While purchasing or selling real estate, the use of the notary deposit account usually ensures a secure transaction for both the seller and the buyer. As a practical example: the seller transfers the apartment or house only if the agreed sale price is received. The buyer in the other hand will only give up the money if he receives ownership. In the event of taking a bank loan, the part of the own contribution must be paid into the account of the notary before the transaction, the remaining part will be transferred by the bank. If the property is purchased entirely from its own funds, the entire sales price must be transferred to the respective account in advance to use the notary’s deposit.<\/p>\n
It might become difficult to use a notary’s deposit if some of the money comes from a bank outside the European Union. In the US, for example, there are several banks with regional scopes that do not make international payments. In such situation, the American property buyer may use payment institutions to transfer money to the account of an Estonian notary’ deposit. Sometimes, while using a service like this, that the money will be received, but from the account statement you do not see a word about from whom the payment was made and to who, as well as who initiated it, etc. While the notary may presume that the money has been transferred in the buyer\u2019s interest who has come to the notary, but there is little use in presuming while proving the notarial transaction and the transfer of the money. If the circumstances of the received payment are unclear, the notary may be obliged to inform the Financial Intelligence Unit, the notary may wish to contact both the bank and the Financial Supervision Authority to clarify the facts or seek advice. All this may take time for weeks or even months, and the real estate deal will be delayed. It is possible that several inquiries will reveal the fact that the most secure and correct way is to transfer the payment back to the original account. In that kind of situation, the seller may not want to wait and might decide in favor of another buyer. In addition, the originator of the payment must consider the additional costs of the repayment of the sum of money: each link in the chain also charges its own commission when the money is returned and for such transfers the commissions are not small. The worst-case scenario, they may amount to hundreds of euros.<\/p>\n
What can I do to avoid such misunderstandings? The circumstances of the payment would be much clearer if early on, the foreign buyer of the immovable opens an account in a bank that operates in Estonia and transfers the money to that personal account first. If the transfer to the notary’s deposit account is made from a bank account located in Estonia, the identity of the person who is making the transfer (remitter) is automatically visible. The information referring to the transaction must also be indicated in the explanation when paying to the notary’s deposit account. To do this, it is worth asking the notary for information in advance.<\/p>\n
When purchasing lower value property, the involvement of an attorney to advice for a notarized transaction may not justify itself economically. However, the higher the value of the property, the greater the financial and other risks for the parties. Therefore, it is certainly worth using the help of an experienced attorney while purchasing a higher value property (e.g., a house).<\/p>\n