Poland’s Developer Guarantee Fund (DFG) — PLN 28 Million Paid Out and How It Protects Buyers

The Deweloperski Fundusz Gwarancyjny (DFG — Developer Guarantee Fund) is a buyer-protection mechanism for new flats in Poland, introduced by the 2021 Developer Act. Since its launch the fund has paid out more than PLN 28 million to affected buyers. Below we explain how DFG works, when it pays out and what your rights are as a purchaser.

Key fact: DFG is compulsory insurance for developers — if a company goes bankrupt, the fund reimburses buyers for amounts held in escrow, up to 100% of their payments.

What is the DFG and who funds it?

The DFG is administered by Poland’s Insurance Guarantee Fund (UFG). Developers are required to pay contributions of up to 1% of the flat price (the exact rate depends on the type of escrow account used). Those contributions accumulate in a pool from which claims are paid when a developer becomes insolvent or fails to meet its contractual obligations.

When does the DFG pay out?

DFG protection is triggered in three situations: the developer is declared bankrupt (restructuring or insolvency proceedings), the developer contract is legally terminated due to the developer’s fault, or the development is not completed by the agreed deadline. The fund reimburses the amounts held in the residential escrow account — up to 100% of payments made.

What does the DFG cover, and what does it not cover?

DFG covers payments made through an escrow account linked to a mandatory open or closed escrow operated by a bank. It does not cover: payments made outside the escrow (e.g., cash to the developer directly), fit-out costs borne independently by the buyer, or losses from market price increases during the wait for reimbursement. Always pay exclusively to the escrow account — never directly to the developer’s own account.

How do you verify that a developer is contributing to the DFG?

Developers are obliged to state the escrow account number in the developer agreement. Before signing, ask for confirmation that the project is covered by the DFG — a reputable developer will provide this without hesitation. If they refuse or answer vaguely, treat it as a red flag.

DFG is not enough on its own — additional safeguards

DFG is an important protection, but it does not replace due diligence before purchase. Verify the developer’s financial health (accounts, completed projects, customer reviews), confirm the building permit is in force and check the escrow account status. An experienced property agency can identify risky projects before you sign.