Lessees to provide labour towards outstanding rent payments due to their local authority

Regard should be had to the provisions of the Polish Civil Code (specifically its art 659.2) which envisage definition of rent in reference to non-pecuniary benefits. In particular, lessees may be required to provide certain services to the local authority in consideration for their use of public housing, such as cleaning or construction services. Even if the original contract executed between such a lessee and the local authority provides for rent payments in pecuniary form, there is nothing to prevent the parties from agreeing that, in lieu of paying rent, the lessee provides services to an equivalent value, e.g. by performing specific work.

Such a possibility is available in light of art 453 of the Polish Civil Code. Where the lessee does provide labour of a certain value, her/his rent arrears should be deemed cleared. In return for deeming the lessee’s liabilities repaid, the local authority receives a service of a discrete economic value – an option which is oftentimes preferable to an accounting receivable which may be hard to enforce in practice. In an important point, any agreement in which the local authority and the lessee agree to convert the latter’s financial debt into an obligation to perform specific services or works should be drawn up in writing, and the value of the substitute benefit should be commensurate to the value of the rent arrears (otherwise, the local officials may find themselves answering questions about observing public finance discipline).