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Buying property in Slovakia: scams and pitfalls

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

Slovakia's strategic location in Central Europe and economic stability are attracting foreign investors to its real estate sector.

Navigating the property market in this area can be quite challenging, especially for non-local residents. There are various obstacles and unexpected problems that you might encounter if you're not cautious.

Our community of property purchasers, in conjunction with our nearby experts, has identified a multitude of problems. We've listed them all in our Slovakia Property Pack.

We’re going to take a closer look at a few of these in this article.

Is it safe or risky to invest in real estate in Slovakia?

On the surface, Slovakia appears relatively safe for property investments, given its EU membership since 2004.

Yet, it's vital to recognize the underlying concerns.

For instance, in regions like Spiš, there have been instances of properties being sold with unclear land rights, where multiple parties lay claim to the same piece of land due to historical land redistribution policies post-World War II.

Foreigners often find themselves in a maze when understanding the intricate differences of the Slovakian market.

One peculiar aspect is the popularity of "off-plan" properties, where buyers purchase properties before they're constructed. While this offers a price advantage, there's always a risk, as some projects in Bratislava in the past have faced severe delays or even cancellations.

While Slovakia has a robust legal framework, there's often criticism about its slow enactment.

For instance, a buyer might have the law on their side in a dispute, but the legal proceedings could drag on. The case of a British expatriate in the early 2010s comes to mind, where a property dispute in Košice took nearly five years to resolve due to administrative backlogs.

Compared to neighbours like Austria or Hungary, Slovakia's property market might seem shrouded in ambiguity. The absence of a streamlined digital cadastre system means potential buyers need to rely heavily on local intermediaries for land registry checks.

Property disputes, while not rampant, can be daunting in Slovakia. Notably, the land registry errors in the Prešov Region in 2015 led to several ownership disputes, which showcased the system's inefficiencies and the lengthy legal battles buyers might have to brace for.

While Slovakia's government isn’t overtly interventionist, its occasional changes in property tax structures, like the revised taxation in 2011 targeting luxury properties, can affect investment plans.

Many foreigners resonate with the idea that understanding the local community's pulse is crucial.

For example, a German investor in the Trenčín region once faced community resistance for attempting to modify a historically relevant property, underlying the importance of local integration.

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Avoid these pitfalls when purchasing property in Slovakia

The concept of "restitúcia"

When buying residential property in Slovakia, a specific pitfall you should be aware of is related to "restitúcia," a unique concept in Slovak law.

Restitúcia refers to the restitution of properties that were confiscated during the communist era in Czechoslovakia. This process involves returning such properties to their original owners or their heirs.

You might encounter this issue if you're looking at properties, particularly older ones, in historical areas or cities like Bratislava. Many properties in these regions might still be subject to restitution claims.

The complexity arises when you purchase a property without realizing that it is, or could become, subject to a restitution claim, potentially jeopardizing your ownership.

This mistake is not uncommon, especially among foreign buyers who are not familiar with the history and legal backdrop of Slovakia. Many international buyers overlook the necessity of conducting a thorough check on the property's restitution status, assuming that a clear current title is sufficient.

To avoid this pitfall, you should ensure a comprehensive legal check on the property's history is conducted. This includes verifying whether any restitution claims have been made or could potentially be made in the future.

Consulting with a local real estate attorney who specializes in Slovak property law is crucial.

They can help you navigate the complexities of restitúcia, ensuring your property purchase is secure and not subject to future disputes over ownership.

"Bytové Družstvo" or "Housing Cooperative"

In Slovakia, a specific pitfall you should be cautious of when buying residential property is related to "Bytové Družstvo," which translates to "Housing Cooperative."

This concept is unique in the Slovak real estate market, particularly when purchasing an apartment.

You might face this issue if you're considering buying an apartment in a building managed by a Housing Cooperative.

In such cases, rather than owning the apartment outright, you may actually be purchasing shares in the cooperative, which entitles you to the use of the apartment.

This arrangement is different from the direct ownership commonly found in other countries.

The mistake often made by foreign buyers is assuming that the purchase process and ownership rights for an apartment in a Housing Cooperative are the same as buying a freehold property. The nuances of cooperative ownership include shared responsibilities and decision-making processes regarding the building's maintenance and management, which can be quite different from owning a property outright.

This pitfall is not well-known among foreigners, who may not be familiar with the concept of Housing Cooperatives as they operate in Slovakia.

You might overlook the need to thoroughly understand the cooperative's rules, regulations, and financial health before making a purchase.

To avoid this, you should carefully review the cooperative's bylaws and financial statements, and understand your rights and obligations as a member. It's advisable to consult with a real estate lawyer in Slovakia who has experience with Bytové Družstvo.

They can provide valuable insights into the cooperative's operations and guide you through the purchasing process.

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"Veterné práva" or "Wind Rights"

When buying residential property in Slovakia, another specific pitfall to be aware of is the issue of "Veterné práva," translating to "Wind Rights."

This is a unique aspect of Slovak property law, particularly relevant if you're considering buying property in areas with potential for wind energy development.

The context where this might become an issue is when you purchase a property in regions of Slovakia that are attractive for wind energy projects, such as the hilly areas in the northern part. The property may be subject to wind rights, which means that while you own the land, you might not have rights over the air space above it, specifically in the context of wind energy exploitation.

This pitfall is not widely known, especially among foreign buyers who might not be familiar with the concept of wind rights in the Slovak legal system.

It's easy to overlook the need to check whether the property you are interested in is subject to any agreements or restrictions related to wind energy.

To avoid this pitfall, you should conduct a thorough investigation into the property's title and any existing agreements regarding wind rights. Consulting with a local real estate attorney in Slovakia who is knowledgeable about local property laws and the specifics of wind rights is crucial.

They can help ensure that you are fully informed about any potential limitations or agreements associated with the property you intend to purchase.

"Pozemkové Spoluvlastníctvo" or "Land Co-ownership"

A unique pitfall in the Slovak residential property market you should be aware of is the issue of "Pozemkové Spoluvlastníctvo," which translates to "Land Co-ownership."

This situation commonly arises when purchasing property in rural areas or in older, established neighborhoods.

Pozemkové Spoluvlastníctvo occurs when a piece of land is owned collectively by several parties. This can be a result of historical property divisions, inheritance, or other legal factors. When buying a property that is part of such an arrangement, you might inadvertently become a co-owner of the land, along with others, which can lead to complexities in terms of usage, maintenance, and future development.

This issue is particularly relevant in Slovakia due to historical land ownership patterns.

Foreign buyers might not be familiar with the nuances of land co-ownership in Slovakia and may overlook the need to thoroughly investigate the land ownership structure before purchasing.

To navigate this pitfall, you should conduct a detailed land registry check to understand the ownership structure of the property you are interested in. It is advisable to consult with a Slovak real estate lawyer who can clarify the implications of Pozemkové Spoluvlastníctvo.

They can help you understand your rights, responsibilities, and any potential limitations associated with the property.

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"Katastrálna mapa" or the cadastral map discrepancies

In Slovakia, a less commonly known but significant pitfall in the residential property market is related to "Katastrálna mapa," or the cadastral map discrepancies.

The cadastral map is an official registry of land parcels, buildings, and other real estate assets, showing their size, location, and boundaries.

It is important to note that this issue often surfaces when foreign buyers purchase property without verifying the accuracy of the information on the cadastral map against the actual physical boundaries of the property.

In Slovakia, discrepancies between the cadastral map and the ground reality are not uncommon, especially in rural areas or in cases of older properties where boundaries may have shifted or been inaccurately recorded over time.

This pitfall can be particularly tricky for foreign buyers who might not be aware of the importance of cross-verifying cadastral data. They may assume that the information provided in the official registry is accurate, leading to potential disputes over property boundaries or sizes after purchase.

To avoid this issue, you should conduct a thorough survey of the property and cross-check it with the details on the cadastral map.

Hiring a local surveyor experienced in Slovak land issues is advisable.

They can assist in identifying any discrepancies between the cadastral records and the actual property, helping to prevent future disputes or legal issues related to property boundaries.

The concerns about to "Building Permit"

Another unique pitfall in the Slovak residential property market is the issue of "Stavebné povolenie," which translates to "Building Permit."

This pertains to the regulations around property modifications or developments.

You may encounter this issue if you're considering purchasing a property in Slovakia with the intention of making significant alterations or constructing additional structures. In Slovakia, the requirements and processes for obtaining a Stavebné povolenie can be quite stringent and complex, especially in historic or protected areas.

The pitfall here is assuming that obtaining a building permit is a straightforward process or similar to the processes in other countries.

Foreign buyers, not fully aware of the specific Slovak regulations and requirements for property modifications, might underestimate the time, documentation, and approvals needed to obtain a Stavebné povolenie.

This oversight is particularly common among foreigners who might not be familiar with the local administrative procedures and zoning laws.

Without the correct permits, any construction or significant alteration you undertake could be deemed illegal, leading to fines or the requirement to revert the property to its original state.

To navigate this, you should thoroughly understand the local zoning laws and the process for obtaining a building permit in Slovakia. Consulting with a local architect and a real estate lawyer who specialize in Slovak property law is crucial.

They can guide you through the application process for a Stavebné povolenie, ensuring that all legal requirements are met before you begin any construction or major renovation work.

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Problems associated with "Vlastnícke právo k bytu"

In the Slovak residential property market, a specific pitfall to be aware of is related to "Vlastnícke právo k bytu," which means "Ownership Right to an Apartment."

This concept is particularly relevant when purchasing apartments in older buildings or complexes.

The issue arises when you, as a foreign buyer, purchase an apartment assuming full ownership rights, without realizing that the ownership structure in some Slovak apartment buildings can be complex.

In Slovakia, especially in older buildings, there might be a distinction between owning the apartment space and having shared responsibility for the building's common areas, such as hallways, gardens, or recreational facilities. This pitfall is often overlooked by foreign buyers who may not be accustomed to the nuances of apartment ownership in Slovakia.

They might assume that owning an apartment grants them the same rights and responsibilities as in their home country, which is not always the case.

To avoid this, you should thoroughly review the property's ownership documents and understand the specifics of what your ownership entails.

It's important to check whether there are any limitations or specific responsibilities associated with owning an apartment in that particular building.

Consulting with a local real estate attorney or a property agent familiar with Slovak apartment ownership laws is advisable.

They can help clarify the details of Vlastnícke právo k bytu and ensure you are fully aware of your rights, responsibilities, and any shared ownership aspects of the property.

"Vymedzenie služiebnosti" or "Definition of Servitudes"

In Slovakia, a less obvious but significant pitfall in the residential property market is related to "Vymedzenie služiebnosti," which translates to "Definition of Servitudes."

This issue pertains to the legal rights that others may have on the property you intend to purchase, such as right of way, utility access, or other easements.

You might encounter this pitfall when purchasing a property without a thorough investigation into any existing servitudes.

In Slovakia, it's not uncommon for properties, especially in rural areas or older neighborhoods, to have servitudes that are not immediately apparent. These could include rights for neighbors to use a part of your property to access their own, or for utility companies to lay infrastructure across it.

This oversight can be quite prevalent among foreign buyers who might not be familiar with the concept of servitudes as defined in Slovak law.

It's easy to overlook the necessity of checking for these legal encumbrances, leading to surprises and potential restrictions on how you can use your property.

To navigate this pitfall, conducting a comprehensive check on the property’s title for any existing servitudes is essential. Enlisting the help of a local real estate attorney or a knowledgeable property agent in Slovakia is advisable.

They can assist in identifying any servitudes attached to the property and explain their implications for you as a potential owner.

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"Záložné právo" or liens

In Slovakia's residential property market, another specific pitfall to be cautious of is related to "Záložné právo," which translates to "Liens."

This issue concerns the legal claim or hold that a creditor may have on the property you are interested in purchasing.

You might face this pitfall when buying a property without conducting a thorough check for any existing liens. In Slovakia, properties can have liens placed on them due to unpaid debts, loans, or other financial obligations of the current owner. If these are not cleared before the sale, you could inadvertently become responsible for these debts after purchasing the property.

This issue is often overlooked by foreign buyers who may not be familiar with the Slovak system of property liens or might assume that the property sale process automatically clears all such encumbrances.

Without proper due diligence, you could end up with unexpected financial liabilities.

To avoid this, it's essential to conduct a detailed search in the Slovak property registers to check for any liens or other financial encumbrances on the property. Consulting with a local real estate attorney or a property agent experienced in Slovak property transactions is highly recommended.

They can help ensure that any existing liens are identified and resolved before you complete the purchase.

Risks related to "Spoluvlastnícky podiel" or "Co-ownership Share"

When buying residential property in Slovakia, you should also be aware of the pitfall related to "Spoluvlastnícky podiel," which translates to "Co-ownership Share."

This concept is particularly important in transactions involving properties that are jointly owned by multiple parties, such as family inheritances or shared investments.

The issue typically arises when you purchase a property without fully understanding the implications of co-ownership shares. In Slovakia, properties owned by multiple individuals might have divided shares that are not equally distributed. This can lead to complexities in decision-making, especially regarding the sale, renovation, or development of the property.

Foreign buyers might not be fully aware of the nuances of Spoluvlastnícky podiel, particularly how it can impact their rights and responsibilities as a co-owner.

It's easy to assume that owning a part of a property gives you certain freedoms, but in reality, major decisions often require the consensus or approval of all co-owners.

To navigate this pitfall, it's important to conduct a thorough investigation into the property's ownership structure.

You should review the legal documents detailing the co-ownership shares and understand the rights attached to each share. Consulting with a Slovak real estate attorney is advisable to gain clarity on the legal implications of Spoluvlastnícky podiel.

They can guide you on how to manage co-ownership situations, including how to negotiate and communicate with other co-owners.

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