A Step-by-Step Guide to Buying Croatian Real Estate
Step 1: Sign a Pre-contract Agreement
After you’ve found a suitable property, you will probably be asked for a holding deposit of $3,000 to $5,000. Your agent will make a pre-contract between you (the buyer), and the seller. In this pre-contact, the purchase terms are fixed:
- Both parties are identified
- Description of the property with all of its relevant details
- Checking of all legal documents concerning the property (clean papers)
- Agreed-upon price
- Exact date of signing a binding contract
- Purchase costs
- Date and conditions of handing over the property to the buyer.
Step 2: Pay Holding Deposit
Once the pre-contract has been drawn up, you will be asked for a deposit of 10% to 15% of the purchase price. Unless the title isn’t good, you will lose your deposit if you subsequently pull out. On the other hand, if the seller pulls out, he or she will have to repay double the sum of the deposit to you.
Step 3: Conveyance of Title
The lawyer now handles the conveyance of the property. The lawyer draws up a binding contract, which is attested by a notary, usually around 30 days from the pre-contract stage. The balance of the purchase price is paid to the seller, and the buyer takes over the property. The lawyer then proceeds with the formal transfer of legal title into your name. The attorney applies in your name for the approval to the Ministry of Foreign Affairs (MFA).
When requesting an approval to purchase property, the following paperwork must be supplied:
- A written request signed by you, the petitioner
- The sales contract
- An excerpt from the land books for the particular property (ZK izvadak). This document is usually obtained in each municipality (Opc´ina) at the local municipal court’s (Opc´inski Sud) land book division (Gruntovni Odjel)
- A document from the local municipality (Opc´ina), from the following department: Ured za prostorno planiranje. This document is the Uvjerenje onamjeni for the particular property
- Proof of citizenship for both buyer and seller (photocopy of passport). Photocopies must be notarized by a Croatian public notary.
The request and accompanying paperwork has to be forwarded to: Ministarstvo Vanjskih Poslova, Odjel za Konzularne Poslove, Medulic´eva 34 10000 Zagreb, Croatia.
Consider Paying for Your Property in Full
As the property market in Croatia is moving so quickly, most private buyers complete the purchase process before getting MFA approval. By doing so, you can move in straight away and live on the property while you wait for approval from the MFA. There is nothing illegal about this, but remember, the house or property does not belong to you in the eyes of the Croatian authorities, as you have not signed the land register. As a result, you are not entitled to the use of any utilities.
If you are planning on paying in full and occupying the premises, be sure to make arrangements with the previous owners to keep the utilities on in their name. Once the utilities are cut off, only the previous owners will (legally) be able to get them turned back on for you, at least until your MFA approval comes through. It is not uncommon, though, to go to the utility board offices with the sellers and make arrangements in person (the utilities will be in their names, but the payment scheme will be changed to have the money debited from your account).
Utilities aside, another boon of buying outright is that while you are waiting, you are authorized to start refurbishing and renovating any buildings or structures, just as long as the renovations are within the footprint of the pre-existing structure. Also, be sure to have your lawyer put markers on the deeds so that it is apparent that ownership is being applied for. An unscrupulous vendor could mortgage or even sell the property out from under your feet while you’re applying for MFA permission.