Real Estate Purchases and Sales in Lithuania
A purchase-sale agreement is a contract in which one party (the seller) undertakes to transfer an object (good) to the other party (the buyer) for ownership or trust, and the buyer agrees to accept the object (good) and pay the agreed price (amount of money).
According to the requirements for registration in the Real Estate Register, as outlined in Article 9 of the Real Estate Register Law of the Republic of Lithuania, the following objects are considered subject to registration, provided they are formed as separate real estate objects and assigned a unique number in accordance with the Real Estate Cadastre Law:
- Land plots;
- Buildings;
- Apartments in multi-apartment buildings;
- Premises.
Real Estate Purchase–Sale Agreement in Lithuania
A real estate purchase–sale agreement must be in notarized form. Failure to comply with the form requirements renders the agreement invalid. Against third parties, a real estate purchase–sale agreement may only be used and have legal consequences if it is registered in the public register in accordance with the procedure established by law.
The real estate purchase–sale agreement must specify the price of the real estate being sold. If the price is not specified in the agreement, the agreement is considered not to have been concluded. The general rules of the Civil Code that allow for the determination of the price based on reasonableness criteria or recognize the customary price in the relevant area at the time the agreement is concluded do not apply to purchase–sale agreements.
When a share of real estate is being sold in Lithuania
Co-owners have the right of first refusal to purchase the share of the jointly owned property at the price at which it is being sold and under the same conditions, except in cases where the sale occurs through a public auction. When a share of real estate held in joint ownership is being sold, notification must be made through a notary. If the other co-owners refuse to exercise their right of first refusal or do not exercise this right within one month from the date of receiving the notification—unless otherwise agreed among the co-owners—the seller has the right to sell their share to any person. If the share is sold in violation of the right of first refusal, another co-owner has the right to apply to the court within three months to request that the buyer’s rights and obligations be transferred to them.
When selling a building, facility, or other immovable object the buyer’s rights to the land plot on which the real estate object is located must be addressed. A contract that does not specify the buyer’s rights to the land plot may not be notarized, and if notarized, is deemed invalid.
Special requirements when selling a land plot. When selling a land plot that contains buildings, structures, facilities, plantings, or other objects, the contract must address the issue of the transfer of ownership rights to those objects. If this issue is not addressed in the contract, it is considered that ownership of the buildings, structures, facilities, plantings, and other objects located on the sold land plot is transferred to the buyer of the land plot—i.e., the accessory follows the fate of the principal object. If a land plot containing buildings or other immovable objects owned by the seller is sold without transferring ownership of those objects to the buyer, the seller retains the right to use the portion of the land plot occupied by those immovable objects, under the right and conditions specified in the purchase–sale agreement.
When selling land in Lithuania, attention must also be paid to individuals who have the right of first refusal to purchase it. According to the law, the following parties have priority in purchasing land:
- Co-owners of the land plot;
- The state, if the land is in a protected area;
- Owners of buildings, structures, or equipment located on the land for sale;
- Participants in land consolidation projects when the land being transferred is part of the project.
It is important to note that a land purchase-sale agreement must include a plan of the land being sold.
When forming a real estate purchase-sale agreement, it is important to consider the legal relationship of the property, especially concerning family law. A residential property, according to Book 3 of the Lithuanian Civil Code, may be considered family property. The legal regime of family property is necessary to protect the family’s interests and ensure the satisfaction of essential family needs. A spouse who owns real estate considered family property may only transfer ownership or encumber the property with the written consent of the other spouse. If the spouses have minor children, the court’s permission is required for transactions involving family property.
Property that is held as joint ownership by spouses must be managed and disposed of jointly. Transactions involving the disposition or encumbrance of joint ownership real estate or rights to it can only be made by both spouses, except when one spouse holds a power of attorney from the other spouse to carry out such a transaction. Transactions made without following these provisions may be contested.