Buying property in Estonia: notarised contract and land register

Can a property sale contract be concluded without a notary?

No. Under the Law of Property Act (asjaõigusseadus, AÕS), a transaction by which the parties undertake to acquire or transfer an immovable must be notarially authenticated (AÕS § 119 lg 1) [1]. Apartment ownership is separate ownership of a physical part of a building combined with a notional share in the co-ownership of the immovable (KrtS § 1 lg 1) [2], and the rules on ownership of immovables in other laws apply to it where the Apartment Ownership and Apartment Associations Act (korteriomandi- ja korteriühistuseadus, KrtS) does not regulate the matter (KrtS § 1 lg 3) [2]. The same form requirement therefore applies when buying an apartment.

If the form required by law is not followed, the transaction is void unless otherwise provided by law or by the purpose of the form requirement (TsÜS § 83 lg 1) [6]. According to the Supreme Court (Riigikohus), the purpose of notarial authentication is to protect the parties through advice and warning when they enter into economically significant transactions (RK 3-2-1-40-17) [7]. An obligation transaction made without a notary nevertheless becomes valid if a real right agreement has been concluded to perform it and the corresponding entry has been made in the land register (AÕS § 119 lg 2) [1].

The form requirement is not limited to the sale contract itself. According to the Supreme Court, any obligation that is even indirectly aimed at transferring ownership of a specific immovable must be notarially authenticated – for example, an auction deposit agreement under which the money is not returned if the sale contract is not concluded (RK 2-20-2851/30) [8].

When does the buyer become the owner?

Transferring ownership of an immovable requires a notarially authenticated real right agreement (asjaõigusleping) and a corresponding entry in the land register (kinnistusraamat) (AÕS § 64¹) [3]. A real right agreement made subject to a condition or a term is void (AÕS § 120 lg 2) [9]. A notary authenticates the real right agreement only if the notarially authenticated sale contract is presented or is authenticated at the same time (AÕS § 120 lg 3) [9].

An application for entry to which a notarially authenticated disposition must be attached has to be notarially certified, and it is submitted to the land registry department through the notary who certified it (KRS § 34 lg 7¹) [10].

Risk is a separate question from ownership: the risk of accidental destruction of or damage to the property passes to the buyer when the property is handed over (VÕS § 214 lg 2) [11].

How to check the land register before buying?

Anyone may examine a register part and obtain printouts of it, at a notary's office or through the relevant website (KRS § 74 lg 1 and 4) [12]. The data entered in the land register are presumed to be correct (AÕS § 56 lg 1) [13]. If a person acquires an immovable relying on the land register data, the data are deemed correct with respect to that person, unless an objection has been entered or the acquirer knew or should have known that the data were incorrect (AÕS § 56¹ lg 1) [14].

The property also fails to conform to the contract if a third party has a claim or other right in respect of it that the third party may assert (VÕS § 217 lg 2 p 4) [15]. The seller of an immovable is obliged „kinnistusraamatusse kantud õiguse või selle seadmist tagava nõude kohta tehtud märke kõrvaldama ka juhul, kui ostja seda õigust või märget teab“ (translation: to remove a right entered in the land register or a notation of a claim securing its establishment, even if the buyer knows of that right or notation; VÕS § 218 lg 5) [4]. The seller of an immovable is not liable for public taxes and other public charges on it (VÕS § 218 lg 6) [4].

What is the seller liable for?

The property must conform to the contract; among other things, it does not conform if it lacks the agreed characteristics or, where no characteristics were agreed, is not fit for the purpose for which things of that kind are usually used (VÕS § 217 lg 1 and lg 2 p 1 and 2) [15]. According to the Supreme Court, information given in the sale advertisement may also constitute agreed characteristics (RK 3-2-1-46-17) [16]. The Supreme Court agreed that a working stove, access to water and, where there is no other option, a working sewage collection tank are as a rule prerequisites for using a dwelling house (RK 3-2-1-53-17) [17].

The seller is liable for a lack of conformity that existed when the risk passed to the buyer, even if it becomes apparent later (VÕS § 218 lg 1) [4]. The seller is not liable if the buyer knew or should have known of the lack of conformity when the contract was concluded (VÕS § 218 lg 4) [4]; however, this does not limit the seller's liability for hidden defects, which are assessed from the point of view of a person without special knowledge, not an expert (RK 3-2-1-46-17) [16]. The seller cannot rely on an agreement excluding liability if they knew or should have known that the property did not conform and did not tell the buyer (VÕS § 221 lg 2) [18].

If a seller acting in their economic or professional activity sells a consumer an immovable or an apartment ownership that includes a building, a lack of conformity that becomes apparent within two years of the building being handed over is presumed to have existed at the time of handover, unless the presumption is incompatible with the nature of the building or the defect; an agreement derogating from this to the consumer's detriment is void (VÕS § 218 lg 2¹) [4].

What to do if a defect appears after the purchase?

Notify the seller of the lack of conformity within a reasonable time after you became or should have become aware of it (VÕS § 220 lg 1) [5]. If you do not notify in time, you cannot rely on the lack of conformity; if the failure to notify is reasonably excusable, you may still reduce the price or claim compensation for damage, except lost profit (VÕS § 220 lg 3) [5]. Despite late notice, you can rely on the lack of conformity if it arose from the seller's intent or gross negligence, or if the seller knew or should have known of the defect and did not disclose it (VÕS § 221 lg 1 p 1 and 2) [18]. According to the Supreme Court, a seller who has owned the property for a long time must be presumed to know at least that the house does not meet elementary living conditions (RK 3-2-1-53-17) [17].

You may demand that the defect be repaired (VÕS § 222 lg 1) [19]. If the seller does not repair it within a reasonable time despite a justified demand, you may repair it yourself and claim reimbursement of reasonable costs (VÕS § 222 lg 5) [19]. Repair must be demanded together with the notice or within a reasonable time after it (VÕS § 222 lg 6) [19]; the exception for consumer sales (VÕS § 222 lg 7) [19] does not extend to immovables, because a consumer sale is a sale of a movable (VÕS § 208 lg 4) [20]. If the seller has not completed the repair or has refused it, you may reduce the price (VÕS § 224 lg 1; VÕS § 223 lg 1 p 1 and 2) [21] [22] and, if the lack of conformity is material, withdraw from the contract (VÕS § 223 lg 5) [22].

The limitation period for a claim arising from a transaction is three years (TsÜS § 146 lg 1) [23]. A claim under a sale contract arising from a defect of a building does not expire before five years from completion of the building, and if the obligor breached their obligations intentionally the limitation period is ten years (TsÜS § 146 lg 2 and 4) [23].

How much does the notary cost?

A notary may charge fees only to the extent and in the manner set out in the Notary Fees Act (notari tasu seadus, NotTS) and may not agree to change the fee rates (NotTS § 2 lg 3) [24]. The fee depends on the transaction value, which is the price declared by the parties; if that is lower than the usual value of the property, the transaction value is determined on the basis of, among other things, the taxable value of the land, the amount of a mortgage or the insured sum (NotTS § 3 lg 2 and 3) [25]. The minimum value of an immovable is 6391 euros, of a notional share 1278 euros, and of a physical part together with its notional share (such as an apartment ownership) 3800 euros (NotTS § 4 lg 1) [26].

A sale contract is a bilateral transaction, and the fee for authenticating it is double the full fee (NotTS § 23 p 2) [27]. If the real right agreement and the application for entry are in the same document as the sale contract, no separate fee is charged for them; if the sale contract was authenticated earlier, authenticating the real right agreement costs 19,10 euros (NotTS § 25) [28]. If a mortgage is authenticated at the same time, the transaction value of the transfer is, with an exception set out in the Act, 2/3 of the value of the immovable (NotTS § 5 lg 2) [29].

In addition to the notary fee, a state fee is payable for entering the new owner; it is set according to the transaction value under annex 2 of the State Fees Act or as a fixed sum (RLS § 74; RLS § 76 lg 1) [30] [31].

What the law says

• „Tehing, millega kohustutakse omandama või võõrandama kinnisasja, peab olema notariaalselt tõestatud.“ [1] (translation: a transaction by which the parties undertake to acquire or transfer an immovable must be notarially authenticated; AÕS § 119 lg 1) – a sale contract made without a notary is as a rule void.
• „Asjaõigusleping kinnisomandi üleandmiseks, mis on tehtud tingimuslikult või tähtpäeva määrates, on tühine.“ [9] (translation: a real right agreement for transferring ownership of an immovable that is made subject to a condition or a term is void; AÕS § 120 lg 2) – the transfer of ownership cannot be tied to a condition or a date.
• „Kinnistusraamatusse kantud andmete õigsust eeldatakse.“ [13] (translation: the data entered in the land register are presumed to be correct; AÕS § 56 lg 1) – as a rule, you may rely on the land register.
• „Müüja vastutab asja lepingutingimustele mittevastavuse eest, kui mittevastavus on olemas juhusliku hävimise ja kahjustumise riisiko ülemineku ajal ostjale, isegi kui mittevastavus ilmneb hiljem.“ [4] (translation: the seller is liable for a lack of conformity that exists when the risk of accidental destruction and damage passes to the buyer, even if it becomes apparent later; VÕS § 218 lg 1) – a defect discovered later may still be the seller's responsibility.

What to do

1. Before buying, examine the register part of the property and check who the owner is and which rights and notations are entered (KRS § 74 lg 1; AÕS § 56 lg 1) [12] [13].
2. If you are asked to pay a deposit before the notary that will not be returned if you withdraw from the purchase, bear in mind that, according to the Supreme Court, any obligation even indirectly aimed at transferring ownership of an immovable must be notarially authenticated, for example an auction deposit agreement (AÕS § 119 lg 1; RK 2-20-2851/30) [1] [8].
3. Write the agreed characteristics and known defects into the contract: the seller's liability depends on the contract terms and on what the buyer knew (VÕS § 217 lg 2 p 1; VÕS § 218 lg 4) [15] [4].
4. At the notary, conclude the sale contract and an unconditional real right agreement, and submit the application for entry through the notary (AÕS § 120 lg 2 and 3; KRS § 34 lg 7¹) [9] [10].
5. If you discover a defect, notify the seller within a reasonable time and demand repair at the same time (VÕS § 220 lg 1; VÕS § 222 lg 6) [5] [19].

Frequently asked questions

Do the same rules apply to buying an apartment as to buying a house?

Yes. The rules on ownership of immovables apply to apartment ownership where the Apartment Ownership and Apartment Associations Act does not regulate the matter (KrtS § 1 lg 3) [2]; so an apartment sale contract must also be notarially authenticated (AÕS § 119 lg 1) [1].

Am I the owner on the day I sign at the notary's?

In addition to the notarially authenticated real right agreement, an entry in the land register is required for ownership to pass (AÕS § 64¹) [3].

Is the seller liable for a defect I knew about?

As a rule, no: the seller is not liable for a lack of conformity that the buyer knew or should have known of when the contract was concluded (VÕS § 218 lg 4) [4]. According to the Supreme Court, this rule does not limit the seller's liability for hidden defects (RK 3-2-1-46-17) [16].

Does a clause excluding liability release the seller?

Not if the seller knew or should have known that the property did not conform to the contract and did not tell the buyer (VÕS § 221 lg 2) [18].

Is the state fee lower when buying from a close relative?

Yes. If the acquirer is a descendant or ascendant, spouse or registered partner of the owner, 50 percent of the full rate is payable; for the owner's sister or brother or their descendant, 75 percent of the full rate (RLS § 76 lg 2 and 3) [31].