The Promise of Sale (Konvenju) in Malta

In Malta when a purchaser has decided on a property and the price has been verbally agreed, a legally binding agreement is then drawn up by a Notary (normally instructed by the purchaser) and both parties meet and sign what’s commonly known as a Promise of Sale or Preliminary Agreement (Konvenju in Maltese). This agreement is valid for a specific number of months with the typical time period ranging from 3 to 6 months. The “law” requires this “Konvenju” to be registered with the commissioner of the Inland Revenue together with the part payment of 20% of the total stamp duty (paid by the purchaser). Typically the Notary will take care of this within 21 days of the signing or the agreement expires.

What is required of the vendor?

The seller must provide an official document for personal identification such as a passport or ID card as well as a copy of the original purchase contract, any plans of the property and/or relevant building permits. If the property was acquired during marriage both individuals will need to be present. If the seller cannot attend then a “power of attorney” will need to be arranged. In the event of a company being involved then a copy of its memorandum will be required or a resolution from the board of directors enabling a chosen person to participate in the transaction.

What is required of the purchaser?

The buyer will also need to show personal identification and pay a deposit (which is normally 10% of the agreed sale price). This deposit is then held by the Notary until the date of the final contract, or in some cases, the deposit is realised to the vendor once the title has been proved and the searches undertaken.
At this stage, the buyer will also be liable to pay the Notary fee which is normally 1% of the sale price and 20% of the total stamp duty (with the remaining 80% due at the final contract).

Property  buying conditions

The Promise of Sale is a binding agreement with the vendor and purchaser committing to the transaction at a particular price, timeframe and with a list of any conditions such as the legal title of the property being confirmed to the vendor. The Notary will also check that there are no legal claims, loans or litigation that can impair tor with-hold the sale. There can also be other conditions within a ‘Konvenju’ such as completion will only take place if a favourable architects inspection is obtained or if any building permits are in order. If the purchaser is non-Maltese then an AIP permit may be required (which the Notary will normally apply for). If any of these conditions are not successfully concluded then the purchaser has the right to pull out of the agreement and the deposit would be returned to them.

Searches and background checks

After the ‘Konvenju‘ has been signed and before the agreed date of the final contract, the Notary will conduct searches involving the gathering of many historical documents about the property. The main motive for this is to confirm ownership of the vendor, but this process will also unearth any other liabilities on the property such as outstanding ground rent. The Notary can also provide a title report.

Once all the above has been carried out then the final contract can be formally signed by both parties on the agreed date and with the Notary in attendance. When a home loan or mortgage is required the final contract is sometimes held at the location of the bank or lender.

For more information about the buying process in Malta click here…. 

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