LEGAL ISSUES AND ASSISTANCE
1. Why is it important to check whether the property being purchased has proper paperwork and why is it important to only buy properties that have proper paperwork?
The principle of trust in land registers establishes the assumption that the status in the land registers is known to everyone, and in the event that the actual status differs from that recorded in the land registers, the status in the land registers is taken as authoritative. No one can claim that they are not aware of the status in the land registers. When purchasing real estate, it is mandatory to check that the seller is registered as the owner, otherwise the buyer will not be able to justify his ignorance of the status in the land registers. The seller of real estate must also check the status in the land registers in order to avoid possible legal disputes if the buyer is unable to register the right of ownership over the purchased real estate.
2. How can the status in the land registers be checked and proven?
Only certified land registry extracts (colloquially called “ownership certificates”) issued by the land registry department at the request of the interested party are valid proof of ownership of real estate. A fee of 20.00 kn is paid for issuing the same. The aforementioned department can also provide insight into the documentation related to a specific real estate, files and other actions taken in relation to the relevant real estate. In addition, the status of real estate can be checked on the website (http://e-izvadak.pravosudje.hr), but this data is only authentic if the real estate in question is registered in a land registry file that has been verified, which means that it has undergone a digital file control procedure before publishing the data on the internet. In that case, the extract is marked “land registry file verified”, or if it is not verified, it is marked: “land registry file in transcript (NOT VERIFIED)”, then the party cannot rely on the data published on the internet. In any case, we suggest that the situation is always checked directly at the land registry, and not just online.
3. How to avoid fraud when buying real estate?
Before concluding a purchase and sale agreement, it is necessary to check the status of the land registry, or at least determine the following information: whether the person from whom you want to buy the property is registered as the owner, whether the property is encumbered with encumbrances, and whether there is a dispute regarding it that could affect ownership or some other registered right. If the seller is not registered as the owner, he or she must be able to demonstrate the so-called "legal sequence", or document the way in which he or she acquired the property. If the property is encumbered with encumbrances, the buyer must check whether they prevent a bank loan from being taken out and check the duration of the encumbrance, amounts, etc. in the collection of documents, and examine the possible possibilities of deleting it. If there is a dispute regarding the property, it is advisable to consult a lawyer to review the dispute and assess the possibility that the outcome of the dispute will affect the right of ownership or another right. In the case of properties (apartments) in buildings that are not condominiums, there is a possibility that the records, encumbrances, and seals do not apply to the condominium part being purchased, but this should be left to the lawyer to check. It is also advisable to include a provision in the contract that the seller guarantees that there are no unregistered encumbrances, in order to avoid the possibility that the seller, for example, has verbally agreed on an easement or similar. In addition to a detailed check of all data related to the property, the best protection for the buyer is to submit a proposal for the registration of their ownership rights immediately after concluding the contract and receiving the tabular statement, in order to prevent the seller from reselling the property in question.
4. How much does it cost to have a lawyer draw up a contract, as well as notary and registration costs?
Lawyer's fees are determined according to the Lawyer's Tariff (published in the Official Gazette 91/04), based on the value of the property. Notary fees depend on how the property is purchased: if it is not purchased through a bank loan, then they consist only of the costs of certifying the seller's signature, approximately 50 kuna, and if it is purchased through a bank loan, then there is also the cost of solemnizing the mortgage agreement and accompanying documents, which is determined according to the Notary's Tariff, again based on the value of the property. For the registration of ownership rights, it is mandatory to pay a fee of 250.00 kuna to the state budget, and if a lawyer draws up a proposal for registration, the price of the proposal is determined in accordance with the Lawyer's Tariff.
5. What is needed to register ownership rights?
The following is required to register ownership rights:
a) original copy of the contract with the seller's certified signature
b) tabular document (explicit authorization for registration of ownership rights) if not included in the contract
c) if the buyer is a natural person: a copy of the citizenship certificate (the original must be presented for inspection)
if the buyer is a legal entity: extract from the court register, not older than 30 days
d) 250.00 kn fee
e) application for registration (available in the form of a form at the land registry office). If the buyer submits it in person, then it is submitted in 2 copies, one of which is returned to the applicant with a receipt, and if sent by mail, one copy is sufficient.
6. Where and when is the application for registration of ownership of purchased real estate submitted?
The request is submitted to the land registry department of the competent municipal court in the area to which the property in question belongs, preferably immediately after the sale and purchase has been concluded and the tabular statement has been obtained.
7. How can I check what stage my registration is at?
The submitted request is assigned a Z-number and is sent to a specific clerk for resolution. The status of the case can be checked by phone or in person at the registry office, or at the reception counter located within a specific land registry department. The status of the case can also be checked via the land registry website (http://e-izvadak.pravosudje.hr, then “Login”, then “Status of the land registry case”). It is also possible to inspect the file at the land registry department of the competent court.
8. Is a lawyer always needed when buying or selling a property and registering it? Can I buy or sell real estate based on the contract form from the Official Gazette?
Formally, a lawyer is not required to conclude a purchase and sale contract, as well as the procedure for registering ownership rights. A person can conclude a contract themselves, as well as submit a request for registration of ownership rights to the competent authorities. The problem exists, among other things, due to the large number of real estate properties whose ownership is not properly regulated, i.e. the persons who present themselves as owners are not registered in the land registers. It is a common case of purchasing real estate without proper documents, where the buyer cannot register ownership of the real estate, and sometimes not even take possession of it. The consequences of such a purchase can be the loss of the invested money or long-term litigation with a questionable outcome. If it is established that the seller of the real estate is not registered in the land registers as the owner of the property, and the registered owner does not want to agree to change the registration of the owner's person, the buyer is liable for his or her carelessness due to the assumption of the principle of trust in the land registers. This principle establishes that every person is obliged to know the contents of the land registers, and if the actual situation differs from that registered in the land registers, the situation in the land registers will be relevant. The form from the Official Gazette is a standard form that can be used, but if the buyer is unable to register the ownership of the property due to incorrect filling in of the form or other facts, he will again have to seek professional help, and it is possible that significant damage will already have been caused. Therefore, purchasing real estate requires extreme caution, and with such large investments, it is recommended to seek the help of a lawyer as a professional who encounters registration issues on a daily basis, recognizes potential difficulties and can react in a timely manner to irregularities in the procedure. Given the knowledge of the entire topic and registration procedure, the process of registering ownership is significantly faster, because even the smallest procedural irregularities significantly delay the entire procedure.
9. If I submit the contract to the Tax Administration, do I need to submit it to the land registry?
Submitting a contract to the tax office is a completely separate procedure from registering ownership, and it is possible that someone is registered as the owner but has not paid taxes, and vice versa. Unfortunately, these two institutions do not yet cooperate, and submitting a contract to one has no effect on the other. Contracts must be submitted to both the land registry and the tax office, so always prepare multiple originals of the contract for the buyer, since by submitting them to the aforementioned institutions, they will immediately be left without two originals.