Buying Procedures
When you find a property you like, have agreed with the seller on the price and conditions of sale, it is up to you to take a decision to proceed with the purchase. Once this is decided, a preliminary agreement (convenium) is signed between the vendor and purchaser. This agreement binds both parties to purchase/sell the immovable property under the terms and conditions agreed upon. The signing of the final deed is, however, always subject to good title being proved and the issue of any relative permits to purchase. The agreements and contracts may be written in English.
On signing the preliminary agreement, a sum equivalent to 10% of the price is lodged with the agent or notary public as stake-holder. This deposit will be forfeited in favour of the vendor should the purchaser fail to complete the final deed of transfer for no valid reason at law.
The agreement is usually valid for three months (term prescribed by law) or as mutually agreed by the parties. During the period between the signing of the preliminary agreement and the signing of the final deed of sale, a Notary Public engaged by the purchaser will carry out the necessary researches into the property to confirm good title, as well as submit the application to purchase to the Ministry of Finance if necessary.
Once the relative permit has been issued and researches have proved clear title to the property, the final contract of sale may be entered into - the deed of sale being drawn by purchaser's Notary. The balance of the purchase price and Stamp Duty plus legal expenses, are paid on the signing of the contract when vacant possession to the property is handed to the purchaser. (1% of the stamp duty due is payable on the signing of the preliminary agreement).
Expenses connected with the acquisition of property:
- Duty on documents 5%
- Notarial fees 1% (approx.)
- Searches & Registration Lm200 (approx.)
- Ministry of Finance fee (A.I.P.) Lm100
N.B. The above expenses are the liability of the purchaser, while brokerage fees due to the estate agency are borne by the vendor.
