Real Estate Purchase Agreement

The purchase agreement on its own is not enough for registration of title in the land register – you also need a clausula intabulandi (registration consent) by which the seller expressly consents to the buyer being entered as the new owner. This is a rule of Croatian law flowing from the principle that the contract itself does not transfer ownership but only creates an obligation to transfer it. The clausula intabulandi may be included in the purchase agreement as a separate clause or issued as a separate document once the price has been paid. Without it, the land registry court will not carry out the registration even if the contract has been certified and the price paid. This protects the seller, who can withhold the clausula intabulandi until the full price is received. Where the purchase is financed by a loan, the bank usually holds the clausula intabulandi as security for the term of the loan. Our contract template contains a properly worded clausula intabulandi.

Practice and the law allow different solutions depending on what the parties agree and how payment is made. The safest arrangement for both parties is simultaneous performance – payment of the price and delivery of the clausula intabulandi take place at the same moment, usually before a notary public. The seller may give the clausula intabulandi in the contract itself if he or she trusts the buyer or if the price is secured by another mechanism. The buyer may pay the price into a notarial escrow deposit with instructions that the funds be released to the seller only once the clausula intabulandi has been handed over. Where the purchase is financed by a loan, the bank pays the funds to the seller only once it has the clausula intabulandi together with consent to registration of the mortgage. It is advisable for the clausula intabulandi to be issued only on receipt of the price, so that the seller is protected. The contract can set out the conditions and the deadline for handing it over.

If the seller refuses to give the clausula intabulandi after you have paid the purchase price, you are entitled to bring court proceedings to obtain a judgment that replaces the clausula intabulandi. Once the court has established that the contract was concluded and the price paid, it will give judgment permitting registration of title in your favour. The judgment serves as the clausula intabulandi and is the basis for entry in the land register. The proceedings can take from a few months to a year, depending on the complexity of the case and the court’s workload. To avoid this situation, never pay the price without a safeguard – a notarial escrow deposit or simultaneous exchange. We advise using an escrow account with a notary public, where the funds are released only once all the documents have been handed over. Instructing a lawyer to prepare the transaction significantly reduces the risk of such situations.

Certification of the signatures on a real estate purchase agreement by a notary public is mandatory for registration of title in the land register. The land registry court will not carry out registration on the basis of a contract with uncertified signatures, because the law requires the documents for registration to be public or publicly certified. Certification of a signature confirms the identity of the signatory and the date of signing, but the notary public does not check the content of the contract. Solemnization is a stricter procedure than certification, in which the notary also checks the content, but it is not mandatory for a sale of real estate – certification is enough. Certification costs from 13 to 66 € depending on the value of the property. The notary public reports the transaction to the Porezna uprava (Croatian Tax Administration) ex officio. We recommend having a lawyer review the contract before certification, so that you can be sure your interests are protected.