The practice established in real estate transactions, considering the usually high price, is that the parties enter into a preliminary contract which stipulates the conditions for the future performance of the formalities related to the deal at the notary’s office.
The legal framework of the preliminary contract is stated under Art. 19 of the OCA and Art. 362 to 364 of the Civil Procedure Code (CPC). The preliminary contract for purchase and sale of real estate must be executed in writing. The purpose of the preliminary contract is to prepare the execution of the final contract. It must include all material terms and conditions of the final contract, i.e. the clauses that strictly individualize the transferable property, the price, the parties, the deadlines for the conclusion of the final contract in the form of a title deed and other important conditions. Usually, the parties agree that part of the sale price will be paid upon signing the preliminary contract, usually amounting to 10% of the sale price. The preliminary contract ensures the rights of each party thereunder, since according to Art. 19, para. 3 of the COA - each party under the preliminary contract is entitled to file a claim to declare the contract final, provided that it has fulfilled its obligations under the preliminary contract. In this case, the final contract is considered concluded as from the enactment of the judgment. The court at the location of the property will have jurisdiction. In general, the real estate agencies offer to their customers standard preliminary contracts. Taking into consideration the importance of the preliminary contract, it is advisable to have it drawn up or at least checked by your lawyer experienced in real estate deals. It is recommended that the lawyer be present when signing the contract. This will greatly reduce the risks of entering into an unfavourable contract.