pl

Additional information for the media:

UOKiK Press Office
Pl. Powstańców Warszawy 1, 00-950 Warszawa, Poland
Phone +48 695 902 088, +48 22 55 60 246
E-mail: [SCODE]Yml1cm9wcmFzb3dlQHVva2lrLmdvdi5wbA==[ECODE]
Twitter: @UOKiKgovPL

Attached files

 

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