Law on Amendments to the Law on Public Notaries

Law on Amendments to the Law on Public Notary as a Result of Agreement between the Ministry of Justice of the Government of the Republic of Serbia and the Bar Association of Serbia dated 08.01.2015 and its effects on users of financial services

It seems that the Agreement of the Ministry of Justice of the Government of the Republic of Serbia and the Bar Association of Serbia dated 08.01.2015. , by harmonized amendments to the Law on Public Notaries (“RS Official Gazette”, No. 31/2011, 85/2012, 19/2013, 55/2014 – other law, 93/2014 – other law, 121/2014 and 6 / 2015), (hereinafter referred to as “the Law”) impair or impair the rights of third parties who did not participate in the drafting of this Agreement.

The rights of third parties, in this case banks, and in particular their clients, could be jeopardized by Articles 82. and 93. of the Law, which returns the pledge statement as a credible document to a notary public record, resulting in a 60% increase in formalization of this statement. Namely, Article 82. of the Law on Public Notaries, by way of amendment, stipulates, in paragraph 1., that in the form of a notary public record are made:

• contract on the disposal of real estate of business-incompetent persons;
• legal maintenance agreement, in accordance with law;
• mortgage contract and pledge statement if they contain the explicit statement of the obliged person that, on the basis of the mortgage contract, or pledge statement, the enforcement of the obligation may be carried out directly upon maturity of the obligation, either judicially or out of court.

Paragraph 3. of the same Article further stipulates that legal transactions and statements referred to in paragraph 1. of this Article which are not made in the form of notarial record do not have legal effect.

With the latest amendments to the Law, Article 93 provides that a notary public certifies (solemnizes) a private document when it is specified by law and that, in the form of notarized (solemnized) documents, it concludes in particular:

• real estate contract;
• mortgage contract and pledge statement if they do not contain the explicit statement of the obliged person that, by virtue of the mortgage agreement, or pledge statement, the enforcement of the obligation may be carried out directly upon maturity of the obligation;
• a contract establishing real and personal servants.

Further, reminders for the sake of the Law on Amendments to this Law which entered into force on 06.11.2014. In addition, the new paragraph 5. of Article 85. of the Law stipulates that the effect of a notary public record, as an executive document, also has a private document solemnized by a notary public in accordance with that Law, if it fulfills the conditions laid down in paragraph 1 of that Article. This provision practically means that the pledge declaration, from the date of entry into force of the amendments to the Law of November 2014., certifies the signature of its provider with a notary public, thus, by the date of entry into force of the cited amendments to the Law, the prescribed form of notary public record only and with such a formalized (solemnized) statement, the mortgage may be entered in the public books kept by the RGA and enforced collection either judicial or extrajudicial, as with a credible document, regardless of whether it contains an explicit statement of the obliged person to make a mortgage contract, or pledge statements, may, in order to accomplish the act of debt, immediately enforce enforcement of the obligation, whether judicial or extrajudicial.

The effect of the agreement reached by the Ministry of Justice and lawyers would also be more complete from the point of view of protecting the interests of the mortgagee and their creditors that the most recent Law on Amendments to the Law on Notaries is limited in Article 82., paragraph 1., item 4) to the following text: “4 ) the mortgage agreement and the lien of the persons referred to in items 1. and 2. of this paragraph. “- which would keep the notary’s record as a more difficult form of certification for these contracts and statements made by persons for whom the legislator is rightly more concerned and for which it provides fuller protection as and that paragraph 2., paragraph 2. of Article 93. reads as follows: “2) a mortgage agreement and a lien the drafting of which is not subject to Article 82”.