Taking counsel: Lithuanian real estate transaction registration

  • 2006-11-01
  • by Nijole Vaiciunaite
With the new Lithuanian Civil code, which came into effect in July 2001, the registration of transactions in the public register changed. Before the new civil code, the validity of a transaction was influenced by the way it was registered. For example, a real estate purchase-sale contract came into effect only after its registration in the public register.

As of July 2001, the registration of a transaction does not need to be complete for the transaction to take effect, except for some cases defined in the civil code. The registration of a purchase-sale contract and other transactions involving real estate in the public register, i.e. at the Center of Registers (CoR) is not obligatory.

Even though the registration of real estate transactions at the CoR is not obligatory, the purchase-sale contract is still very important in regard to the protection of one's rights and lawful interests.
One should always keep in mind that as long as the new property owner has not registered their rights of ownership, the former property owner is considered to be the owner against any third party. If a new owner does not register their ownership, an unscrupulous former owner may be able to transfer the property to another person.

This is very important if the transaction involving the property was registered only by the second buyer from the former owner of the property, or if the second buyer registers the transaction before the first buyer does. In this case, the second buyer is considered to be the rightful owner of the property irrespective of whether that transaction was concluded after the purchase-sale transaction with the first buyer.

The registration of transactions is a key step in regard to protecting the rights of the purchaser. Registration also serves as an important guarantee for potential buyers of real estate or other people performing real estate transactions.
Pursuant to the current law in Lithuania, a notary who has certified a real estate transaction must send information about the execution of the transaction to the CoR within 24 hours.

On the basis of such notification, the public registrar places a mark in the register about the transaction. It should be noted that such a mark cannot be removed until the CoR receives other documents confirming that another person has acquired the property, or that the transaction was terminated due to some other reason.
Such provisions established in the law ensure that information on transactions involving real estate is to be made public irrespective of the will of the parties to transaction.

A notary who sees a mark at the CoR that the owner of property had already concluded a transaction, will not attest one more transaction concluded by the same person for the same property.

Nijole Vaiciunaite is advocate of Jurevicius, Balciunas & Bartkus, a member of Baltic Legal Solutions, a pan-Baltic integrated legal network of law firms including Teder Glikman & Partnerid in Estonia and Kronbergs & Cukste in Latvia, dedicated to providing a quality 'one-stop shop' approach to clients' needs in the Baltics.