Unfortunately, in Croatian practice various “templates” of preliminary contracts are used, which later often lead careless buyers into serious problems.
That is why below I present a list of 10 questions you must ask yourself when entering into a preliminary contract in Croatia (for buying or selling real estate).
If you are not sure of the answers, ask the seller.
Or your attorney.
IMPORTANT NOTE: all texts published on lucija.legal – although written by an attorney with many years of experience – are written in clear, plain, and conversational language. Legal terminology has been deliberately omitted to make the content easier to understand, and certain legal concepts are described in a highly simplified manner, while preserving their meaning. All texts and examples are provided for educational and public information purposes only. No text contains individualized or specific legal advice. For the resolution of particular legal issues, consulting your attorney is expressly recommended.
1. Is the person with whom you are concluding the preliminary contract in Croatia registered as the owner in the land registry?
Be cautious if it is not.
It is not the same whether the “selling company” is stated in the preliminary contract, while the land register shows the company’s director or a completely different person as the owner.
A preliminary real estate sale contract should be entered into with the person (the seller) who is registered as the owner in the land registry.
2. Are there any co-owners of the property or spouses who would also need to sign the preliminary contract in Croatia?
If the seller owns only 1/2 of the apartment being sold, the preliminary contract must also be signed by the person who owns the other half.
It is not sufficient for only one co-owner to sign.
Also, conduct thorough due diligence to determine whether there are any “hidden” or “unregistered” owners.
For example, disputes often arise in practice because the apartment constitutes marital property, and the wife is not registered as a co-owner. When the husband then sells the “entire” apartment, she initiates legal proceedings to prove that half of the property belongs to her.
Be careful in advance.
3. Are there any active encumbrances, notes, pre-registrations, burdens, or other entries on the property in the land registry?
Make sure to thoroughly check whether the land registry status is “clean”.
It should be “clean” both at the moment you sign the preliminary contract in Croatia for the sale of the property – and at the moment you sign the contract of sale.
To check the status – it’s best to consult a professional (a lawyer). They will know how to recognise and investigate the matter in depth. Because there are pitfalls.
4. Is the preliminary contract of sale of the property being concluded in written form and notarised?
For a contract of sale of real estate to be valid, it must be in written form and signed by the seller with a notarised signature (notarial certification).
Therefore, for the preliminary contract in Croatia to also be valid, it must be in written form and signed by the seller with a notarised signature.
This follows from the legal provision which states:
“The rules on the form of the main contract also apply to the preliminary contract if the prescribed form is a requirement for the validity of the contract.“
5. Does the preliminary contract contain an accurate description of the real estate?
If the property is completed, the preliminary contract must contain a precise description of the property.
There is a specific method for properly describing a property — so check with a professional whether it has been described correctly.
This is not unimportant.
If you’re not careful, you may later run into problems because the land registry court may refuse to register such a preliminary contract in Croatia or the main contract.
On the other hand, if the property is under construction, the preliminary contract should contain as much information as possible so that the property can be identified later.
For example, if it is an apartment under construction, the preliminary contract should contain information about: the property on which the building is being constructed, the building permit, the name of the developer, the project, the surface area and the position of the apartment according to the project, etc.
About the risks of buying an apartment under construction, I have already written here.
6. Does the preliminary contract include a fixed or determinable purchase price?
Besides accurately stating the details of the contracting parties and the property being purchased, the preliminary contract in Croatia must also include a fixed or determinable purchase price in order to be valid.
The preliminary contract does not need to specify the methods and deadlines for paying that price (these will be defined later in the main contract).
However, it is not a bad idea if they are included, so you know what the expectations are.
You don’t want unpleasant surprises.
7. Is there a set deadline for concluding the main contract?
This is a very important element of preliminary contracts — and a frequent source of later disputes, disagreements, and problems.
Namely, the main purpose of a concluded preliminary contract in Croatia is not the fulfilment of the obligation itself (the purchase and sale of real estate).
The main purpose of the preliminary contract is only the conclusion of the main contract of sale.
This means that the preliminary contract must state within what time period the main contract will be concluded.
And once the main contract is concluded — the purpose of the preliminary contract is fulfilled.
Problems often arise when the parties do not agree on the timeframe in which the main contract is expected to be signed.
This is especially common in construction projects, when everyone is waiting for the occupancy permit, the issuance and timing of which are uncertain.
Nevertheless, despite all that, you should always include some sort of clearly defined time limit in the preliminary contract (e.g. “within six months from the signing of the preliminary contract”, “no later than 1 June 2027”, or similar).
It is easy for the parties later (if there is willingness) to extend that deadline.
But it is very difficult, if no deadline was set in the preliminary contract, to later explain in court “what the expectations were” or what you “implied” as a “reasonable deadline”.
8. Is a deposit (“kapara”) agreed upon, and if so, what is the amount?
Clauses about down payments are common in preliminary contracts in Croatia.
However — you need to be careful.
It is not the same which term you use. In other words, whether you agree on a “kapara” (deposit/earnest money), a “kapara as a cancellation fee”, an “advance payment”, a “deposit” in the strict sense, a “prepayment”, or something else.
Even if these terms seem similar to you, each of them carries its own legal “weight” and rules defined by law.
It is also important how much money is being requested from you.
I have already written here about situations in which you should be particularly cautious when giving a deposit.
9. Does the preliminary contract include “exit” clauses?
Does the preliminary contract in Croatia include situations in which you may withdraw/cancel the preliminary contract — while still getting your deposit back?
Pay special attention to this.
You do not want to end up in a situation where, for example, you do not have an access road you reasonably expected, yet the other party forces you to conclude the main contract.
Meaning: if you refuse to sign — you lose the money you paid as “kapara” or “prepayment”.
If you do sign — you still have no access road.
The advice is to consult a professional specifically for defining these “exit options”, even if you do not want to do so for other aspects.
If the seller has given you their template of the preliminary contract, try negotiating the inclusion of clauses that will protect you — any serious person who does not intend to deceive you will understand your need to secure yourself as much as possible.
10. How does the seller react and conduct themselves regarding the conclusion of the preliminary contract in Croatia?
Although this part is not related to law, the seller’s behaviour regarding the preliminary contract — is a very indicative factor of the person’s seriousness and intentions.
If they approach the signing of the preliminary contract in Croatia carefully, with understanding for your concerns and your need to protect yourself, and if they do not react defensively to the suggestion that you involve your lawyer, etc. — it is likely that the later purchase process will also run smoothly.
If, on the other hand, they delay your attempts to conclude the preliminary contract, stall, or treat any amendments as “unnecessary hassle” — keep your eyes and ears open and be very cautious going forward.
It is not uncommon for investors/sellers who are careless or evasive at this stage to also be insincere and/or unreliable later, which can lead to problems down the line.
And believe me — you do not want problems when buying real estate.
It’s not a small investment.
P.S. If you are a foreigner looking for comprehensive support with real estate and business matters in Croatia, you can find more information about collaboration opportunities here.
