Safe Deal: How to Verify an Apartment in Serbia and Not Lose Money

The Guarantor of the Deal: Why the Notary (Javni beležnik) is Fully Responsible

In Serbia, a notary is not just a formal witness but a key figure ensuring the legality of a real estate transaction. Since 2014, all purchase and sale agreements must be certified by a notary. The notary bears full legal and financial responsibility for the 'cleanness' of the documents they verify.

Before certifying an agreement, the notary is obliged to request a fresh extract from the cadastre, check for the absence of encumbrances, tax and utility debts, and also verify the legal capacity of all parties. In case of an error on their part that leads to financial loss for the buyer, the notary is required to compensate for the damages from their professional insurance. This creates a powerful first barrier against fraudsters.

• Verification of the seller's title documents.
• Requesting up-to-date information from the state register (cadastre).
• Checking for the presence of encumbrances, mortgages, and legal disputes.
• Verifying the identity and legal capacity of the parties.
• Explaining the legal consequences of the transaction to the parties.

eKatastar: How to Read the Main Property Document

The Republic Geodetic Authority (Republički geodetski zavod) maintains the electronic property cadastre (eKatastar), which is the primary source of information about any property. Serbia operates on the principle of publicity and trust in the register: it is presumed that the data entered into the cadastre is accurate and complete. Access to basic data is open online to everyone.

The key document is the extract from the cadastre, or "List nepokretnosti". It consists of several parts, but for the buyer, three sections are most important. Understanding these sections is fundamental to verifying the legal 'cleanness' of the apartment.

New Construction Risks: Buying 'u izgradnji' and Verifying the Developer

Buying an apartment in a building under construction ('stan u izgradnji') can be profitable but carries increased risks. The main danger is the project not being completed or having problems with commissioning. Therefore, verifying the developer and their permits is of paramount importance.

First and foremost, it is necessary to check if the developer has the main document — a valid building permit (Građevinska dozvola). It is important to ensure that it was issued for the specific property with the parameters (number of floors, area) being offered to you. Fraudsters often show a permit for one project while building another.

The issue of financing is no less important. Find out if the project has bank financing. The presence of a major bank as a partner is a good sign, indicating that the project has been vetted and has a financial cushion. If the developer is building solely on the money of early buyers, the risk of construction halting due to a lack of funds increases significantly.

• Possession of a valid Građevinska dozvola.
• Rights to the land plot (ownership or long-term lease).
• Presence of project financing from a bank.
• The company's reputation and history of completed projects.

Resale Market Risks: Hidden Heirs and Lifetime Tenancy Rights

The secondary real estate market in Serbia has its own less obvious, but no less serious, risks. One common problem is unresolved inheritance issues. After the owner's death, their heirs may not immediately claim their rights, and the seller might not be the sole claimant to the apartment. The appearance of a 'hidden' heir after the transaction can lead to it being contested in court.

Another Serbian peculiarity is the right of lifetime residency or use (Plodouživanje). It can be established in favor of a third party (often an elderly relative) and is retained even after a change of ownership. You might buy an apartment but be unable to evict the person who holds this right. This encumbrance must be registered in the cadastre, but sometimes it is 'forgotten' to be mentioned.

A special category consists of apartments privatized in the 90s through the so-called 'buy-out' process ('Otkup'). Often, the documents for such properties were prepared with errors, which can create difficulties today when re-registering rights. A thorough legal examination of such an apartment's history is mandatory.

Protection Tools: Lawyer, Insurance, and Escrow Accounts

Although the notary is a guarantor of legality, their functions are limited to verifying the current state of documents. They will not delve into the property's history or analyze risks associated with the developer. For comprehensive protection of the buyer's interests, it is necessary to hire an independent lawyer specializing in real estate.

A lawyer will conduct a thorough legal examination (due diligence), study the history of ownership transfers, check the developer's permits, and draft a preliminary agreement that maximally protects your interests. Their task is to identify potential problems before you put any money down.

Case Studies: Real Stories of Problematic Deals and How They Were Avoided

Theory is important, but real examples best illustrate the risks. One story involves the purchase of an apartment in Belgrade. The seller provided a clean extract from the cadastre. However, the buyer's lawyer insisted on checking the archives and discovered that a few years prior, a right of lifetime residency (Plodouživanje) had been registered and then removed in favor of the seller's elderly mother. Further investigation revealed that the woman was still alive and had not consented to the removal of the encumbrance. The deal was canceled, saving the buyer from acquiring an apartment with a 'tenant'.

Another case occurred in the new construction market. A developer was offering apartments at an attractive price, showing a building permit. Upon verification initiated by a lawyer, it turned out that the permit was for the reconstruction of a three-story building, while the developer was selling apartments in a six-story building he was constructing without authorization. Buyers who invested without checking risked losing both their money and their apartments, as the illegal structure was subject to demolition.

• Don't just trust a fresh extract from the cadastre; the property's history is crucial.
• Always verify that the permits match the actual construction.
• Hiring an independent lawyer is not an expense, but an investment in your security.