Real Estate Transactions and Contracts

Safe Apartment Purchase: 5 Hidden Legal Risks You Must Check Before Signing the Contract and Making Payment

Purchasing an apartment is, for most people, one of the largest and most important financial decisions in their lives. Regardless of whether you are buying a property in a new building or an old building, the process involvingreal estate transactions and contractsthat accompany it carries serious legal challenges.

Although the visual inspection of the apartment and location play a major role in your choice,the legal clarity of documentationis what guarantees that you will not be left without both money and a roof over your head. Unfortunately, in practice, hidden problems are often noticed only when it is too late – after the contract is signed and the money is paid.

In order to maximally protect your investment, we highlight5 hidden legal risksthat you must check in detail before you put your signature on a real estate purchase contract.

1. Multiple Sale of the Same Apartment (Burden of the Past)

Although the introduction of the public notary system and its connection with the Real Estate Cadastre has drastically reduced the risk of multiple sales, it has still not been completely eliminated.

This risk is particularly pronounced in specific situations:

• Older contracts not executed in the cadastre:If the seller purchased the apartment 15-20 years ago and never registered as the owner in the cadastre, there is a risk that the same apartment in the meantime was the subject of some other legal transaction or enforcement.

• Purchase in the early phase of construction:When purchasing apartments under construction, it is crucial to verify that the investor has properly recorded all preliminary contracts and that a note has been entered in the database so that the same apartment is not offered to another buyer.

2. Hidden Mortgages and Enforcement Annotations

Checking the property sheet (cadastral extract) is the first step, but superficial reading can be fatal. In addition to the classic bank mortgage, there may be other dangerous encumbrances on the apartment:

• Litigation annotation:This means that a third party is disputing ownership of that apartment in court. If you purchase an apartment with this annotation, you risk losing the property if the plaintiff wins the case.

• Enforcement annotation:If the seller has debts, the enforcement agent may initiate the sale of the apartment to satisfy the debt. If this annotation appears before you are registered as the owner, your purchase becomes extremely complicated.

3. Rights of Third Parties (Marital Property and Heirs)

Serbia is a region where family relations are often legally unregulated, which directly affects real estate transactions.

• Property acquired during marriage:If the apartment is registered only in the husband's name but was acquired during the marriage, it constitutesjoint marital property. For the sale of such an apartment, the written and notarized consent of the spouse is required. Without it, the defrauded spouse may judicially challenge the purchase contract.

• Inheritance rights and extrajudicial settlements:If the seller inherited the apartment, the probate decision must be checked in detail so that a statutory heir does not subsequently appear claiming their forced share.

4. Problematic Documentation in New Construction (Building and Use Permits)

Purchasing an apartment directly from an investor in Pančevo or any other city is attractive due to VAT refunds, but carries specific risks:

• Deviation from the building permit:If the investor built an extra floor or exceeded the building envelope, the building will not be able to obtain ause permit. This means you will not be able to register the apartment in your name, nor sell it later through a housing loan.

• Legal status of the land:It is very important to verify whether the investor has resolved property-legal relations on the land under the building (ownership right or construction right), because without that there is no successful registration.

5. Pitfalls in the Text of the Purchase Contract Itself

Real estate transaction contracts must not be formulaic. Every sentence in the contract must precisely protect your rights. The most common omissions in contracts are:

• Undefinedclausula intabulandi:This is the unconditional consent of the seller that the buyer may be registered in the cadastre as the new owner. If this clause is ambiguous or conditioned on something that has not been fulfilled, the Cadastre will reject your registration.

• Unspecified deadlines for possession and penalties:If the seller is late in handing over the keys or the investor exceeds construction deadlines, the contract must clearly define monetary penalties per day or month of delay.

• Regulation of taxes and bills:The contract must precisely define who bears the costs of tax on the transfer of absolute rights (or VAT), as well as the seller's obligation to provide evidence that all utility bills have been paid up to the date of handover.

How to Protect Yourself? Professional Legal Assistance in Real Estate Transactions

Many buyers believe that by engaging a real estate agency or simply going to a public notary they are fully protected. However, the notary's duty is to verify the form and obvious impediments in the system, while detailed property history, analysis of hidden risks, and tailoring the contract to your specific interests fall within the domain of attorneys.

When it comes toreal estate transactions and contracts, engaging a qualified attorney before paying any deposit or advance represents the only true insurance policy for your money.

Are you planning to purchase an apartment or house in Pančevo and the surrounding area?Do not leave your largest life investment to chance.Advokatska kancelarija Miković - Bosiljprovides complete legal support in the real estate transaction process – from detailed verification of documentation and registration history, through drafting of secure preliminary contracts and contracts, to successful registration of your ownership right in the cadastre.

Contact usand secure yourself peace of mind during the property purchase.