Slovakia: property transfer agreements

From 1 September 2009, property transfers may be authorised by an insured attorney without requiring further authorisation from the Cadastral Authority.

This is a new initiative from the Ministry of Justice to make the property transfer system safer, simpler and quicker. It replaces the previous risky and often abused system under which agreements worth millions could be drafted by uninsured persons without any liability whatsoever.

Under the new system, the attorney drafts the property transfer agreement and the competent Cadastral Authority only has to look at whether it complies with the cadastral documents; for instance, whether the property actually exists or whether there is a note restricting registration.

It does not matter which party’s attorney is used to authorise the property transfer agreement. Authorisation is effected by means of a special form of authorisation clause (for which the legislation provides a template) in which the attorney:

• evaluates whether or not the agreement complies with the law, circumvents the law or is contrary to good manners
• verifies the identity of the parties to the agreement
• evaluates whether or not any damage may result from execution of the agreement

If the attorney does not personally know the parties to the agreement, they must identify themselves with identity cards or prove their identity by two witnesses. If the attorney is still not certain of their identity, he may ask them to provide further documentary evidence of their identity or apply to the municipality for a statement.

If the attorney wrongly verifies a party’s identity, he will be liable (and cannot get a waiver) for any resulting damage unless he can show the person suffering the damage knew of the false identity.

Where payment of some sort is made for the property transfer, the attorney is obliged to:

• advise the parties of the purchase price payment terms and include a statement from the parties that they have been informed of the payment terms
• the amount of his insurance cover and the name of the insurance company providing the cover

To enable ‘single-point’ transfers, any party to the agreement may ask the attorney to file an application with the relevant Cadastral Authority. Once authorised in writing, the attorney must prepare the application and deliver it with the relevant deeds to the Cadastral Authority. This may be done for any type of filing.

Law: Act No. 586/2003 Coll. on advocacy, as amended