Conclusion of a Real Estate Sale and Purchase Agreement – Essential Elements, Obligations of the Parties, and Legal Risks

By Josip Perkušić, Attorney at Law, Zagreb

Under a real estate sale and purchase agreement, the seller undertakes to transfer ownership and possession of the property to the buyer, while the buyer undertakes to pay the agreed purchase price and to take possession of the property. This is the principal, consensual agreement, the legal nature of which derives from the general provisions of the Croatian Obligations Act (Zakon o obveznim odnosima), whereas the acquisition of ownership of real estate is effected through registration in the land register in accordance with the Ownership and Other Real Rights Act (Zakon o vlasništvu i drugim stvarnim pravima). In real estate transactions, the principal sale and purchase agreement represents the final and most important phase of the transaction, in which the rights and obligations of the contracting parties are conclusively determined, following on from the previously concluded preliminary agreement and the deposit already paid.

1. Parties and Subject Matter of the Agreement

The agreement must contain full identification of the contracting parties (full name, personal identification number [OIB], domicile) and a precise description of the property in accordance with the land register data – the cadastral parcel number, the land register body, the cadastral municipality, the surface area, and, in the case of properties held under condominium ownership, the designation of the specific unit (the co-ownership share linked to a particular apartment, storage unit, and the like). The seller declares and warrants that it is the exclusive owner of the property, that no judicial or administrative proceedings are pending in respect of it, and that no rights of third parties exist that exclude, diminish, or restrict the buyer’s ownership right.

2. Purchase Price and Method of Payment

The purchase price is generally set as a fixed, unchangeable amount, with an indication of any deposit already paid under a previously concluded preliminary agreement, which is credited against the total price. Where the transaction is financed through a mortgage loan obtained by the buyer, the agreement should precisely set out the timing and sequence of payments – part of the funds being directed directly to the creditor in order to discharge the existing mortgage encumbering the property, with the remaining balance paid to the seller into the designated account. The full purchase price is usually paid before the issuance of the tabular declaration and the transfer of possession of the property to the buyer.

3. Tabular Declaration (clausula intabulandi)

The tabular declaration is a unilateral, notarized declaration by the seller permitting the buyer, without any further consent or approval, to seek and obtain registration of ownership of the property in its favor, with the simultaneous deletion of the seller’s ownership entry. Its issuance is generally made conditional upon full payment of the purchase price and a determination that the seller has no further claims against the buyer on that account.

4. Land Register Status and Encumbrances

Prior to signing the agreement, the buyer is obliged to inspect the original land register extract and to become familiar with the registered status of the property. If the property is encumbered by an existing mortgage, most commonly on account of a mortgage loan previously taken out by the seller, the agreement must contain the seller’s obligation to take, immediately upon receipt of the funds, all steps necessary to have that encumbrance deleted, with a specific deadline set for completing the deletion in the land register. The seller further warrants that the property does not constitute marital or non-marital acquired property that could be subject to claims by third parties.

5. Transfer of Possession and Costs

The moment of transfer of possession is customarily linked to the date on which the full purchase price is paid, and the contracting parties draw up a handover record establishing the condition of the property, an inventory of items remaining in it, and the status of settled utility costs. The agreement also determines which party bears the costs of concluding the agreement, the costs of notarization of signatures, and the real estate transfer tax, which in practice is most commonly the buyer’s obligation.

6. Dispute Resolution and Entry into Force

The agreement should contain a provision on the governing law and the court having jurisdiction in the event of a dispute that cannot be resolved amicably, as well as a clear determination of the moment of entry into force, which in practice is linked to the signing and notarization of the signatures of all contracting parties before a notary public.

7. Key Legal Risks

(1) Before concluding the agreement, it is necessary to thoroughly verify the land register status of the property in question.

(2) The real estate sale and purchase agreement is a highly formal legal transaction, so certain errors in drafting the agreement or the tabular declaration/instrument may render it impossible to complete the transaction, that is, to transfer ownership in the land register.

(3) In practice, the seller is required to obtain a declaration from his or her spouse, if married, consenting to the sale, or, alternatively, to declare before a notary public that he or she is not married, that is, that the property in question does not constitute marital acquired property.

(4) It is necessary to precisely determine the moment at which the tabular declaration is issued, with whom it is deposited, and when it is handed over to the buyer.

(5) For the agreement to enter into force, it must be signed by all contracting parties and their signatures notarized before a notary public.

Conclusion

The real estate sale and purchase agreement represents the legal instrument through which the transaction initiated by the preliminary agreement and the deposit is finally realized, entailing the assumption of clearly defined rights and obligations by the contracting parties. Its legal effectiveness depends on the precision of the provisions concerning the subject matter, the price, the tabular declaration, the land register status, and the transfer of possession. The drafting of this agreement should therefore necessarily be entrusted to a qualified professional who, with knowledge of the applicable regulations and the practice of the land registry departments, will ensure legal certainty for all parties involved.

Zagreb, 31 August 2026