Real estate transfers in Slovakia | Common mistakes and Invitation to a webinar

• Slovakia

• Real estate

02-08-2021

In the course of providing services to clients in the field of real estate transfers, we encounter various issues. A failure to comply with the formal conditions set by law often occurs, which involve more formalities with their transfers than with other commodities. In this short article, we point out the most common mistakes that could be made when acquiring real estate in Slovakia. In the next articles we will focus on Polish and Czech real estate markets:

1. Invalid contract

Cadastral departments of the district offices are in charge of the real estate transfers. They are governed by the Cadastral Act, which exactly specifies what shall be included in the contract, the subject of which is the real estate transfer. In addition to the contracting parties and other general requirements, it includes a precise description of the legal act (subject, place and time) and an exact description of the real estate. It often happens that, although the contract contains this information, it does not contain it to the extent specified by law and therefore it cannot be used. Although only the seller’s signature needs to be officially verified, we recommend verifying the signatures of both parties for the avoidance of any doubt.

2. Invalid power of attorney

It is common for the parties not to sign the contract in person, but via authorized representatives on the basis of a written power of attorney. As with the contract, the power of attorney shall fulfil several requirements – the signature of the principal shall be officially verified, the power of attorney includes a precise description of the property and a description of the legal act. Please note that the power of attorney shall be inseparably bound to each copy of the contract.

3. Violation of pre-emption right

If the real estate belongs to several co-owners, it is necessary to pay attention to the pre-emption right of the co-owner or co-owners when transferring the real estate. This gives a pre-emptive right to purchase the share if another co-owner decides to sell his share. If the share selling the co-owner does not offer its share to the other co-owners, the co-owners concerned may decide whether (i) they will object the invalidity of the contract, or (ii) they will demand the sale of the share to them under the same conditions, or (iii) they will retain the pre-emption right also against the new co-owner.

4. Acquisition from the non-owner

There are several forms of acquisition from the non-owner, but in general it means that the seller does not have a valid ownership right and thus cannot validly transfer it to the buyer. This can also happen if the seller is duly registered as the owner in the real estate cadastre. Recent developments in case law have tightened up the circumstances in which it is possible to acquire ownership from a non-owner and therefore we do emphasize the need for a thorough examination of the seller’s ownership right.

5. Restitution

Restitutions have been ongoing in various forms since the 1990s. Even the initiated restitutions last for a considerable number of years and data thereon are not transparently publicly available. For this reason, it may happen that for example for the acquired land restitution claims will be filed, or such claims have already been filed by the original owners. Therefore, we recommend verifying the ongoing restitutions regarding the intended real estate at the relevant authorities.

6. Construction as part of land

The general legal principle applicable in most countries states that a part of the land is everything that is connected to it in a natural or artificial way. Unfortunately, at present time, this principle does not apply in Slovakia, which results in absurd situations where the owner of the land is different from the owner of the building located on it, which may prevent the landowner from using the land properly.

If you have any questions relating to real estate acquisitions in Slovakia now, you can contact our expert in Eversheds Sutherland Slovakia, Annamaria Tóthová.