As of September 1, public notaries to take over real estate contracts – Public notary system to limit malfeasance in real estate brokerage

If this fall you opt for notarizing your contract on flat purchase or any other contract with respect to legal real estate brokerage, instead of going to the court desk, you will go to a notary public.

As of September 1, Serbia will become the last European country which is implementing notaries in its legal system because, as the Ministry of justice confirmed for eKapija, it is not planning delay in the beginning of implementation of the Law on public notaries.

The responsibilities of public notary system will be implemented gradually and sole responsibility of public notaries in Serbia will first of all include contracts on real estate brokerage. It will decrease the scope of administrative work within the legislation system and enable better control of sales and purchase of real estate.

Dejan Djurdjevic, a professor at the Faculty of law in Belgrade says for eKapija that the role of the court in real estate brokerage has been limited to the fact that a court officer authorizes a signature at a contract while notaries will create real estate contracts.

Regulations governing notary activity enable parties to agree on the fact that a buyer pays a purchase real estate price into so-called notary deposit upon signing a sales contract.

- It is a special deposit account which a notary opens in one of the business banks wherefrom the funds will be transferred at the seller’s account the moment a buyer registers himself/herself as an owner of real estate. This way, both parties are protected. A seller is guaranteed the funds and a buyer that he/she will be registered as an owner of a real estate he/she buys – a collocutor of eKapija points out.

Sefedin Suljevic, a member of the Chamber of notaries of Bosnia and Herzegovina said at the presentation of the public notary system at the Belgrade’s GIZ that, as of some 7 years ago when the notary system was implemented, registration of real estate in Bosnia and Herzegovina increased for some 300%. Djurdjevic is sure that the notary system in Serbia will enable much higher level of legal protection in the real estate brokerage field but that it will not imply real estate sales price increase, as it is perhaps believed.

- Even if someone, when signing a contract, pays a higher fee at the public notary’s, in the second step a public notary institution will generate substantial savings because the number of trials will decrease so parties will not have to pay lawyers and court fees for running court proceedings. Thus, within a certain period of time, public notaries’ system will make brokerage much cheaper.

Since in 2014 a public notary form is becoming the only option when it comes to contracts related to real estate (sales, purchase, mortgage), the law implies that all contracts of this kinds will be made solely at notary’s operating at the territory where real estate is.

Extra-judicial proceedings at the notary’s

As of September, notaries will be responsible for gift agreements, agreements on division on mutual property, spouses’ property, life care contracts, legacy, and testimony. A notary is obliged to keep documents made and other documents, money and similar can be entrusted to him/her. A notary, also, can confirm existence or absence of a fact, he/she advises parties on the matters he/she is responsible for and a court can entrust him/her some extra-judicial proceedings such as a probate case.

As the Minister of justice, Nikola Selakovic, has recently said, it is planned that at one moment extra-judicial proceedings is transferred to public notaries. In 2012, Serbia had 31% of unsolved probate cases while in Croatia, where public notaries deal with this, only 13% which is almost three times less.

The implementation of the public notary system, legal services will be more available to citizens. As Djurdjevic explains, today there is no court at the territory of each municipality in Serbia but each municipality will have a notary.

- At the territory of the First Primary Court in Belgrade, for instance, you have five municipalities and one court and now there will be 21 notary for these five municipalities. Thus, not everybody will have to come to one court or municipal desk but at more than 20 public notaries.

The main problem of implementation of public notary system in Serbia is the number of candidates interested in the notary position. This was the crucial reason why the implementation of the Law on public notaries has been postponed for two times already

Lack of candidates

The Law on public notaries implies that, according to the rule, for the area of one municipality, i.e. city assembly or a town, there is at least one public notary vacancy and where the population density is higher and business operations more intensive, a public notary vacancy comes on every 25.000 people.

As eKapija finds out at the Ministry of Justice, a total of 154 candidates have passed the public notary exam so far which is sufficient for set up of the Chamber of public notaries. The number has still not been well-distributed per territories. Belgrade thus has even more candidates than it takes while Bor, Vranje, Kikinda, Krusevac, Negotin, Paracin, Prokuplje, Smederevo, Uzice and Pirot still do not have a single candidate.

Before the set up of the Chamber of public notaries and for complete implementation of notaries’ system in Serbia, it is necessary to carry out changes of the Regulation of temporary number of public notary vacancies and official headquarters of public notaries. It is necessary to adopt the Law on changes and amendments to the Law on extra-judicial proceedings as well as the set of laws important for the public notaries’ department functioning.

Ivana Bezarevic