Completing a property sale

The order of a sale

If you know the order in advance, it is clear at every stage who does what and when the money changes hands. A property sale contract is certified by a notary, so most steps take place with the notary involved.

Check the documents before the deposit. If a problem comes up after the deposit has been paid, getting it back may become a dispute. What an extract (kupcha) is and how to check it is covered in a separate guide. Below is the usual order; with a mortgage, co-owners or a representative, additional steps appear in between.

• Checking the property and the documents: the extract, encumbrances, who is registered as a resident at the address
• Deposit agreement: in writing, notarized, with its terms
• Going to the notary for the sale contract: the parties present their documents and the registry is checked
• Payment and notarial certification of the contract: ask the notary how and at what moment to pay
• State registration is done from the electronic copy of the contract, and ownership passes to the buyer at exactly this moment
• Getting the new extract and handing over the apartment

The deposit: in writing and notarized

A deposit is money the buyer gives the seller toward the final price. It confirms that the contract has been concluded and secures its performance. The parties agree the amount themselves. State explicitly in the agreement that the deposit is deducted from the final price.

The Civil Code requires a deposit agreement to be made in writing, whatever the amount. For a property sale, the agreement must also be notarized. If the house is the spouses’ joint property, notarizing the deposit agreement also requires the notarized consent of the seller’s spouse. If this rule is broken, or it is unclear whether the payment made was a deposit, the amount is treated as an advance payment unless proven otherwise. That is why the word “deposit” must appear in the document explicitly.

What happens to the deposit if the contract is not performed depends on who is responsible. If the party that gave the deposit is responsible, it stays with the other party. If the party that received the deposit is responsible, it must return it in double. Unless the contract provides otherwise, the responsible party also compensates losses, taking the deposit into account. If a contract whose performance has not yet begun is terminated by agreement of the parties or because performance is impossible, the deposit is returned.

The agreement should contain at least the following:

• The parties and the property address as in the extract
• The deposit amount in figures and in words, the date and the method of handover
• The final price and the date of the visit to the notary
• What happens if one of the parties backs out
• Arrangements about furniture, utility debts and deregistering residents from the address

Documents: who brings what

The official list of documents may change. Find out the current list in advance from the notary or on the ASAN service information page.

According to the ASAN service list, the seller brings a document confirming ownership (the extract) and a certificate from the registry that the property is not mortgaged or under attachment; the notary also checks the registry data, including encumbrances, electronically. If the seller is married, a marriage certificate and the notarized consent of the spouse are required. If an apartment, residential house, garden or garden house is being sold, the notarized consent of all adult family members registered at that address is required. Both parties come with ID. If one party acts through a representative, a notarized power of attorney is needed.

Also ask the seller for the technical passport and the plan. The notary may not require them, but they will be useful for comparing the actual layout with the document and spotting unregistered changes. The notary personally checks the seller’s right to dispose of the property, the encumbrances in the registry and the legality of the contract.

If the building is still under construction, this procedure may not be followed in full. Have a notary or lawyer review the type of contract and its terms before signing; the details of that case are in a separate guide.

Payment, registration and the transfer of ownership

In a property sale, payment must be non-cash, and that includes buying an apartment from a developer. Ask the notary in advance to which account and in what order the money is transferred, and when and under what condition it reaches the seller. The contract must state the real agreed price; ask the notary about the legal consequences of stating a different amount. If the seller insists only on cash and unofficial payment, that is a serious warning sign. A share contribution to a housing construction cooperative is also paid non-cash. And it is better to hand over the deposit not in cash but by bank transfer.

Keep the bank document confirming payment, or the document from the notary. With a mortgage purchase, a property valuation and a mortgage contract are added to this procedure.

After notarial certification, the electronic copy of the contract is passed to the state registry. On that basis the rights are registered in the buyer’s name and a new extract is issued. You do not need to file a separate application: by law, the notarized contract itself counts as the application for registration. Ask the notary how long registration takes.

Ownership does not pass at the moment you sign the contract. It passes when the contract is registered in the state registry. Under the Civil Code, the right to possess and use the property arises from the moment of notarial certification of the contract, while the right to dispose of it, that is, to sell, give away or mortgage it, arises after registration in the state registry. The Civil Code also says that in case of doubt, the risks, costs and benefits connected with the property likewise pass to the buyer from the moment of registration. Agree on the date the apartment is handed over and the moment the seller receives the money with this in mind.

Spouses, minors, co-owners and a power of attorney

In each of these four cases, the sale may need an additional consent or permission. Find this out before the deposit, and get any missing consent in writing before the sale. A shortcoming discovered later can make the contract the subject of a dispute. Below are the general rules; check your own situation with a notary or lawyer.

If the seller is married, the notary usually requires the marriage certificate and the notarized consent of the spouse. By law, such consent is needed when selling the spouses’ joint property. A house bought during marriage is considered joint property unless a marriage contract or an agreement of the spouses provides otherwise. Property bought before the marriage, or received as a gift or inheritance, is usually that spouse’s personal property; but if joint funds that significantly increased its value, such as a major renovation, were invested in it during the marriage, it may also be considered joint. Under the Civil Code, such a contract concluded without the spouse’s consent is invalid, and that applies even where the buyer acted in good faith. That is, even if you knew nothing, the risk remains. If the seller is divorced but the house was bought during the marriage and the property has not been divided, the former spouse may still hold a right; clarify this with a notary.

If the property being sold belongs to a minor child, or the child has a share in it, the prior permission of the guardianship and trusteeship authority is required: the Family Code extends this rule to parents who manage the child’s property. Depending on the child’s age, the contract is either concluded on the child’s behalf by the parents, or signed by the child with the parents’ written consent. Ask the notary which permissions are needed before the deposit.

If an apartment with several owners is sold as a whole, it can be disposed of only with the consent of all the owners: each either comes to the notary in person or sends a representative under a notarized power of attorney. With shared ownership, a co-owner selling their share to a third party must notify the other co-owners in writing, stating the terms of the sale. They have a pre-emptive right to buy that share at the same price and on the same terms. If this right is violated, another co-owner can go to court to have the buyer’s rights and obligations transferred to them. If you are buying a share, first ask the notary how this right has been observed.

The parties may also take part through a representative under a notarized power of attorney. But the person who issued the power of attorney can revoke it at any time, and it ends on their death. Where possible, contact the owner directly, ask the notary whether the power of attorney is still in force, and require the owner’s personal participation.

• Spouses: the spouse’s notarized consent, the marriage contract
• A child’s share: prior permission of the guardianship and trusteeship authority, the parents’ consent
• Co-owners: everyone’s consent if the whole apartment is sold, and a pre-emptive right to buy if a share is sold
• Power of attorney: whether it is still in force, whether there is a direct line to the owner

Costs and taking over the apartment

Besides the price, a state fee and a service fee are paid. The amount depends on where the property is and whether it passes to a close relative; ask the notary or check the ASAN service page for the current amount. The Civil Code states that the costs of notarial certification of the sale and registration in the state registry are borne by the buyer. Even so, state exactly in the agreement who pays which costs.

When an individual sells property, a tax may arise. It is withheld at source by the notary who certifies the contract. If the seller was registered as a resident in the apartment being sold for longer than the period set by law, this tax is not withheld. The seller should find out the exact rule in advance from the notary or the tax authority. Who bears this cost should also be written in the agreement.

Take over the apartment under a handover act. Put in the act the keys, the meter readings, and a list of the furniture and appliances that stay. Before handover, check that there are no debts for electricity, gas, water and building maintenance. If a debt turns up, have the agreement record who pays it, so there is no dispute later.

Write into the contract when the residents registered at the address will deregister. The last task is to get the new extract: the name, address and area in it must match the data in the contract.