Contract Solemnisation

Parties are often unsure about the difference between notarisation of signatures and solemnisation of a contract. The text below aims to clear up these doubts.

Have you concluded a sales contract and are unsure whether you need to have it confirmed by a notary public?

In this article you can find out what contract solemnisation is, what the notarisation of signatures involves, and which contracts require solemnisation.

The solemnisation procedure for private documents

Solemnisation is the procedure of confirming, that is, certifying, private documents before a notary public. For a private document, that is, a contract that the parties have concluded in writing, to be solemnised, the parties must take it to a notary public after agreeing on its essential elements. Under the Notary Public Act (Official Gazette 16/07), in the solemnisation of a private document the notary public checks whether the legal transaction contained in the document has been concluded in the prescribed form, and explains to the participants the meaning, consequences and all legal effects of the document, that is, of the legal transaction it contains. In doing so, the notary public must, where possible, examine whether the parties have the capacity and authority to undertake and conclude the transaction, and satisfy themselves of their genuine and serious intent. The notary then draws up their statements in writing, reads them to the parties and, through direct questions, makes sure that the content corresponds to the parties' wishes.

Solemnisation of Contracts as a Notarial Deed

This is important because, if the parties wish to include in a notarial deed statements that are unclear, ambiguous or equivocal, which could give rise to disputes or which would not be legally valid, the notary public will warn them accordingly. If they nevertheless insist on those statements, the notary will include them in the notarial deed, but will specifically note in the deed that the parties were warned of the consequences of such statements. Likewise, if the notary suspects that a party lacks the authority to undertake or conclude a legal transaction, whether because of a missing power of attorney or for any other reason, the notary is obliged to warn the parties. If they still require a notarial document to be drawn up, the notary will draw it up but will state in it that the parties were warned of the deficiency. Once the notary has solemnised, i.e. certified, a private document, it has the force of a notarial deed. It is an enforceable instrument if it establishes a specific obligation to perform on which the parties may reach a settlement, and if it contains a statement by the obligor that, on the basis of that deed, compulsory enforcement may be carried out directly, once the obligation falls due, in order to secure performance of the owed obligation.

The Difference Between Solemnisation of Private Documents and Certification of Signatures

Confirming, i.e. certifying, private documents before a notary public gives them the status of public documents and the force of a notarial deed. Certification of a signature, on the other hand, only confirms that the signature on a document originates from a specific person. Signature certification therefore in no way confirms the content of the document, i.e. that the content above the signature is true. Another difference is that signatures can be certified by notaries public, state administration bodies, and authorised persons in companies, institutions or other legal entities, for example certified extracts from the business books of companies.

Solemnisation of a Loan Agreement

Solemnisation of a contract is generally required for home loans, while for most other loans, certification of the signature on the contract is sufficient. Once the real estate sale and purchase agreement has been concluded, the seller must first have their signature on the contract certified. After certification, the buyer submits a loan application at the bank, together with one certified copy of the contract, the ownership certificate (vlasnički list) and other personal documents. Once the loan is approved, the bank must prepare a sufficient number of copies of the loan agreement and an application for registration of the mortgage in the land registry (gruntovnica). Loan agreements must be solemnised by a notary public, and the cost of solemnisation, which depends on the amount of the approved loan, is borne solely by the buyer. The cost of solemnising a contract or an annex to a contract consists of the notarial fee paid into the state budget, VAT, and the notary's fee.