By Vangjel Dhimo on February 25th, 2023
Buying Specific Types of Property
In the previous chapter, we discussed how to negotiate with property owners in Saranda and the mindset you need to have. Now that we’ve shaken hands and agreed on the terms, what’s next? Of course, it’s time for the paperwork!
This part is often perceived as the most difficult. It’s where questions arise, agreements can break or solidify, and all the tension comes to the surface. For foreigners like you, uncertainties are natural because you might not be familiar with the rules, secrets, and legal implications in Albania.
You might think about hiring a lawyer, which adds to the complexity. You essentially know only what you’ve read on the internet and what your agent has told you. But remember, this book is here to take you steps further, uncovering everything and making you a real expert.
The paperwork phase can indeed be daunting. It’s where all the legal details need to be meticulously handled, ensuring that both parties adhere to the agreed terms. Misunderstandings can easily occur if you’re not familiar with local regulations and legal jargon. This is why it’s crucial to have a clear understanding of the process, to prevent any potential issues from arising.
Once the negotiations are done, the next steps involve a series of important actions. You’ll need to prepare and review various documents, such as the preliminary contract, the purchase agreement, and possibly other legal documents required by Albanian law. This phase is critical because it’s where you ensure that all the terms negotiated are accurately reflected in the contract, protecting your interests and investment.
You might be thinking about the complexities involved, like ensuring the property’s legal status, verifying ownership, and understanding your rights and obligations as a buyer. These are valid concerns, but with the right guidance, you can navigate through them smoothly.
In this section we’ll break down each step of the paperwork process, explain the different types of contracts you’ll encounter, and provide tips on how to protect yourself at all costs. From understanding the preliminary contract to finalizing the purchase agreement, we will cover it all.
TYPES OF PROPERTIES IN SARANDA AND CONTRACTS
Understanding the type of property is crucial because the types of contracts differ depending on the property. But don’t worry, it’s not as complicated as it sounds. Let’s go over what kind of contract you need for each type of property.
Ready-to-Move-In Property
For a ready property that already has a certificate of ownership, you simply need a purchase and sales contract. This contract is straightforward and formalizes the transfer of ownership from the seller to the buyer.
Property Under Construction
For properties under construction, you will need an undertaking contract. This contract is essential for ordering the apartment and ensuring that all terms regarding the completion and delivery of the property are clearly outlined and agreed upon.
Land and Hotels
For purchasing land or a hotel, the process is similar to buying a ready property with a certificate of ownership. You will use a purchase and sales contract. This contract ensures that the ownership of the land or hotel is legally transferred to you.
As you can see, the types of contracts are not as complicated as they might seem. Each contract serves a specific purpose to ensure a smooth and legally sound transaction. What About Taxes?
You might be wondering about the taxes involved in buying property. The good news is that there are no taxes when purchasing property in Albania, regardless of the type of property.
We’ll cover everything one by one in the following sections, breaking down the process and explaining each step in detail. Let’s go!
Sale and purchase contracts
Before diving into the specifics, it’s essential to understand how the buying process works in Albania. When purchasing a property that is ready to move in and has a certificate of ownership, the transaction is completed at a public notary’s office with the assistance of a public translator.
Here’s how the process unfolds:
- Transfer of Funds: Let’s assume the agreed price for the property in Saranda is 100,000 euros. You start by transferring this amount to the notary’s account.
- Application for Registration: The notary then initiates the application process at the registration office to transfer the property ownership to your name.
- Issuance of New Certificate: Once the new certificate of ownership is issued in your name, the notary completes the process.
- Payment to the Seller: After the property in Saranda is officially registered under your name, the notary transfers the payment to the seller.
This straightforward and secure process ensures that all transactions are transparent and legally binding. There’s no need for complications, making it easy and safe for both buyers and sellers.
The contract deconstructed:
Parties Involved: The agreement will clearly state the names and personal details of the buyer and the seller.
Property Description: A detailed description of the property in Saranda being sold, including its location, size, and any unique features.
Purchase Price: The agreed-upon price for the property in Saranda, along with the payment terms and schedule.
Deposit: Information about any deposit required, including the amount and conditions for its return or forfeiture.
Conditions of Sale: Specific conditions that must be met for the sale to proceed. This could include financing conditions, inspection results, and any repairs or improvements to be made by the seller before the sale.
Completion Date: The agreed date by which the transaction must be completed and ownership transferred.In Albania, the deadline for completing property purchase contracts is typically one month. This means you must transfer the agreed amount within this period. If you fail to do so, penalties come into play. For every day of delay beyond the deadline, you’ll be required to pay additional fees. It’s crucial to adhere to this timeframe to avoid these extra costs and ensure a smooth transaction process.
Transfer of Ownership: Details on how and when the ownership of the property in Saranda will be officially transferred to the buyer.
Warranties and Representations: Statements made by the seller regarding the condition of the property and any legal issues affecting it. This might include assurances that the property is free from liens and encumbrances.
Notary and Registration: Information about the role of the public notary and the registration process, including the issuance of the new certificate of ownership in the buyer’s name.
Dispute Resolution: Provisions for resolving any disputes that might arise during the transaction process, often including a clause specifying the jurisdiction under which any legal disputes will be resolved.
Signatures: The agreement will end with the signatures of both the buyer and the seller, as well as witnesses, if required.
Undertaking Contracts ( Buying under construction )
The undertaking contract in Albania has unique aspects compared to a standard purchase agreement. This contract typically involves a structured payment schedule through installments. For example, you might pay 50% at the time of signing, 25% after seven months, another 20% after another seven months, and the final 5% is deposited in the notary’s account to apply for the certificate of ownership. According to Albanian law, this certificate is issued 4-6 months after the building is completed.
Payment Structure
The installment plan ensures that payments are spread out over time, making it easier for buyers to manage their finances. The final payment is strategically held by the notary to ensure the completion of all legal formalities and to guarantee the transfer of ownership once the building is officially recognized as complete.
Deliverables
The undertaking contract also details the deliverables of the building. Construction companies typically specify various aspects of the apartment’s finish. For example, they might commit to delivering apartments with:
- Interior Doors: Quality doors installed within the apartments.
- Bathroom Fixtures: Basic fixtures such as sinks, toilets, and showers.
- Flooring: Standard tiles or marble flooring, depending on the specifications.
- Facade: A finished facade that meets the agreed-upon standards.
- Walls: Double brick exterior walls with insulating materials to ensure energy efficiency.
- Bathrooms: Properly insulated bathrooms to prevent moisture issues.
- Staircases: Stairs complete with railings and marble finishes.
- Water Supply: Fully functional water supply systems installed.
Rights and Obligations
The contract also outlines the rights and obligations of both the buyer and the seller. This includes:
- Penalties for Non-Compliance: Clearly defined penalties if either party fails to meet their contractual obligations.
- Transfer of Ownership: Detailed steps on how ownership will be transferred once all conditions are met.
- Building Insurance: According to Albanian law, the building must be insured for 10 years, protecting the buyer against structural defects and other issues.
Importance of Clarity
This comprehensive approach ensures that all parties are clear on what to expect and are protected throughout the construction and handover process. By detailing every aspect of the building’s completion and the financial commitments involved, the undertaking contract provides a solid framework for both buyers and seller.
Buying Property in Saranda Without Being Present
Buying property online in Saranda is definitely a rarer and more challenging decision because it requires extra caution and thorough due diligence. However, when you have a trusted agent, the process becomes much simpler. Many people highly value their time and sometimes don’t want to miss out on opportunities that come only once, even if they can’t be physically present.
The Process Simplified
Despite the challenges, buying property online is easier than it looks. The contracts are essentially the same as those used for in-person transactions, with one key difference: who signs the contract.
Signing the Contract
In many countries, electronic signatures are commonly used for such transactions. However, in Albania, this option isn’t available yet due to a lack of agreements with European countries. But don’t worry, there’s a straightforward alternative: using a power of attorney.
Using a Power of Attorney
To facilitate the process, you will need to send a power of attorney with an apostille to your agent, granting them the authority to represent you in buying or selling property. Here’s how it works:
- Consult with Notaries: The Albanian notary will guide you on the exact wording needed for the power of attorney. This document will grant authority to your agent or a trusted friend.
- Details Included: The power of attorney must include specific details such as the agent’s personal ID, the right to perform actions specifically for a sales contract, the property number, cadastral zone, total area, and the representation to act as the owner (which is you).
- Execution: Once the power of attorney is prepared and apostilled, your agent can legally sign the necessary documents on your behalf and complete the transaction.
This process is a practical solution for those who cannot be physically present but do not want to miss out on prime real estate opportunities. By granting power of attorney to a trusted agent, you can ensure that the transaction proceeds smoothly and securely.
QUESTIONS AND ANSWERS
WHAT IS THE NEXT STEP AFTER I BUY A PROPERTY?
The buyer receives instant ownership and complete responsibility for the property after signing the title deed at the notary’s office. After everything is done, our company will look after registering your property in the registration office and this is done within 15 days.
DO I HAVE TO PAY ANY TAXES?
Albania is a very tax-friendly country and this is one of the reasons many foreigners love what the country has to offer but also the legal straightforward system they have. When you buy a property you only have to pay the notary’s costs and the contract’s translator costs which usually depend on the value of the property. The notary’s costs are calculated with a specific formula which translates to 0.3% of the property’s value. That’s all you have to pay when buying a property.
