The Konvenju (Promise of Sale Agreement)
Once you have found your dream Malta property and wish to make an offer, you can do this in a number of ways.
You can either deal direct with the owner, and if you are buying through Home Sale Malta, we can help with any offers and subsequent negotiations.
However, preferably; speak to your Lawyer. Your Lawyer is there to protect you and your interests. They can advise on legal and tax implications and can steer you through the legal process that is being used to purchase the property.
Once the price has been agreed on, it is then advised that all parties sign the Promise of Sale (Konvenju) as soon as possible, as this binds both parties to the transaction. This is where the Notary comes in. A Notary to undertake a Konvenju is chosen by the Buyer of the property. Both parties can use the same official.
It is very important to understand that a Notary is a ‘neutral’ party to the transaction. They are there to cater to both sides, buyer and seller. They are NOT legal advisers. Buying property is probably the largest purchase you will ever make. Good legal advice is paramount.
The Konvenju (promise of sale) will cover some if not all of the following;
- Details of participants involved
- Property details
- Payment details
- Any conditions being applied from either side
- V. Conditions relating to the final deed according to Maltese Law
- VI. Date of completion
- VII. Outstanding works to property to be finished before completion
- VIII. Establishing if there is ground rent, is it temporary or perpetual?
The Konvenju (Promise of Sale) is a legally binding agreement with a period of validity, again agreed with both parties. This is normally 90 days from signing but can be longer, and can be extended with the agreement of BOTH parties.
At the time of signing there are fees to be aware of. Crucially a sum of 10% of the property price agreed (this is the normal figure, but again sums can be agreed between parties), is paid to the Notary Public and held in escrow, that is, held by trusted 3rd party until completion of transaction to both parties’ satisfaction. There is also a 1% fee to be paid to the Inland Revenue Department, and your Notary will register this within 21 days. This covers the provisional duty, the outstanding duty to be paid at the signing of the Final Deed.
During the agreed Konvenju time lines, your Notary will be undertaking searches on the property, dealing with permits and the Acquisition of Immovable Property Permit (AIP). It is advisable to keep in touch with the owner to see that other conditions are being attended to, or ask your lawyer to do this for you. This is also when you will be speaking to your Architect as they will undertake an inspection of the property.
Your Notary will need an original copy of the property from the Land Registry, your Architect will help you here, and if you are taking out a mortgage, you will need to produce your original sanction letter from your lender.
Further In-depth Explanation