Lawyers again in courtrooms - How will amendments to Law on Notaries affect real estate sale contracts

After four and a half months of strike, lawyers returned to courtrooms on Monday (26 January 2015) upon having their demands for amending regulations on public notaries and on lump sum taxation of lawyers accepted.
Following months-long unsuccessful attempts to find common ground, expert teams of the Justice Ministry and the Bar Association of Serbia finally reached an agreement early this year, based on which the Serbian Parliament last week urgently adopted amendments to the Law on Public Notaries, Real Estate Trade Law, Law on Extra Judicial Procedure, Family Law, and the Inheritance Law.
From the viewpoint of lawyers and citizens, the most important change in the Law on Public Notaries is that public notary records will no longer be mandatory for all real estate sale contracts. What changes have been introduced when it comes to this type of contracts is revealed by Ivan Petrovic, senior lawyer, and Nikola Vukotic, partner at Belgrade-based law firm Jankovic, Popovic, Mitic, in a talk with eKapija.
- Public notary record is a special kind of document that is, pursuant to law, made and verified by public notaries. Aside from public notary record, law also recognizes some other documents created or verified by public notaries. Amendments and supplements to the Law on Public Notaries prescribe the form of public notary verification - solemnization - as mandatory for real estate sale contracts. That means that real estate sale contracts can also be made by contracting parties, while the verification of such contracts is to be done by public notaries, in a similar way competent court used to do it before public notaries were introduced. Only in specific situations can the form of public notary record for a real estate sale contract be mandatory, like, for example, in case of life endowment contracts - our interlocutors explain.
Also, in the form of public notary record, public notaries will be making only contracts governing the disposal of real estate owned by people incapacitated to work.
Different responsibilities of notaries and lawyers
During the lawyers' strike, Justice Minister Nikola Selakovic stressed that if lawyers wanted to make real estate sale contracts, they had to pledge their property as security, just like notaries did. However, lawyers in Belgrade conclude that "both notaries and lawyers guarantee for their work with their entire property."
- Professional responsibility of lawyers and public notaries is quite different, in line with their different roles in the process of making and verifying real estate sale contracts. Lawyers represent the interests of their plenipotentiary, while public notaries always take a neutral stance and report to both parties equally.
Rates
Another topic that has been discussed since the introduction of public notaries is the price of services provided by notaries. According to Petrovic and Vukovic, rates charged by lawyers and public notaries cannnot be compared because the services they offer are quite different, regardless of the fact that their result is seemingly the same.
Sale of non-registered facilities
It was also mentioned that the involvement of notaries in the real estate sale process caused a problem with the sale of apartments under construction and those undergoing the legalization process, that is, non-registered facilities. Petrovic and Vukotic point out that the problem of sale of apartments and facilities in the legalization process depends on further application of the Law on special terms for registration of facilities undergoing the legalization process, which forbids the transfer of rights in illegal facilities and apartments before relations pertaining to the payment of building land development fees are regulated.
What does realty agents say?
The demand to supply ratio is the only factor affecting the real estate sales, which means that the introduction of public notaries and amendments to the Law on Public Notaries neither decreased nor increased property sales, Nedeljko Malinovic, the owner of the realty agency Legat, says in a talk with eKapija.
- Notaries are welcome because they take their share of responsibility, which raises the level of security in real estate transactions - says Malinovic.
When asked if public notaries make it more difficult to sell apartments under construction and real estate undergoing the process of legalization, Malinovic replies he has no such information.
When it comes to the costs of verification of contracts, our interlocutor notes that such fee was earlier paid to the court, adding that the services provided by notaries are bit more expensive.
The owner of Legat also says it takes the longest to get public notary record in Belgrade because real estate sales are the highest in the Serbian capital.
Irina Milosevic

JPM & Partners AOD

Ministarstvo pravde Republike Srbije

Advokatska komora Srbije

Legat Co d.o.o.

law firm Jankovic Popovic Mitic

Ivan Petrovic

Nikola Vukotic

Nedeljko Malinovic

lawyers on strike

lawyers

lump sum taxation

Law on Public Notaries

Law on Real Estate Trade

Family Law

Inheritance Law

public notary record

public notaries

notaries

Nikola Selakovic

sale of apartments under construction

sale of non registered facilities

sale of illegal facilities

notary record

solemnization