QUESTIONS & ANSWERS

Why is it worth signing the preliminary contract of sale in the form of a notarial deed?

The preliminary agreement of sale concluded in the form of a notarial deed guarantees to both parties that, in the event that one of the parties through their own fault did not accede to conclude the final contract, the other party may claim its conclusion before the court. The agreement concluded in writing gives only the possibility of obtaining compensation for damage suffered as a result of the failure to effect the final contract.

How different is the down payment from advance payment and what is their value?

The down payment gives the possibility of binding the parties to the preliminary agreement also in financial terms. A party who through their own fault does not proceed to the final contract shall pay compensation, which is the amount of the down payment. The seller shall return the down payment, which they received and the same amount as compensation. The buyer loses the down payment, which they gave to the seller. The amount of the down payment shall not exceed 20% of the price. The advance payment does not produce such effects and is only the sign of concluding the contract and shall be credited towards the price. The amount of the advance may be varied.

What is the difference between the preliminary agreement and agreement imposing an obligation?

The agreement imposing and obligation is the first part of the sales contract. The Parties undertake to conclude an agreement of transfer of ownership because the conditions necessary for transfer of ownership have not been fulfilled. The deadline for the conclusion of agreement of transfer of ownership is subject to the fulfilment of those conditions. The preliminary contract only obliges the parties to enter into a future specific contract, e.g. sale agreement, exchange agreement, abolition of joint ownership, etc. The deadline by which the parties shall conclude a final agreement shall be clearly indicated in the preliminary agreement.

Can the price be paid at the sale contract by depositing the money with the notary?

Depositing the amount representing the selling price with the notary is the safest form of payment for the purchase of the real estate. In this way, the seller can avoid the uncertainty that is connected with the fact that on the signing of a notarial deed, they are disposed of the ownership of the real property and the buyer has not affected the payment of the price by bank transfer. For the buyer, the fact that they do not have to bring cash with them to pay the price is convenient. The notary makes the transfer of funds deposited with them directly to the seller's account, immediately after the signing of notarial deed.

When is it necessary to establish the Mortgage Register for the cooperative ownership right to the premises?

The establishment of the Mortgage Register for cooperative ownership right to the premises is only necessary in case of financing the purchase with a bank loan. The Bank requires that in order to collaterize the loan, the mortgage shall be established. The mortgage arises upon the entry into the mortgage register. To effect this, the mortgage register shall be arranged.

Can the property be sold before registering the current owner in the land and mortgage register?

The selling of the property, for which the mortgage book has been established, is effected as from the moment of signing the notarial deed documenting the transfer of ownership. Therefore, the transfer can take place even before the entry of the owner into the Land and Mortgage Register.

Is it worth converting the cooperative ownership right to the premises into the separate ownership right?

Yes, it is worth because thanks to this the full ownership status is achieved. The real property can, among other things, be encumbered with the personal servitude of the apartment, which cannot be done in the case of cooperative rights to the premises.

When does the transfer of ownership right to the real property in favour of the buyer take place?

The transfer of ownership right in favour of the buyer takes place upon the signing of the notarial deed documenting the sale agreement and not upon the payment of the price. The payment of the price and handover of the real property may be deferred in time.

How to secure the right to live in an apartment for the seller?

The owner may establish in favour of the third party the personal servitude of the apartment, which guarantees free and a lifetime living in the apartment. The servitude shall be registered in the Land and Mortgage Register.

Is it possible to sell the real property with the mortgage which was established to secure the bank loan?

Yes it is possible. A prerequisite in this situation is to obtain the consent of the Bank for the early repayment of the loan. In this case, it is necessary to provide a statement from the Bank of the amount of debt remaining to be paid, together with its commitment that after full repayment of the loan, the bank will agree to delete the mortgage. The payment of the part of the price shall be in the form of transfer directly to the account of the Bank which granted the loan.

What are the tax consequences of the sale of the real property before the expiry of five years’ period from its acquisition?

The sale of the real property within 5 years from the end of the calendar year in which the acquisition necessitates the payment of income tax from physical persons. You can free yourselves from payment of the tax, provided that the funds from the sale are allocated within 2 years for residential purposes

When could the money be donated without having to pay the tax on donations?

The donation of money among the most closely related persons is exempt from tax, subject to its notification to the tax office within one month and documenting the money transfer in the form of bank transfer or postal order. There are no limits when it comes to the amount of freely given amount of money.