Limitations to Foreigners

1. Are there in your national system any limitations to foreigner citizens or foreign companies/companies controlled by foreign citizens regarding the acquisition of immovable properties? If yes:

1.1. Which legal regulations regulate in your country the prohibitions or limitations for foreigners’ acquisitions in case of transfer of property? Please specify the legal regulation and/or the range of the regulation that contains the prohibition.

Act No. 140/2014 Coll. on the acquisition of ownership of agricultural land and on amending and supplementing certain.

1.2. What do these limitations consist of?

The issue of acquisition of agricultural land by foreigners is regulated by Act No. 140/2014 Coll. on the Acquisition of Ownership of Agricultural Land and on Amendments and Additions to Certain Acts, as amended (hereinafter referred to as «Act No. 140/2014 Coll.»).

Pursuant to Section 7(1) of Act No. 140/2014 Coll. : «The State, a citizen of the State, a natural person residing or a legal person established in a State whose legal system does not allow citizens of the Slovak Republic, natural persons residing in the Slovak Republic or legal persons established in the Slovak Republic to acquire ownership of agricultural land may not acquire ownership of agricultural land; this shall not apply to inheritance of agricultural land».

Pursuant to Section 7(2) of the above-mentioned Act, «The provisions of paragraph 1 shall not apply to the States of the European Union, the European Economic Area, Switzerland or to States for which it results from an international treaty by which the Slovak Republic is bound; the provision shall not apply to their nationals, nor to natural persons residing or legal persons established in these States».

As is clear from the above provisions of Act No. 140/2014 Coll., in order for a specific natural person to be subject to the prohibition on the acquisition of so-called agricultural land on the territory of the Slovak Republic, the condition that the legal order of the state of which he/she is a citizen or has his/her residence prevents citizens of the Slovak Republic, natural persons residing in the Slovak Republic and legal persons with their registered office in the Slovak Republic from acquiring ownership of agricultural land must be fulfilled. This shall not apply if it concerns inheritance or if it results from an international treaty, and the prohibition shall not apply to the States of the European Union, the European Economic Area and Switzerland, to their nationals, nor to natural persons residing or legal persons established in those States.

1.3. Do these limitations apply to any foreign citizen, regardless their nationality, or only to non-EU Members national citizens?

The restrictions do not apply to all foreigners, the above restriction does not apply to states covered by an international treaty, nor does it apply to states of the European Union, the European Economic Area and Switzerland, to their nationals, nor to natural persons residing or legal persons established in these states.

The prohibition does not apply if citizens of the state reside in a state not covered by this prohibition, or if legal persons have their registered office in these countries.

There is principle of reciprocity.

1.4. Do these limitations have?

• A defensive/protective purpose
• An economic purpose
• «Both economic and defensive/protective purposes»
• Other purposes (please specify)

2. To which kind of land registry unit do these limitations apply? (Example: only land plots, only rural areas, only foreign borders, dwellings and homes, other buildings?

Only land plots.

3. To which kind of transfers or burdens do these limitations apply? (Example: to every transfer, non-free transfers, differently in case of inheritance than in case of purchase, mortgages in favor of foreigners….)

The limitations apply differently in case of inheritance than in case of purchase (look at 1b).

4. Apart from the previous limitation to acquisition of property by foreigners, are there any other measures at your country relevant for this topic? (Example: pre-emption rights in case of purchase un favor of a foreigner, social or residential measures bases on nationality and non in residential permits….)

Pursuant to § 19a of Act No. 202/1995 Coll. Foreign Exchange Act, a foreigner may acquire the right of ownership to real estate in the domestic territory, except for real estate, the acquisition of which is restricted by special regulations.19)

Special regulations are e.g. Act No. 49/2002 Coll. on the Protection of the Monument Fund, as amended, Act No. 543/2002 Coll. on the Protection of Nature and Landscape, as amended, Act No. 220/2004 Coll. on the Protection and Use of Agricultural Land and on the Amendment of Act No. 245/2003 Coll. on the Protection and Use of Agricultural Land, as amended, and Act No. 326/2005 Coll. on forests as amended, Act No. 140/2014 Coll. on the acquisition of ownership of agricultural land and on the amendment and supplementation of certain acts.

It follows from the above-quoted legal provisions that the state, represented by the relevant ministry (e.g. the Ministry of Culture in the case of protection of immovable national cultural monuments, the Ministry of the Environment in the case of pre-emption rights in the case of nature reserves), is obliged to declare, when transferring immovable property (of which it is a co-owner), whether or not it claims the pre-emption right. If the State does not claim the pre-emption right, the opinion must be submitted as an annex to the application for registration.

The Vienna Convention stipulates that a foreign state may only purchase real estate in another state for the purpose of consular and diplomatic relations. However, this is very difficult to trace in practice because the official deciding on the application for registration has no right to ask for reasons why the state is buying the property, or it is difficult to see how the state can prove that the property is for the purpose of diplomatic and consular relations.

A foreign state includes European Union states, embassies, and ministries, but not entities, such as Slovak legal entities, under the control of those entities. The notification obligation does not apply in the case of acquisition of ownership by inheritance and does not justify the suspension of the above-mentioned proceedings.

In the future, it was planned to amend the Foreign Exchange Act, according to which any proposal, the subject of which would be the acquisition of ownership by a foreign state, would be subject to the approval of the Ministry of Foreign Affairs of the Slovak Republic.

5. To what extent the land registrars’ controls in a deed of transfer the prohibitions imposed to foreigners to acquire land and buildings in your country?

Act No. 140/2014 Coll. on the acquisition of ownership of agricultural land and on amending and supplementing certain acts is a framework act that establishes reciprocal criteria for the acquisition of agricultural land by foreigners.

The principle of reciprocity applies to the acquisition of agricultural land, i.e. a foreigner may acquire agricultural land in the Slovak Republic only if a citizen of the Slovak Republic may acquire agricultural land in the foreigner’s country. As regards buildings and forest land, there are no restrictions on acquisition by foreigners.

5.1. Do you only check if the transfer administrative authorization requirement is met, or do you also confirm that the authorization is valid? For example, do you consider property type, like rural or forestry classification, which might limit foreign transfers? Or do you verify the percentage of foreign land ownership in a specific area, especially if there are restrictions on the number of buyers or land size?

No administrative authorization is required for the transfer in the Slovak Republic.

There are no restrictions on the number of buyers, the size of the land, and the percentage of foreign ownership of the land in a particular area is not verified.

5.2. What would happen if an authorization were needed, and it does not come with the title submitted for registration?

The proceedings on the application for registration would be suspended and the party would be requested to remedy the deficiencies. However, since the above principle does not apply in the Slovak Republic, this question is irrelevant from the point of view of the Slovak Republic.

5.3. What would happen in case a deed of inheritance in favor of a foreigner transfers property over land or buildings subject to limitations for foreigners’ acquisitions in your country?

If a deed of inheritance in favour of a foreigner acquiring agricultural land in violation of the legislation of the Slovak Republic was delivered for registration, this deed would be registered in the Land Register. In this case, the administrative authority in the cadastre department is the registration authority, which examines only the formalities of the public deed (also of the foreign state). In accordance with the Cadastral Law, the administrative authority in the cadastral section would signal the violation of the legal regulation to the Ministry of Justice of the Slovak Republic for the purpose of further resolution.

5.4. If the states have preemption right in case of transfer, would you reject the registration if no notification to the state to enhanced it right is done?

Violation of the statutory pre-emption right causes only relative invalidity of the legal act in the Slovak Republic, which the cadastral authority is not obliged to take into account ex officio. It shall take that fact into account only after the party to the proceedings has invoked the relative invalidity of the legal act during the registration procedure.

After the end of the deposit procedure, the right to invoke the relative nullity remains with the court. This shall not apply if a specific legal provision imposes an obligation on the administrative authority to examine the submission of a specific instrument.

6. Do you expect any legal modifications on this issue?

Repeal of Act No 140/2014 Coll. is expected. and its replacement by a new legal regulation. The Act is under the responsibility of the Ministry of Agriculture and Rural Development of the Slovak Republic.