Criminal liability for non-payment of rent. A precedent-setting court judgment in Warsaw!

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Krzysztof Bardel|
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Renting residential premises, especially nowadays, is an extremely popular form of housing. An agreement between a landlord (apartment owner) and a tenant (tenant) is, by definition, an agreement whose parties are equal. They agree that the tenant will pay a specific rent, usually monthly, in exchange for providing the premises for individual use for residential purposes. The situation becomes more complicated when the tenant does not meet his payment obligation. The scope of activities of the landlord in this situation is limited. However, criminal law comes to the rescue and the recent judgment of the district court for Warsaw Śródmieście, which sentenced a dishonest tenant for... fraud.

The nature of the lease agreement

First, it is worth briefly describing what an apartment lease agreement is. It is a mutual, bilateral agreement. This means that both the tenant undertakes to provide services to the landlord and the landlord to the tenant. Both of these benefits are dependent on each other, so one - in this legal relationship - is a kind of equivalent of the other.

In short, when concluding such an agreement, the parties agree that the landlord will make the apartment available to the tenant, and the tenant will pay him a specific amount. Both of these assurances motivate the parties to make specific commitments. This means that by concluding this agreement, the tenant brings the landlord to a specific disposal of his property, i.e. providing him with the apartment in exchange for the expected financial benefits.

What can a landlord do if the landlord doesn't pay?

Regardless of what is described above, a situation may arise in which the tenant stops paying. The reason why a tenant stops paying can vary. From the point of view of the civil law obligation to fulfill the obligation to pay rent, this reason is irrelevant. If the tenant undertakes, in exchange for providing the apartment, to pay e.g. PLN 2,500 in rent per month for each month of arrears until the end of the contract, the debt will increase. Therefore, if the contract was concluded for a year and the tenant stopped paying after 2 months, then after its completion (assuming that it is not terminated by the landlord) he will be obliged to pay PLN 25,000 along with interest.

Therefore, in order to recover its debt, i.e. overdue rent, the landlord is forced to file a lawsuit in court. As is commonly known, the processing time for such a case is - in an optimistic scenario - several months, and realistically, over a year. During this time, the landlord remains at a loss because he did not receive any fees during the 10 months that the tenant occupied his premises. After the court issues a judgment upholding the claim, the landlord may refer the case to the bailiff to initiate enforcement proceedings, which is not a guarantee that the entire amount will be collected.

As can be seen from the above, the landlord does not have many defenses against a tenant who does not comply with the contract. The described scenario only concerns the issue of debt recovery, and in reality it is often less of a problem for the landlord, because - despite not paying the rent - the tenant still occupies the premises, and carrying out an eviction is very difficult. However, this is a topic for another article.

Are there any other means for the landlord to "motivate" the non-paying tenant to fulfill his obligation?

Criminal liability for non-payment of rent

As recently shown by the judgment of the District Court for Warsaw-Śródmieście, some non-paying tenants must take into account not only civil liability in the form of a lost lawsuit and a "bailiff on their account", but also criminal liability. However, this only applies to dishonest tenants, because in their case - as the judgment described here shows - the court found that non-payment of rent constitutes a crime under Art. 286 § 1 of the Penal Code (hereinafter: "PC"), which is simply fraud.

In accordance with the above-mentioned regulation:

Whoever, in order to obtain a financial advantage, causes another person to unfavorably dispose of his own or another person's property by misleading him or her or by taking advantage of an error or inability to properly understand the action undertaken, shall be subject to the penalty of imprisonment from 6 months to 8 years.

Let us therefore analyze the features of a prohibited act that are relevant to the issue at hand, and which must be met in this case for non-payment of rent to be considered fraud.

  1. Acting in order to obtain financial gain;
  2. Causing another person to dispose of his or her own property unfavorably;
  3. By misleading her or taking advantage of a mistake.

Actions aimed at achieving financial gain

This means that the tenant's action would have to be aimed at improving his financial situation. In this case, what is important, to fulfill this characteristic, a direct increase in assets is not necessary (e.g. by adding a certain amount of money). This refers to any activity that improves the entity's financial situation. This means that failure to incur expected expenses will also constitute this act. Therefore, if the tenant does not experience the expected loss of property as a result of non-payment of rent, he or she undoubtedly obtains a financial benefit.

Causing another person to dispose of his or her own property unfavorably

From a linguistic point of view, a birthmark "leads" means behavior that is the cause of something, causing, evoking. By "disposition of property" we will mean, in this case, the lessor making a voluntary decision, although taken under the influence of the tenant's action (because he is the one who "causes" it by his actions), to perform a legal and possibly actual action, the subject of which is the lessor's property. . This regulation is obviously intended to be unfavorable, i.e. bring objectively negative consequences for the lessor/injured party. The unfavorable nature of the disposal of property does not have to mean damage to the injured party's property, but may also be expressed in the loss of future benefits or deterioration of the financial situation, after all, property within the meaning of Art. 286 § 1 of the Penal Code covers both property damage (damnum emergens), as well as lost benefits (lucrum cessans) – yes: Judgment of the Court of Appeal in Warsaw of October 18, 2019, II AKa 215/19.

Therefore, by concluding a lease agreement with the landlord and assuming the obligation to pay rent in exchange for the landlord providing him with an apartment, which is undoubtedly part of his property, the tenant has fulfilled this element of a prohibited act. By concluding the contract and making the lessor feel that the tenant was acting in good faith, he led him to conclude the contract, as a result of which he ultimately suffered damage in the form of loss of profits (lucrum cessans).

By means of misleading or exploiting an error

Misrepresentation in this situation will mean creating a false image of reality in the lessor's mind, and exploiting the error means consciously using the distorted image of reality that already exists in the lessor's mind and not changing it.

According to the court, the tenant's action in concluding the contract and assuring the landlord that he intended to pay clearly constituted a misrepresentation. In this case, however, it should be assumed that the tenant acted with a prior intention, and therefore entirely intentionally.

This mark is therefore absolutely crucial. It actually "weeds out" dishonest tenants who, when concluding the contract, wanted to defraud the landlord from those who stopped paying for other reasons (e.g. loss of a source of income). In a case decided by a Warsaw court, the tenant failed to pay several rents with a total amount of PLN 14,000, and at the same time boasted about his lavish lifestyle, expensive purchases and large expenses on social media, including directing a public message via YouTube. This was sufficiently clear evidence that he had funds to pay the rent, but was using them for other purposes, so that it was clear that he had entered into the lease with the intention of not fulfilling his financial obligation.

Criminal sentence only for fraudsters

As can be seen from the above, not every non-paying tenant will be a fraudster. In order to assign him criminal liability under Art. 286 § 1 of the Penal Code, he would have to conclude a contract with the intention not to pay, which will usually be very difficult or impossible to demonstrate in practice. Therefore, the judgment, although controversial, seems to express the idea of justice and does not create a risk of a dangerous precedent of excessive punishment of all non-paying tenants.

It must be clearly emphasized that not every, or even rare, failure to settle property obligations on time will constitute a crime. For the recovery of these receivables, the legislator has provided primarily a civil path and, unfortunately, taking into account all its shortcomings described in this article, it remains the only possible one unless we are dealing with a crime, e.g. fraud.

The "hero" of the criminal case underlying this article was ultimately sentenced to 2 years of restriction of liberty in the form of unpaid community service for 40 hours a month. The only thing that saved him from imprisonment was the fact that he had recently become a father, which the court took into account. In addition, he was obliged to pay PLN 5,000 to the Victims' Assistance and Post-penitentiary Assistance Fund and PLN 4,400 to cover court costs. To be precise, it should be emphasized that for an act under Art. 286 § 1 of the Penal Code, he was punished with 1.5 years of restriction of liberty, and the remaining six months are the result of causing damage worth PLN 636.

In the case, however, the court did not rule on compensation for the damage caused to the injured party by the lessor. Pursuant to Art. 46 § 1 of the Penal Code, in the event of a conviction, the court may order, and at the request of the injured party or another authorized person, apply the provisions of civil law, the obligation to compensate, in whole or in part, the damage caused by the crime. Therefore, the proceedings must have lacked this request on the part of the landlord - perhaps the civil case had already been resolved. It should be emphasized, however, that otherwise, if the damage was not repaired, the court could also award such compensation to the injured party as part of criminal proceedings.

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