When purchasing a property in Montenegro, the buyer may be unfamiliar with the local legal process. The conveyancing is carried out in the presence of a Public Notary, who is an official State appointee. The functions and official responsibilities of the Public Notary include:
- Drafting the sales contract between the buyer and the seller
- Acts as the official authority that verifies the legal status of the property
- Acts as the supervisory authority that supervises the fulfillment of all obligations of both the buyer and the seller.
Thus the Public Notary protects the rights of both the buyer and the seller as well as ensuring both parties fulfill their committments according to the terms and conditions of the sales contract. The Public Notary is also the responsible party for ensuring the conveyancing is carried out in accordance with Montenegrin law.
The transaction process
For further details please see the following link "IMPORTANT TO KNOW".
A preliminary sales contract is agreed and signed by both parties in the presence of the Public Notary. This contract is drawn up in the Montenegrin language and in accordance with Montenegrin law. The Public Notary will also sign and stamp the preliminary sales contract, thus giving it official status. Where the buyer is a foreign national, a certified interpreter is required by law to be present and to read, translate and explain the contract in the native language of the buyer. The interpreter will also sign and seal the contract with his official stamp. He will later provide a translated and sealed copy of the contract to the buyer in the buyers' native language.
It is normal for the buyer to pay an initial deposit of 10% of the purchase price on signing the preliminary contract. The closing date will also be agreed at this stage. The normal time period for completion of the transaction is two weeks from the date of the preliminary contract. This date may be varied with the agreement of the parties.
The preliminary contract becomes final on payment of the full contract price. The buyer or his agent will attend the Public Notary with confirmation that full payment has been made to the seller. Confirmation of payment is normally provided by the buyers' bank. The Public Notary will issue final papers to confirm completion of the transaction.
Where Monte Imobilia acts as agent for the buyer we will formally register the title in the name of the buyer at the Government Land Registry Office.
It is important the buyer completes the contract by the contract date. If payment is delayed beyond the completion date the contract is deemed invalid and the buyer will lose the deposit.
On completion, a Stamp Duty tax of 3% is payable to the Montenegrin Revenue Office. The Montenegrin Revenue Office normally assesses the tax based on the contract amount, but reserves the right to appraise the value of the property. The tax must be paid within 15 days of receipt of the notice. The Public Notary is responsible for sending a copy of the sales contract to the Montenegrin Revenue Office.
Monte Imobilia is happy to ensure administration of this responsibility and to make the payment on behalf of its clients.
First time purchases direct from a corporate builder-investor are exempt from this tax.