March 23, 2010

The Law on Amendments to the Law on Sale of Immovable Property

The Law on Amendments to the Law on Sale of Immovable Property (hereinafter the “Law”), enacted in December 2009, is effective as of January 6, 2010. The Law introduces several significant fraud-prevention measures in trade with real property.

In accordance with the Law, an agreement on sale and purchase of immovable property (the "Agreement") is required to be certified before the competent court. Based on the Law, the Agreement could only be certified before the court where the property is situated.  The court keeps record of all certified Agreements in a special registry of certified agreements.

The novelties introduced by the Law are related to the duties and competences of persons authorized to certify the Agreement (the "Certifier").  Namely, the Certifier has to check the special registry kept with the court in order to examine whether the immovable property, which is subject matter of the Agreement, has already been subject matter of another agreement, i.e. if it has already been sold. If so, the Certifier is responsible to check whether the seller of the immovable property in the Agreement is the same as in the previously certified agreement. In case that both the seller and immovable property are the same in the two agreements, the Certifier must reject the certification and inform the competent public prosecutor thereof.

It should be noted that the full benefit of the changes will affect only future agreements, as the agreements concluded prior to 2010 had not been recorded with the special registry mentioned above.