Public notaries (javni beležnici) have been active in Serbia for already a month. This brings, inter alia, a number of novelties in real estate transactions.
Agreements on disposal of rights over immovable property, including mortgage agreements and unilateral mortgage statements, have to be concluded in the form of a notarial deed (javnobeležnički zapis). A failure to conclude the agreement/statement in the said form makes the transaction null and void. When drafting a notarial deed, the notary will check the content of the agreement. In case some notaries take a pro-active approach and start intervening in the negotiated content of the agreement, this will inevitably cause problems in practice, especially in the execution of complex arrangements between legal entities.
Notarial deed represents enforcement title (on the basis of which one may directly initiate enforcement proceedings), provided it contains an explicit statement of the debtor that direct enforcement may be initiated on the basis of the deed once the obligation becomes due and payable.
The parties may conclude in the form of notarial minutes (javnobeležnički zapisnik) an agreement whereby the debtor recognises the existence of a monetary claim and establishes a mortgage on its immovable (or pledge on its movables) as security for such claim. The notarial minutes have the force of a court settlement, i.e. a court decision, and represent the basis for registration of the mortgage (or pledge) as security for the existing claim referred to in the document. Mortgage registered on the basis of a court settlement concluded in the form of notarial minutes is subject to judicial enforcement.
Pursuant the Transfer of Immovable Property Act, agreement on transfer of immovable property has to be prepared by the notary public licensed for the territory where the relevant immovable is located. No public notaries have yet been appointed for certain territories. In those territories, all notarial documents shall be in the interim prepared by local court. It may be expected that this transitory solution will create a bottle neck in legal transactions with immovables, due to organizational and logistic difficulties immanent to Serbian judiciary.
Given that the Transfer of Immovable Property Act does not apply to encumbrances on immovable property, notarial deed containing mortgage agreement or unilateral mortgage statement may be prepared by any notary in Serbia, regardless of the property location.
The new regulations also bring about increase in the cost of transactions with immovable property. Notary's fee for preparation of notarial deed depends on the value of the transaction. The fee for preparation of unilateral mortgage statement is 60% lower than the fee for preparation of mortgage agreement. The cap on the fee for notarial deed is set at approx.. EUR 5,000. For the sake of comparison, prior to the introduction of notaries, the maximum fee for judicial authentication of parties’ signatures on transactional documents dealing with immovable was approx. EUR 400.