Making a decision to purchase real estate whether it involves land, a building, a specific part of a building (such as an apartment, business premises, garage, or garage space), or another facility inevitably raises a series of questions that can only be answered by reference to applicable legal provisions.
It is therefore advisable to seek the assistance of an experienced attorney in this field from the very beginning. The following text highlights key issues requiring special attention, which can serve as an initial guide in this often complex process.
CADASTRAL RECORDS
First, you must review the data in the cadastral records for the property or land you intend to purchase. This can be done by entering the cadastral parcel number or the property’s address into the online real estate cadaster database.
While public access to this database provides basic property information, professional users of the “e-Cadaster” service can access more detailed data.
The property you are purchasing must be registered in the cadastral records of the municipality where it is located.
For properties under construction, only a “pre-record” may exist in the cadastral register. Final registration can only occur after a use permit is issued.
According to the Law on Planning and Construction, the construction permit for properties under construction must be submitted to the cadaster for a “pre-record.”
However, if a “pre-record” has not been made, this adversely affects the legal security of transactions for those properties.
The seller of the property must be registered as its owner in the real estate cadaster, as only the registered owner is authorized to transfer ownership rights.
In some cases, the seller may authorize another person to conclude the sales agreement on their behalf.
It is not uncommon for a seller to be unregistered as the owner, often because the legal basis for their ownership (e.g., a sales or gift agreement) has not been submitted to the cadaster.
While this does not always indicate a legal issue, it may delay the purchase process.
Another critical element to review in the cadastral record is the presence of encumbrances, as they limit the property owner’s rights.
Any encumbrances, such as mortgages, easements, or records of restrictions (e.g., prohibition of alienation, lifetime maintenance agreements, or cultural property status), transfer to the buyer and could influence the decision to proceed with the purchase.
SALES AGREEMENT
Once all necessary checks are complete, the sales agreement is finalized. The content and form of sales agreements are regulated by the Law on Obligations and the Law on the Transfer of Immovable Property.
The agreement must be notarized by a public notary in the jurisdiction where the property is located. If the notary finds that the property lacks a use permit or is undergoing legalization, they are required to issue a warning and may refuse to notarize the agreement if the parties do not address this issue.
The sales agreement must precisely describe the property as per the cadastral records and specify the purchase price.
Under the Foreign Exchange Management Law, the price may be expressed in euros, which is an exception to the general rule that transactions in Serbia must be conducted in dinars.
According to the Law on the Prevention of Money Laundering and Terrorism Financing, cash payments are restricted.
Payments of 10,000 euros or more (or the equivalent in dinars) must not be made in cash, even if spread across multiple related transactions.
For the buyer to register ownership in the real estate cadaster, the sales agreement must include a “clausula intabulandi,” which is the seller’s unconditional consent for the buyer to register as the owner. If this clause is absent, a separate document containing the seller’s consent, notarized by a competent public notary, is required.
Registration in the cadaster, along with the sales agreement, completes the transfer of ownership to the buyer.
The information provided herein is for general informational purposes only and does not constitute legal advice. Petrovic & Partners Law Firm disclaims all liability for actions taken or not taken based on the contents of this publication.
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