BUYING AN APARTMENT FOR BEGINNERS - PART ONE

Walking around Belgrade, I thought about how little was left of the city I grew up in as a child. Near my street, I pass a Starbucks. In the past, there was a cafe called "Three Leaves of Tobacco" where the "Starbucks" now stands. Only the pastry shop "Pelivan", nearby, still exists, as a memory of times past. Belgrade has built up and old houses have been replaced by new buildings. In the past, no attention was paid to the parking lot. Today, a parking space in the city center is more valuable than a studio apartment used to be. New tenants have taken up residency in these new dwellings. As of lately, mainly Russians, who escaped from the sanctions in their country, more than those escaping from the war. The market for the sale and lease of apartments experienced a growth that was not seen even in the 2000s after the Russians bought up everything they could in Montenegro. There are new buildings and construction sites everywhere. Many of you, dear readers, are thinking of returning to Serbia one day. Many of you intend to buy a house or an apartment, maybe even some land in Serbia. How can this be done safely? The act of buying is simple, you sign the contract, pay the agreed price, and the real estate is yours. However, the signing of the contract is preceded by a series of actions, which are primarily related to the verification of documentation. Real estate is abundant on the market, and there are many intermediary agencies. So how do you choose? Financial safety is a priority. I point this out because it often happens that people take a liking to an apartment but completely ignore their lawyer's warnings about potential problems with the sale. Many buy apartments under construction at more favorable prices. A building under construction is a future apartment. The moment you buy such an apartment, it is more of a project than a reality. Until the construction of that building is finished, a lot can happen to spoil your plans. Whenever possible, you should buy an apartment from a legally registered property owner. If the seller is registered as the owner, the next question to ask is whether they acquired the apartment during a marriage, by inheritance, judgment, or otherwise. If the apartment was acquired during marriage, it represents the joint property of both spouses. This situation can be resolved by the declaration of the spouse that agrees with the sale of the apartment by the other spouse. A notary public can also be helpful with this. If the apartment was acquired in another way, for example, by inheritance, then it represents the separate property of the seller, and the consent of the spouse is not required. Then it is necessary to check for any possible liens on the property. By checking the local real estate registry, it can be determined whether an encumbrance or lien has been applied to that property. You can get this information from the local land titles registry, and even more easily from a notary public. If the documentation is valid, then you must check the apartment itself. This is important so that you can move in immediately after the deal is finalized, avoiding obstacles like a current tenant living on the property who should have moved out before your possession date. The details can be scrutinized after these major steps are confirmed and accurate.  As the saying goes, the devil is in the details, so look closely at those details. Certainly, it is necessary to check the quality of construction and built-in materials. There is also parking to consider. This has become a problem throughout Serbia. Parking zones have been introduced in every city, even in small towns you can find signs with information about parking zones and the allowed parking times. In Belgrade, garages and parking spaces are rented on average for 100 to 200 euros per month. If you do not have secured parking, you as a tenant can pay a considerable amount extra each month of up to several hundred dinars for parking. There are certain parts of the city where parking is free. If there are few marked parking spaces on the street, expect that one day you will circle the building looking for a place to park. Never buy an apartment if you or someone close to you has not physically gone into the apartment unit and checked it out. My advice would be to take someone with you who could measure the square footage of the apartment (preferably an architect or an expert in construction or an architectural professional) because it is often not listed in the registry itself.  You should also check if additions to the property were made as well. If all these conditions are met, then it is safe to consider finalizing the sales contract. Purchase and sale costs include a fee for contract verification, an intermediary commission, which usually amounts to 2% of the agreed price, bank commissions, taxes, which the amount would depend on whether the apartment has been sold before, when a tax is paid in the amount of 2.5% of the appraised value or if the apartment you’re buying is directly from an investor, in which case the tax is paid in the amount of 10% of the price of the apartment.

The contract is usually drawn up by the real estate agency.  Check the contract with your lawyer before signing. This would be the case when everything checks out with the documentation and the apartment itself, but what do you do if you are interested in purchasing an apartment that is under construction or an apartment that is not registered? In my next article, we will consider those circumstances.