Legal Steps

[Steve]

Can anybody explain to me the steps in buying a property from the legal point of view?

The vendors agent is suggesting that we pay a "binder", but I don't want to pay anything before contracts have been signed.

I would appreciate as much detail as possible. I have been talking with a lawyer and have paid an advance for his fee of 1000e, but I can't seem to get much sense from him.

As far as I can understand the lawyer is also suggesting payment of a binder, with the following procedure:

1. Agree wording of contract
2. Pay binder - direct to agent
3. Pay remainder - direct to vendor
4. Grant power of attorney (apostilled - how?)
5. My lawyer and vendor sign contract
6. Lawyer registers property

which seems completely wrong to me.

From reading on the web and my common sense, I would have thought the correct procedure would be something like:

1. Agree wording of contract, ensuring that contract states how, when and where payments are to be made
2. Grant power of attorney
3. My lawyer and vendor sign contract at court.
4. Court stamps to verify that signatures and identities are valid
5. Tax paid at court
6. Council verifies that utilities have been paid
7. Property is registered in my name
8. Payment is made

I think that we will have to get another lawyer, and I want to be prepared next time, so I would be very grateful for any enlightenment.

Steve

[Peter Ellis]

Hi Steve

In haste as I have an appointment shortly. I'll give a fuller response later today. Broadly speaking it is much nearer your lawyer's suggestions than your own, which seem to be nearer UK style purchasing.

Here , if paying a deposit, you would agree the wording of the pre-contract, then pay the deposit to the vendor secured by the pre-contract, which will also specify when the balance is to be paid. The pre-contract should ensure that the deposit is tied to a specific property, rather than just getting a receipt for money paid.
Unlike in the UK, where money can follow on a few days after contracts are signed, payment must be made at the time of signing the full contract. Since this would entail a further trip out, your lawyer could deal with this for you, provided he is provided with the funds, correct documentation and Power of Attorney.

Any documentation that needs notarising is best notarised in Croatia while you are in the country, as this is simpler and cheaper. If you have to notarise things abroad, you first need a public notary, who verifies your signature. Then, because a foreign notary is unknown to the Croatian government, the foreign government verifies that the notary is known to them by means of an Apostille, which also gets spelled Apostil. An Apostille is a government to government seal that goes on the document. If you are in the UK, they do them while you wait at around UKP 20 a document, which is a good reason to do them here, where you only need the notary! The only place in the UK that does the Apostil is just behind Admiralty Arch, by Trafalgar Square.

No court is involved, other than for searches, until you are ready to enter the property in the Land Registry, which is administered by a judge. You pay the tax within the following 2 weeks. At this point the property is legally yours but vendors will give you full use of the place as soon as you signed the contract.
I know there is a suggestion in Martin's excellent book that vendors will wait six months, while you get the MFA approval, before expecting the balance after the deposit, but things have moved on and this is no longer the case.

The court has nothing to do with utilities. Your lawyer could check to see that those have been paid. Our legal dept normally wheels clients around them all to change the names and set up direct debits.

Back later

[Steve]

Peter

Thank you very much for your reply. I can't thank you enough.

With your explanation we can now understand our lawyers plan. I am pleased to say that everything is back on track. We have found the apostilles website and will be able to get our power of attorney signed by a solicitor and stamped by them.

Also, the vendor has agreed to accept the final payment following the signing of the contract which removes another obstacle.

Thanks again

Steve

[Graham Amiss - Bosmere Travel]

Steve

Peters reply to your post and your response is something that is special about a select few of the companies dealing with Croatia. You asked what is quite a complicated question and Peter replied with a comprehensive answer at no cost to you. There are others in the business who would not even know the answer, yet alone give you a reply free of charge. The same applies in the travel business, where some of the operators and 'travel consultants' know little about the country and can only tell you what is on their brochure pages.