Albania: Guide to Buying Costs and Procedures

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Last Updated: Jul 25, 2008

Buying costs are very low, but risks are high

How high are realtors’ and lawyers’ fees in Albania? What about other property purchase costs?

Transaction Costs
		Who Pays?
Notary fees	0.05% - 0.25%	buyer
Lawyer's fee	0.10% - 0.50%	buyer
Agent's fee	1% 2%	buyer seller
Costs paid by buyer	1.15% - 1.75%
Costs paid by seller	2%
ROUNDTRIP TRANSACTION COSTS	3.15% - 3.75%
See Footnotes Source: Global Property Guide

How difficult is the property purchase process in Albania?

There are no restrictions on the foreign ownership of real estate in Albania, except for agricultural land.

The buying process typically involves signing several contracts - a reservation agreement, an undertaking contract, a preliminary contract and the actual sale-purchase contract.

After the reservation agreement has been signed, the property is reserved for about 4 weeks by the buyer. During this period, the buyer (through his lawyer) undertakes due diligence checks on the property.

While the services of lawyers are not mandatory for a property purchase in Albania, a lawyer is highly recommended. Buyers should be especially careful if the property was confiscated during the Communist period. Since the end of communism in the early 1990s, around 85% of properties have been returned to their previous owners. The remaining 15%, located mainly in Tirana and coastal areas are still waiting for a resolution. The buyer’s lawyer must ensure that the property in question is free from liens and is under the name of the actual seller.

Another problem is the quality of construction. Some developers take shortcuts in obtaining building permits. Some apartments are smaller than stated in the contract.

After all the necessary documents have been obtained, the ‘main undertaking contract’ is signed by both parties. This signifies their promise to buy and to sell the property respectively. It contains details of timescales, payment terms, prices and the terms and conditions of the purchase. The undertaking contract is signed in front of a Notary Public, a public official appointed by the government.

A 10% down payment for second-hand properties is usually paid upon signing of the preliminary contract. For new properties or off-plan developments, the down payment is typically 30%.

The final sale-purchase contract is signed in front of a Notary once the property has been fully paid for. The final contract is registered at the Office of the Immovable Property Registration (ZRPP) for the transfer of the title deed to the new owner.

Buyers should also be careful when dealing with real estate agents in Albania. There are only a handful of established real estate agencies in Albania. However, there are about a hundred unscrupulous part-time agents. The industry is unregulated. Anyone can claim to be an agent. In certain cases, some agents sell properties even without the knowledge of the legal owners.

Completed in about 47 days, there are seven procedures in registering the property, according to the World Bank’s Doing Business.

Footnotes to Transaction Costs Table

The round trip transaction costs include all costs of buying and then re-selling a property – lawyers’ fees, notaries’ fees, registration fees, taxes, agents’ fees, etc.

Notary fees:
Notarization is mandatory for sale-purchase agreements. The fee is set by the Ministry of Justice and the Chamber of Notaries. Notary Fees are estimated proportionally based on transaction value. The minimum notary fee is ALL3,500 (€29) for a property worth ALL100,000 (€835). The maximum fee is ALLL150,000 (€1,253) for properties worth ALL100 million (€835,090) or more.

NOTARY FEES
PROPERTY VALUE (IN ALL)	NOTARY FEES (IN ALL)
100,000 - 3,000,000	3,500 - 7,000
3,000,000 - 4,000,000	7,000 - 8,500
4,000,000 - 6,000,000	8,500 - 10,000
6,000,000 - 8,000,000	10,000 - 15,000
8,000,000 - 10,000,000	15,000 - 18,000
10,000,000 - 15,000,000	18,000 - 23,000
15,000,000 - 25,000,000	23,000 - 30,000
25,000,000 - 40,000,000	30,000 - 35,000
40,000,000 - 50,000,000	35,000 - 40,000
50,000,000 - 70,000,000	40,000 - 50,000
70,000,000 - 100,000,000	50,000 - 100,000
Over 100,000,000	Max of 150,000

Lawyer's fee:
The role of lawyers in the property purchase process is not mandatory but is highly recommended because of the complex nature of ownership in the country. Legal fees are negotibale, it can be a fixed amount ranging from €500 to €1,000 per transaction or percentage of property value.

Agent's fee:
Commission for the real estate agent is split between buyer (1%) and seller (2%). In certain cases, the agent's commission is already incorporated into the price.