Everything You Need to Know Before Signing a Real Estate Sale and Purchase Agreement

Buying or selling real estate is one of the most significant financial transactions in a person’s life. At the heart of this process lies the Real Estate Sale and Purchase Agreement — a legal document that defines the rights and obligations of both parties and represents the basis for transferring ownership. Given the complexity of the procedure and the serious legal implications, it is essential to understand all aspects of this agreement. Below, we will guide you through the entire process — from the preparatory steps to the final registration — relying exclusively on the applicable legal framework of the Republic of North Macedonia.

1. What is a Real Estate Sale and Purchase Agreement?

A Real Estate Sale and Purchase Agreement is a legal act by which the seller undertakes to deliver the subject of sale (the property) to the buyer so that the buyer acquires ownership, while the buyer undertakes to pay the agreed purchase price.

This agreement is the foundation on which the entire ownership transfer process is built, and it must be drafted with careful attention to detail.

2. Mandatory Form of the Agreement

Unlike many other contracts, the law prescribes a strict form for agreements used to transfer real estate.

• Written Form: The agreement must be concluded in writing. An oral agreement for the sale of real estate produces no legal effect.

  
  

• Notarial Certification (Solemnization): The signatures of the parties must be certified by a notary. Private documents that serve as a legal basis for acquiring, transferring, or limiting rights to real estate must be confirmed (solemnized) by a notary. Through the solemnization, the notary verifies that the document complies with the law and that the will of the parties is clearly and unequivocally expressed.

• Participation of a Lawyer: If the value of the legal transaction exceeds EUR 10,000 in MKD equivalent, the private document (the agreement) must be drafted by a lawyer and must contain the lawyer’s seal and signature.

3. Key Steps Before Signing the Agreement

Before signing, it is necessary to conduct thorough checks regarding the legal status of the real estate.

• Verification with the Agency for Real Estate Cadastre: The most important document is the property sheet (имотен лист). It is a public document that proves the registered right of ownership and other real rights on the property. From the property sheet, you can see:

  • Who is registered as the owner

  • Accurate data about the property (cadastral parcel, building, area)

  • Whether there are encumbrances such as mortgages, servitudes, or other annotations

  The data in the cadastre is considered correct, and a diligent person who relied on the registered data does not bear adverse consequences.
  

4. Essential Elements of the Agreement

For the agreement to be valid, it must contain the following essential elements:

1. Parties: Clear identification of the seller and buyer (full name, ID number, address; for legal entities — company name, registered seat, company ID). The notary must verify their identity using a valid ID/passport or corporate registry extract.

2. Subject of the Agreement: A precise description of the property being sold, including all cadastral data taken from the property sheet.

3. Price: A clearly defined purchase price. If the price is not determined or determinable, the agreement has no legal effect.

4. Statement for Transfer of Ownership (Clausula Intabulandi): An explicit and unconditional statement by the seller allowing the ownership to be transferred to the buyer and registered in the public records.

   
   

5. Notarial Procedure

The role of the notary is crucial for the legal security of the transaction. During the solemnization, the notary must:

• Verify the identity, capacity, and authorization of the participants

• Explain the purpose and legal consequences of the agreement

• Confirm the parties’ genuine and serious intent

• Solemnize the document, making it a public document

  
  

The notarial deed may also have the force of an enforceable title if it contains a statement by the debtor (buyer) allowing enforcement for payment of the price.

6. Tax Obligations – Real Estate Transfer Tax

After the agreement is concluded, a tax obligation arises for paying real estate transfer tax.

• Tax payer: As a rule, the seller is the taxpayer. However, the agreement may stipulate that the buyer pays the tax.

• Tax Base: The market value of the real estate at the moment the tax liability arises.

• Tax Rates: Rates are proportional, ranging from 2% to 4%, and are determined by the municipal council where the property is located.

• Special Notarial Procedure: The law provides a fast-track procedure handled through the notary. It includes an appraisal report from a certified appraiser, submission of an advance tax return and the notary placing a clause on the agreement confirming that the advance tax has been paid

  
  

Important: Without proof of tax payment, the ownership transfer cannot be registered in the cadastre.

7. Acquisition of Ownership – Registration in the Cadastre

This is the final and most important step through which the buyer formally becomes the owner.

• Moment of Acquisition: Ownership of real estate based on a legal transaction is acquired only upon registration in the real estate cadastre. Signing the agreement and paying the price alone does not make the buyer the owner.

• Registration Procedure: The notary must electronically submit the solemnized agreement, the registration application, and proof of paid administrative fee to the Agency for Real Estate Cadastre.

• The Agency reviews the submitted documentation and records the change of ownership in the property sheet.

8. Special Situations and Rights

Right of First Refusal:

If the property is co-owned, the co-owner intending to sell must first offer their share to the other co-owners under the same conditions. Failure to respect this right may lead to annulment of the sale.

Liability for Defects:

The seller is liable for material defects (e.g., dampness, structural issues) that existed at the moment the risk passed to the buyer, as well as for legal defects (e.g., third-party rights limiting the buyer’s ownership).

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CONCLUSION

A real estate sale and purchase agreement is a complex legal instrument requiring strict adherence to legal procedures. The key steps for a successful and legally secure transaction include:

• Thorough verification of the property’s legal status

• Engaging a lawyer, especially for high-value transactions

• Mandatory written form and notarization

• Timely fulfilment of tax obligations

• Registration of ownership in the Cadastre — the only way to legally acquire ownership

  
  

Following these steps and consulting qualified legal professionals (lawyer and notary) is the best protection against potential risks and a guarantee of security for your investment.

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Note: This text has been prepared solely for informational purposes and cannot be considered legal advice or guidance for specific actions. Legal matters are complex, and each case has its own unique circumstances that must be assessed individually. For this reason, it is recommended to consult a qualified attorney who can provide tailored legal solutions to your specific situation.