Don't lose money in Malta

We've created a guide to help you avoid pitfalls, save time, and make the best long-term investment possible.

Understand the Konvenju / Preliminary Agreement

Last updated on 

All sources have been thoroughly verified for credibility. Furthermore, a local real estate expert has reviewed and approved the final article.

real estate Malta

Everything you need to know is included in our Malta Property Pack

When it comes to buying real estate in Malta, making sure you fully grasp the property sales contract is essential.

Indeed, not fully understanding the document you will sign can lead to financial losses, including the forfeiture of deposits, payment of penalties, unexpected costs, legal expenses, and potential poor investment decisions.

We've heard countless stories of people making costly mistakes when signing their property agreement in Malta. We want to help you avoid the same experience.

We'll give here a very brief overview regarding the property sales contract in Malta ; if you want a full checklist, please check our property pack for Malta.

What is the Konvenju / Preliminary Agreement in Malta?

In Malta, the property purchase agreement is known as the "Konvenju" or "Preliminary Agreement."

It's a legally binding document that sets the terms for the sale of real estate between the buyer and the seller. This agreement outlines the conditions of the sale, including the price, any conditions to be met, and the timeline.

When you enter into a Konvenju, you're essentially agreeing to buy a property under the conditions laid out in the agreement. It's crucial for both parties as it provides a clear framework for the transaction.

For the buyer, it's a commitment to purchase, and for the seller, it's a commitment to sell under those specific terms.

One key aspect of the Konvenju is the deposit. Typically, the buyer pays a deposit of 10% of the purchase price. This deposit serves as a sign of good faith and commitment to the transaction.

If the buyer backs out without a valid reason as per the agreement's terms, this deposit is usually forfeited.

On the other hand, if the seller backs out, they may be liable to pay you twice the amount of the deposit as a penalty.

For international buyers or non-residents, the process is largely the same, but there are additional considerations.

Depending on your nationality and the type of property you're buying, you might need to obtain an Acquisition of Immovable Property (AIP) permit. This is particularly true if you're a non-EU citizen or if the property is in a Special Designated Area.

The Konvenju is typically signed after you've agreed on the price and terms but before the final deed of sale

It marks the beginning of the final phase of the purchasing process, where searches are conducted, and any conditions (like obtaining a mortgage or a permit) are fulfilled.

The way the Konvenju works in Malta might differ from other countries, particularly in terms of the deposit and the legal implications of backing out of the agreement.

In some countries, the initial agreement might not be as binding, or the deposit requirements might be different. It's always wise to understand these local nuances, especially in international real estate transactions.

Get the full checklist for your due diligence in Malta

Don't repeat the same mistakes others have made before you. Make sure everything is in order before signing your sales contract.

due diligence Malta

What should be included in the property purchase agreement in Malta?

In Malta, the property purchase agreement, or "Konvenju," is governed by the Civil Code, specifically under the laws related to contracts and obligations.

This agreement must include certain mandatory clauses to ensure its validity and protect the interests of both the buyer and the seller.

The mandatory clauses in a Konvenju typically include:

Mandatory Clause Description

Identification of the Parties

Full names and identification details of both the buyer and the seller.

Description of the Property

A detailed description of the property being sold, including its location and any relevant details like the size or type of property.

Sale Price

The agreed-upon price for the property.

Payment Terms

How and when the payment is to be made, including details about the deposit (usually 10% of the sale price) and the balance.


A clear timeline for the transaction, including the date by which the final deed is to be signed.

Conditions Precedent

These are conditions that must be met before the final sale can occur, such as obtaining a bank loan or a specific permit.

Apart from these, there are additional clauses that can be included, depending on the specifics of the transaction:

- These might include stipulations for inspections, surveys, or other forms of property evaluation.

- For situations where either party fails to meet their obligations under the agreement.

- Any other specific terms agreed upon by the buyer and seller.

Conditions or contingencies are often included to protect both parties. For instance, a buyer might include a contingency that the purchase depends on obtaining a satisfactory property inspection or securing a mortgage.

Regarding authentication, the Konvenju must be drawn up and authenticated by a notary. The notary plays a crucial role in the process, ensuring that the agreement complies with Maltese law and that all necessary checks, like title searches, are conducted.

Real estate agents in Malta are involved in the initial stages of the transaction, such as property viewing and negotiation.

However, when it comes to the legal aspects and the drafting of the Konvenju, their role is limited. It's the notary who handles the legalities of the agreement.

What's the signing process like?

In Malta, the process of signing a property purchase agreement, known as the Konvenju, is a critical stage in real estate transactions.

It's a formal and structured process, involving specific steps and requirements.

Firstly, both the buyer and the seller need to sign the Konvenju. It's a bilateral agreement, meaning it requires the consent and signature of both parties to be valid. Either party can indeed comprise several people.

For instance, a married couple might be joint buyers, or siblings might be selling a family-owned property together.

For the signing, both parties need to provide certain documents and information. The seller must present proof of ownership and any other relevant documents related to the property, like planning permits.

The buyer, on the other hand, typically needs to provide personal identification and, if applicable, proof of funds or mortgage approval.

The signing process usually follows these steps:

Step Description

Drafting the Agreement

A notary prepares the Konvenju, including all necessary terms and conditions.

Review and Approval

Both parties review the agreement. This might involve negotiation or revision of certain terms.

Signing the Agreement

The buyer and seller sign the agreement in the presence of the notary. This is often done at the notary's office.

Payment of Deposit

The buyer pays a deposit, usually 10% of the purchase price.

Regarding the timeline, there's no fixed deadline for signing the Konvenju, but it's typically done soon after the terms are agreed upon.

Once signed, the agreement is usually valid for a period agreed upon by both parties, often three months. This period can be extended if necessary, but it requires the consent of both the buyer and the seller.

Traditionally, the signing requires both parties to be physically present.

However, if one party cannot be present, they can grant a power of attorney to someone else to sign on their behalf. With the advancement in digital technologies and changes in response to situations like the COVID-19 pandemic, remote signings may be possible in some cases, subject to legal and notarial protocols in Malta.

After the Konvenju is signed, it's registered by the notary. This registration serves as a formal record of the pending transaction and is important for legal purposes.

Amendments to the contract after it has been signed are possible but require agreement from both parties. Any changes must be formally documented, often requiring a supplementary agreement or an annex to the original Konvenju.

The typical timeframe for completing all necessary paperwork and approvals after signing the Konvenju depends on various factors, such as the completion of due diligence, obtaining any necessary permits, and the readiness of funds for the final purchase. This process usually aligns with the validity period of the Konvenju, often around three months.

However, it can vary based on the complexity of the transaction and any unforeseen issues that might arise.

Don't sign a document you don't understand

Buying a property in Malta? We have reviewed all the documents you need to know. Stay out of trouble - grab our comprehensive guide.

property purchase agreementMalta

How is the payment handled when signing a property purchase contract in Malta?

In Malta, understanding the financial aspects of a property purchase agreement is crucial to navigate the process smoothly.

When you sign the sales agreement, or Konvenju, in Malta, you are typically required to pay a deposit.

This deposit is usually 10% of the property's purchase price. This amount serves as your commitment to the transaction and is a standard practice in Maltese real estate transactions.

There are also upfront fees associated with signing the sales agreement. These can include notary fees for drafting and registering the agreement, which vary but are usually a percentage of the property price.

Additionally, you might incur costs related to due diligence, such as searches or any required surveys.

The payment of the deposit is typically made directly to the seller, not into an escrow account, as is common in some other jurisdictions. The timeline for this payment is usually at the signing of the Konvenju.

Regarding tax implications, when you pay the deposit, you're also required to pay a portion of the stamp duty as a tax on the transaction.

In Malta, stamp duty is generally 5% of the property's value, with part of this amount (usually 1%) paid upon signing the Konvenju.

The down payment amount is generally fixed at 10%, but like most aspects of a real estate transaction, it can be subject to negotiation.

However, deviations from the standard practice might require agreement from both parties and could affect other terms of the sale.

If the sale falls through, the fate of the down payment depends on the circumstances. If you, as the buyer, are unable to fulfill your obligations under the agreement (such as securing financing), you might lose the deposit.

However, if the sale falls through due to a failed inspection or a financing contingency explicitly mentioned in the Konvenju, the deposit may be refundable.

Using a mortgage loan for the down payment is typically not feasible, as the deposit must be available at the time of signing the Konvenju. This means it should come from your personal funds.

In terms of handling the payment process, a notary in Malta plays a key role.

They oversee the signing of the agreement and can guide you on the payment process, including the deposit and associated taxes. While a real estate agent can assist in the negotiation and logistics of the transaction, the financial aspects are usually managed by the notary.

You should always request a receipt or confirmation of payment when you make the down payment. This serves as proof of your compliance with the terms of the Konvenju.

As for tax implications for the seller and buyer, apart from the stamp duty paid by the buyer, the seller may be subject to capital gains tax on the sale of the property.

These taxes depend on various factors, including how long the seller has owned the property and the selling price.

What are the potentials risks and pitfalls?

You might be interested in reading our article about the common risks and pitfalls surrounding a property transaction in Malta.

In Malta, understanding the risks and pitfalls associated with the property purchase agreement, or Konvenju, is important for both buyers and sellers.

Regarding withdrawal from the agreement, both the buyer and seller are legally bound once the Konvenju is signed.

There is no statutory cooling-off period in Malta, unlike in some other countries. This means once you've signed the agreement, you're committed to its terms.

If either party wishes to withdraw from the agreement, they need a valid reason as outlined in the Konvenju. For example, if a buyer cannot secure financing and this was stipulated as a condition in the agreement, they may have grounds to withdraw.

However, if the buyer simply changes their mind or cannot fulfill their obligations without a valid reason, they may lose their deposit.

Conversely, if the seller withdraws without a valid reason, they might be required to pay a penalty, often twice the deposit amount, to the buyer.

If one party fails to fulfill their obligations, the consequences depend on the specific terms of the Konvenju.

Generally, the aggrieved party can seek legal redress, which often involves claiming financial penalties or specific performance (forcing the completion of the sale).

In terms of how the process differs from other countries, many jurisdictions have a cooling-off period, allowing either party to back out of the agreement within a certain time frame without significant penalties.

This is not the case in Malta, where the Konvenju is binding once signed.

Here are some potential risks and pitfalls include:

- If a buyer cannot secure a mortgage, they risk losing their deposit unless the contract specifically includes a financing contingency.

- If issues with the property are discovered after signing, the buyer might have limited recourse if they did not include a satisfactory inspection as a condition of sale.

- Changes in the property market could affect either party. For instance, if property values fall after the Konvenju is signed, the buyer might end up paying more than the current market value.

Disputes during the agreement are not overly common but can occur. In Malta, these are typically resolved through negotiation or mediation.

If these fail, the matter might be taken to court. Legal disputes can be time-consuming and costly, so it's often in both parties' interests to resolve issues amicably.

If the property is discovered to have defects after signing, the buyer’s options depend on the terms of the Konvenju. If the agreement included a clause for a property inspection, the buyer might be able to renegotiate or withdraw from the sale.

Without such a clause, the buyer might have limited options, as the principle of 'caveat emptor' (buyer beware) often applies.

Buyers and sellers should ensure that the Konvenju accurately reflects their understanding and intentions and should consider including clauses that protect their interests, such as inspection contingencies or financing clauses.

This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.