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“For many, buying a home is one of the most important decisions in life, but it is often made hastily and without delving into the essential details. Why does a beautiful view or an attractive price alone not mean a safe deal? A journalist from Žinių radijas talked to Romas Kvaselis, director and founder of Digital Property Market, about this.

 

– Why do people so often not delve into what they are actually buying? Is there some lack of information here, or is it just a rush or ignorance? What are the most common reasons?

 

– I can say that people buy property once or twice in their lives. Therefore, you need to be able to delve very deeply and search – you need to know what to look for, and when you find it, know what it means.

 

– But you have to admit, real estate, housing – this is probably one of the most important purchases in a person’s life.

 

– Yes, because you are buying your own place under the sun on this planet, where you will have a private life, your own space, for which you pay money. Therefore, when buying property, it is very important to check the location. And then you need to delve deeper.

 

– One of such moments is the unique real estate number. I think that not everyone knows what it is and why it is so important in the case of purchasing a home.

 

– It is like a personal identification number – it is always the same, just like the unique real estate number. Only, as in life, property can “disappear”, for example, by dividing it into several parts or merging it with other property. Let's say there was a two-family house, it is turned into a one-family house – and that property already has another unique number. Or we had a plot of land, we divided it into three – then three new unique numbers appear. About the unique number – why is it so important. When buying real estate, we often pay an advance. And when we pay an advance, no one will check for us whether we are buying exactly the property that we think we are buying. Therefore, we need to check the registers ourselves that the unique number really corresponds to the property being purchased. Only at a notary, when the transfer of property is already underway and the transaction is registered, will everything be checked. Of course, there have been cases when the unique number is entered incorrectly or the wrong property is sold, or the seller is not the real owner. Therefore, these things must be checked.

 

– How can an ordinary person check whether the seller is really the legal owner?

 

– Currently, an ordinary person can only demand that the seller provide ownership documents. There is no other way to check yet. We must understand that if the property belongs to someone, it is registered with the Center of Registers. If the Center of Registers issues a registration certificate that clearly shows the owner, then everything is in order.

 

– What do different forms of ownership mean? Why are they important when buying a home? What should a buyer assess for himself?

 

– It is necessary to understand that there are various cases. It is common for us that, for example, when buying a house, a plot of land is also purchased - these things are inseparable. However, there are old homesteads where the documents have not been sorted out since Soviet times, and it is possible that only the house without the land is registered. In such a case, the owner has more rights to buy out the land from the state than someone who just bought the building. Buying a building without the land is a complicated situation. Also, the ownership right to the land can be a lease. For example, in Neringa, all the land belongs to the state. The owners there own the buildings, but they lease the land from the state. If the building is demolished, problems may arise, because there is no object left by which the right to the land could be defined. Therefore, such things need to be checked very carefully.

 

- I was struck by your example - you bought the building, but not the land. What happens if the landowner appears and says: "release the plot"?

 

- This is a very exceptional case. About 90 percent. of all property in Lithuania is registered in the Center of Registers. The remaining 10 percent. is, for example, lakes, roads or undeveloped land, which actually belongs to the state. If you buy a homestead without a developed plot, you will need to contact the municipality and develop the plot and buy it out. Situations when the building belongs to one owner, and the land to another, occur very rarely. As far as I know, the notary would not even approve the transaction if the documents were not in order.

 

– Another important point – what if the plot has several owners?

 

– In this case, the buyer can buy, there are no problems. However, the seller must offer other co-owners to exercise the right of priority to acquire the property. I can say from practice: I have sold more than 100 houses, and in such cases we provided for additional conditions in the contracts so that the neighbors could waive the right of priority, so that the sale would go more smoothly. In any case, all these legal nuances need to be assessed very carefully.

 

– The next point – is the construction completely completed? Why is this moment also important and why should buyers be interested in it?

 

– In any case, when buying a house, you need to check whether the construction is completed and whether it has been legally started at all. You need to check whether there is a permit. Currently, it is not enough to just have a permit – you need to notify about the start of construction, indicate the work guide, technical maintenance, construction insurance. When buying a building that has not been granted, you should pay attention to the additional costs, because you will need to take care of certificates, redo the cadastral file, update the plot plan, and possibly make certain changes. There are simply additional costs to ensure that the documents are fully organized. This is very important in this area.

 

The entire report of “Žinių radijos” – in the video:

 

– In the public space, it is often said that housing is being purchased “on paper”. What are the main safeguards? What could you tell potential buyers – where are the red flags, what should be paid attention to when buying from the drawings?

 

– Buyers should check whether there is a building permit. You need to make sure that the permit was issued for exactly the kind of house that a person wants to buy. These things must be checked.

 

– How important is the role of the developer here? Should it be important for buyers to find out who is building, who is developing the project? Has the state put in place enough safeguards?

 

– I really think not. Whoever wants to, who is able to, and how they are able to build, builds. Therefore, before buying “on paper”, you need to check whether the permits are available, whether the detailed plans have been prepared, whether all the documents have been arranged. Because it is possible that the builder does not have enough experience and is unable to arrange the documents. Imagine, you have paid an advance, and the construction has been suspended due to messy documents. You cannot move into your dream home as quickly as you wanted. And everyone wants it quickly – although the construction of real estate already takes half a year or a year, sometimes the process is even longer because the permits are not issued on time, etc. Therefore, it is necessary to check whether the permit is available, whether it is appropriate, and also to inquire about the builder in the public sphere – what is his reputation, reliability, and whether he is financially capable. You should also not rush to pay large advance payments if there is even the slightest suspicion.

 

– Since we touched on the topic of advance payments – is it really worth paying a smaller advance payment before obtaining a building permit? What is the practice here?

 

– Until a building permit is obtained, construction cannot actually begin. We know that the advance payment partially finances construction, the other part is financed by the builder. So why pay a large advance payment before the permit is issued? Once the permit is obtained, you can pay the entire agreed advance payment. This would be my advice to buyers.

 

– You mentioned the developer’s financial reliability. What other signals, as the transaction approaches, may indicate that it is risky? How not to overlook them?

 

– The signals should be noticed even before signing the preliminary contract. It was necessary to check the builder, property, permits, restrictions, easements, special land use conditions in advance. Before paying the first euro, you need to evaluate everything. That the transaction may be risky can also be judged from the fact that the builder is late in submitting documents or fulfilling obligations. Because for the transaction to take place, the property must be registered. If the property is not registered, the transaction will not take place. And it can be unregistered for various reasons - documents have not been prepared, the construction does not comply with the project, documents have not been properly submitted to the Center of Registers, they have not been approved by experts. If the transaction is delayed on the part of the builder, you need to ask what is happening. There are various reasons - sometimes laws, procedures, processes change.

 

- When you buy a house, what do you always check first?

 

- I haven't bought many houses myself. I live in a block where I built 70 houses, and everything suits me there. But when it comes to buying, you first need to check the location. And it's not enough to see if the plot is beautiful - you also need to check the environment. Are there any planned quarries, will trucks not drive past your house, will there be dust, noise. Everything needs to be evaluated from the outside.

 

– And where to check it? You are the founder of Digital Property Market. Will I get that information there?

 

– You will. I would like to point out that you should check it in state institutions. However, over the course of 20 years of work, I have realized that when checking different state portals, each of them has different information – the Center of Registers, Geoportal, Construction Inspectorate. Previously, you had to check everything separately: look at the Center of Registers, check permits, analyze planning documents. For example, it is possible that a plot of land falls into 20 or more territorial planning documents. You had to open and read them all, figure out which ones are valid. We have created a system that checks all this for you. It selects all territorial planning documents according to the hierarchy and shows which one is relevant. This means that a person only needs to read one document that is valid for him. If it states that the permitted height of a house is 8 meters – then it is valid.

 

– You have basically brought the entire complex process together in one place?

 

– Yes. There are 178 thousand territorial planning documents in Lithuania. And you still need to not only read them, but also understand what they mean, which ones are valid, and why they are valid,  we are still improving this system.”