Montenegro - The Buying Process



UK and Irish citizens can buy property in Montenegro as their country has a reciprocal agreement with Montenegro.

The process of purchasing property in Montenegro is relatively straightforward. The most important thing is to ensure that you have Clean Title. Once this has been established, ownership is guaranteed and the property can be purchased 100% freehold.

Once you have found the right property, you should, if necessary, seek professional advice in respect of any works that need to be carried out on the property and the likely costs.

Next, you should instruct a reputable Lawyer who will translate the Sale Contract including the terms and condition of sale. Your lawyer will check the seller's ownership documentation to ensure that all is in order and that there will be no hindrances on the sale.

You are then required to put down a down 10% deposit so that the preliminary contract can be signed by both purchaser and seller. The contract is witnessed by a court judge at the local court.

It should be noted that once the deposit has been paid, if the purchaser (for whatever reason) decides not to proceed with the purchase or not to pay the balance of 90%, then the purchaser will have to forgo the whole deposit. The deposit paid is non refundable and becomes the property of the seller.

If the seller decides to withdraw from the transaction, then he is legally bound to pay back to the prospective purchaser twice the amount of the initial 10% deposit. This helps avoid gazumping.

In order to attain confirmation of ownership, there are 2 conditions that must be fulfilled:

1) Justus Titulus - legal entitlement to the property
2) Modus Aquirendi - the registration of the property with the Land Property Registry.

Once the balance of 90% has been paid and contracts have been signed and attested, the change of ownership is registered in the local court.

Upon completion, the local Inland Revenue Office will determine the value of the property and a compulsory Purchase Tax of 2% will have to be paid. The contract is then stamped and submitted to the local Area Property Registry for the new purchaser to be registered as the new owner.

Your lawyer would have of course ensured that all utility bills, outstanding debts have been paid right up until the date of completion otherwise the purchaser will become liable. Once all the relevant purchase documentation has been acquired, arrangements should be made so that the utilities can be transferred into your name.

Legal costs are approximately 700-1000 Euros for properties under 100,000 Euros, however, for properties over 100,000 you should budget paying 1% or so.

Ideally, you should open a local bank account which is a straightforward procedure providing you have your passport. Your purchase monies should be in place into the account well in advance of the transaction to ensure that everything runs smoothly.

If you cannot stay in Montenegro to oversee the purchase, you can give your Lawyer "Power of Attorney" so that he can act on your behalf in respect of the purchase.