The pre-contract for the sale-purchase of a property: what is its role and who pays the taxes

What is a preliminary sale-purchase agreement

What does precontract mean? An antecontract or a contract promise is simply an agreement between two parties, more precisely the promisor and the beneficiary. The first undertakes to conclude a subsequent contract with the second, the elements of which will be predetermined with the help of the signed preliminary contract. Practically, this act is an agreement of wills regarding the established aspects. If both parties assume the option to conclude the contract, the promise will be bilateral. In our case, the owner of a building assumes the obligation to sell a building/apartment, and the future buyer assumes that he will buy the building/apartment.

According to the law, any movable or good can be the subject of a preliminary sale-purchase contract. With the help of such an act, the following aspects will be established mandatorily:

• the object of the sale, for example a detached or non-detached apartment ;
• the price of the asset whose ownership will be transferred;
• the term until which the transaction is concluded;
• other clauses considered essential by the parties for the contract to be concluded.

There are several types of pre-contract: the bilateral one, with mutual and interdependent rights and obligations for both parties involved in signing it, and the unilateral pre-contract, with obligations and rights only for one of the parties involved.

How long is a preliminary real estate sale-purchase contract valid? Although this document will not contain a date of its validity, there may be various mentions that will refer to the date on which the final contract between the buyer and the seller will be concluded. There are also situations in which the parties will extend this date with the help of an additional document added to the pre-contract.

How and where to conclude a preliminary sales-purchase contract

Here's what the law says:

Closing conditions

In order for a pre-contract to be concluded, it must establish the elements mentioned above (object of sale, price, deadline for concluding the transaction and other clauses) and contain the signatures of the promisor and the beneficiary.

This contract is also valid when it was made in writing under a private signature. An authentic ad validitatem form is not required, so a written agreement will be sufficient. Of course, for greater security, it is also recommended to present it in front of a public notary.

Would it be a good idea to download a real estate sale-purchase pre-contract model online? Basically no, because:

• the respective model does not take into account the particularities of the sales operation that you are going to carry out;
• you risk finding a model that is favorable to the opposing party;
• standard contractual clauses are difficult to modify;
• models available online do not always include pre-contract advance recovery conditions. Keep in mind that the return of the pre-contract sales-purchase advance is a very important aspect. Ignoring these specific clauses can result in losing your money!

How much does a pre-contract at the notary cost? You could use a calculator for notary fees to find out the minimum price, but, in general, the price of the preliminary contract at the notary varies according to the rates of each individual notary.

The notary fee paid by the buyer will be determined taking into account the advance paid by the buyer at the time of signing the pre-contract. It will be calculated based on the value paid for the building, not based on the total price of the apartment.

Therefore, the notary fees will be paid by the buyer of the property.

Termination Conditions

There are several situations that will determine the termination of a pre-sale purchase contract, as follows:

• by the agreement of the parties, who will mutually agree to waive the obligation to conclude the sale-purchase contract in the future;
• by means of termination, at the initiative of the party that has respected its obligations. In this case, the promising buyer or the promising seller will return the advance and a penalty equal to that of the advance, respectively will lose the advance paid.

According to the New Civil Code, the prescription will intervene within six months from the date on which the sale-purchase contract should have been concluded. So, in order for an action in court to be admitted, if the pre-contract was not respected, it must be introduced within this six-month period.

What you need to know about the advance

The advance that you are going to pay will be established by mutual agreement with the seller, even if we are talking about a pre-contract based on a mortgage loan or pre-contract with the First House. By the way, find out what pre-approval of a loan means .

If you are going to contract a mortgage loan, the bank will be able to establish the amount of the advance required to be paid from your own income, as a precondition for granting financing.

So, how much is the pre-contract advance? You will agree with the seller of the property.

Necessary documents

The list of documents required for a preliminary apartment sale-purchase contract, for example, will include:

• the identity documents of the parties involved;
• power of attorney in case the buyer/seller cannot be present and will be represented by another person;
• the property documents of the building, for example: the sale-purchase contract, the handover-acceptance report, the property title, the donation contract, the heir's certificate and, in certain situations, the construction permit and the reception documentation;
• valid tax certificate attesting the non-existence of tax debts, in certain situations;
• cadastral documentation, but only for buildings registered in the land register;
• extract from the land register for information, if the building was registered in the land register.

Can a preliminary contract be made without cadastre and tabulation? Yes, considering that it is not necessary to register the building in the land register at the time of signing the pre-contract.

Why conclude an antecontract - advantages

Although this act is not mandatory, its conclusion can be an additional guarantee that both parties will assume the obligations arising from it. In other words, if there are misunderstandings or non-compliance with the contractual clauses, the injured party will have the right to request a court to recognize this act and give a decision that will take the place of the sale-purchase contract.

This can happen if the other conditions stipulated by the law are fulfilled, for example the tabulation of the respective building. In addition, failure to comply with the pre-contract by the seller or buyer may lead to damages being obtained by the damaged party.

In the pre-contract, it can be established what will happen if the future sale-purchase contract is not drawn up, but the prohibition to sell the property to another person can also be imposed.

Who pays the necessary taxes

In most cases, the necessary taxes will be paid by the buyer. However, there are also situations in which the parties can establish that notary fees, for example, are paid proportionally or exclusively by the seller.

What to pay attention to before signing the preliminary contract

We suggest that you take into account at least the following aspects before signing the preliminary sale-purchase contract:

• the identification data of both parties have been written correctly;
• you have read all the clauses, so that you don't have any surprises in the future;
• you have checked all the relevant information: the term of delivery of the building, its condition, the grace period for the contract or other conditions for suspending the contract;
• you paid enough attention to the clause that refers to the return of the advance in the event that the sale-purchase contract will no longer be realized and the parties have not respected their obligations.

Draw up such a contract if you want to benefit from an extra guarantee, even if it is not a mandatory step for purchasing an apartment.