Horizon

Luštica Bay contracts are standardised and not negotiable, so the useful work is understanding them before you sign. Six things buyers are regularly surprised by:

• The apartment is freehold, the land is not. Owners hold a common usage right over resort land running to 10 December 2103, the expiry of the development agreement with the Government of Montenegro. A further 90 year term is expected after that and is negotiated by the Town Association on owners' behalf.
• You become the owner when the price is paid in full, not at handover. If your payment plan runs past completion, you take the apartment on a contractual right of use and are registered in the cadastre only after the final instalment.
• Instalments run on fixed dates, not on construction milestones. The first quarterly invoice is issued three months after the contract is notarised. Each invoice is payable within 10 business days and counts as paid when the money is credited to the developer's account.
• The developer may mortgage the apartment until you have paid in full, to finance construction, and must release the charge within 15 business days of your final payment. A bank charge showing on the title during construction is usually this.
• You cannot resell before you are registered. Assigning the contract or advertising the unit before registration is prohibited and carries a contractual penalty, and the developer holds a pre-emption right over any later resale.
• Late payment is expensive. Default interest and termination rights apply, but the rate and the number of days you get before termination are set in this project's own contract rather than being the same across the resort. Ask me for the figures on the building you are looking at before you sign.