On a schedule of a property I am looking at has the phrase:
"Forma własności: hipoteczne" which I believe means: "form of ownership: mortgage"
No, it means that the property has its own deeds (Ksiega Wieczysta).
If the owner has a mortgage on the property then when they sell, they use the proceeds from the sale to clear any outstanding debt.
In Britian, this is done buy the solicitors before the money actually gets into the owners bank account so that they don't run off with the money.
...........or is it different in Poland?
There are no solicitors involved here, only a notary and client accounts aren't common practice. The purchase is complete (and binding) only when the notary signs the final act of sale, which is why you would want any debts secured against the property to be paid off before he/she signs that document. Otherwise, you're liable for them.