Main Real Estate Laws

Slovenia is a civil law system. The main law that governs real estate law in Slovenia is the Law on property Code. Additionally, there are other important laws such as Agricultural Land Act, Housing Act, Land Register Act, Real Estate Cadastre Act, Protection of Buyers of Apartments and Single Occupancy Buildings Act, Real Estate Agencies Act, Act Establishing Commonhold Tenure in Certain Buildings and Determining Commonhold Land, to name a few. Even so, the Supreme court of the Republic of Slovenia and decisions of higher courts are used in practice to help interpret the statutory law, even if they do not enjoy the status of a formal legal source.

Ownership right and foreign persons

Regarding the relevancy of international laws to real estate – with disregard to the EU legislation enacted locally in EU countries – foreign citizens (physical persons) and foreign legal entities may acquire ownership rights to Real Estate under specific conditions provided by law or an international treaty ratified by the National Assembly. In this regard bilateral and other international agreements are relevant.

The aforementioned restriction is set by the Constitution of the Republic of Slovenia. First fact to consider is the existence of an international agreement concluded with the country of origin of the physical person or legal entity. The principle of reciprocity is basic principle for obtaining the ownership of Real Estate in Slovenia by a foreigner. Foreign citizens and legal entities established abroad can be classified into three groups considering the possibility of acquiring ownership rights to real estates:

• Those who do not need a reciprocity decision to acquire ownership of a real estate in Slovenia (i.g. EU citizens, etc.);
• Those who need a positive reciprocity decision to acquire ownership of a real estate in Slovenia (nationals and legal persons of candidate countries for EU membership); and
• Those who cannot acquire ownership of real estate or can acquire it only by inheritance (People's Republic of China, etc.).

Rights over Land

When discussing the types of rights over land that are recognised in Slovenian law system, we must mention the five different types of rights in rem that are divided into two groups:

(i) The right on your (own) land

This group consists only of the ownership right (lastninska pravica); if there are two or more legal entities that jointly own a piece of land, it can either be a co-ownership (solastnina), where the percentages of ownership are fixed, or a common property (skupna lastnina), where the percentages are not fixed.

(ii) The right is on a land owned by someone else

This group has four (4) rights that are recognized by the Slovenian law: building right (stavbna pravica); lien (zastavna pravica); encumbrance (pravica stvarnega bremena); and lastly, servitude/easement (služnost). There are two types of servitude: predial servitude (stvarna služnost); and personal servitude (osebna služnost). Until November 2013 the Law on Property Code enabled land (property) debt (zemljiški dolg) and it may still exist as a right on a land owned by another person not the one holding the land debt. However, from November 2013 it is not possible to create land debt anymore.

Registration of these rights in the Land Register is a requirement for their existence. Through registration these rights acquire an erga omnes effect. Anyone who acts honestly in legal transactions and relies on the information about rights entered in the Land Register should not suffer adverse consequences as a result.

Slovenian law enables for some contractually agreed rights between the contract parties to be registered in the Land Register. As an example, these rights are: right of rent (right to lease), the right of prohibition of encumbrance and alienation, the pre-emption right etc. These obligation rights may be registered into the Land Register under specific conditions foreseen by law. By entering them into the Land Register an erga omnes effect is created.

What is Real Estate or Immovable Property

Anything that is permanently merged by purpose or permanently on, above or beneath the land is an integral part of the property/land, meaning the ownership of the land includes all the components on it (including buildings).

Nonetheless, there are two exceptions to this rule: building right (stavbna pravica) and condominium (etažna lastnina). Building right is the right to own a building above or beneath a foreign land. It can be constituted by a contract between the parties, transferred to a third party and may be established for a fixed or indefinite period. Registration in the Land register is prerequisite for its existence. The condominium is the right to own part of the building and co-own the common parts of the building and its common devices (elevators, building heating equipment, etc.).

The Land Register and Disposal of Real Estate

The Land Register is a public register used to record and make public information about rights in Real Estate (immovable property) and legal facts relating to Real Estate. The Land Register is kept by a court that administers it by deciding on entries, making entries in the Land Register and keeping a collection of documents. Entries are public. Entries of rights and legal facts in the Land Register shall take effect from the moment when the Land Registry Court has received the proposal for entry, or when the Land Registry Court has received the document on the basis of which it decides on the entry ex officio. The rights in rem in Real Estate are acquired or terminated at the time when the entry in the Land Register takes effect, unless otherwise provided by law.

For the right in Real Estate to be registered (entered) in the Land Register a Land Registry Permission is required. Land Registry Permission is an express, unconditional declaration by the person whose right is transferred, modified, encumbered or terminated that he or she authorises the entry in the Land Register. The signature on the land registration permit must be authenticated by a public notary. The person authorising the entry in the Land Register, must be indicated by the data with which he or she is entered in the Land Register.

For detailed legal advice tailored to your specific circumstances, our law firm's expertise in Real Estate Law is at your disposal. Please contact us via our website www.neffat.si or send an enquiry to info@neffat.si. We are also available by phone: +386 1 300 00 70. For more information on Law Firm Neffat and Partners please visit www.neffat.si/en