Things to consider when buying a plot of land

The purchase of a plot of land is always a real property transaction, which requires a specific form and is not as simple a legal transaction as the purchase of movable property. When buying a plot of land either from a municipality or from a private seller, there are many things to consider, such as the characteristics of the land and the possibilities for building on it. It is a good idea to have a professional to help you when buying a plot of land.

Can you build on the plot? 

When buying a plot with building plans in mind, you should first ensure that it is permitted to build on the plot. A plot covered by a zoning plan is a safe choice in the sense that you can always get a building permit for a building that complies with the regulations. However, check the zoning regulations before confirming the transaction. The zoning regulations may specify the orientation and number of storeys of a building, sometimes even aspects of appearance such as the colour of the exterior walls. 

In sparsely populated areas, you need to be particularly careful when buying a plot of land. It is a good idea to contact the local building inspector to make sure that you can get building permit for the plot. If a special permit is required to build on the plot, it is a good idea to apply for it before the transaction is confirmed.

Ground condition 

A ground survey is particularly recommended when buying a plot of land in a sparsely populated area. However, it is always a good idea to check the condition of the ground when buying a plot. The ground survey will reveal whether the ground contains substances harmful to human habitation, and the bearing capacity of the ground. 

The ground can cause unexpected costs during the construction phase. Clayey soils may require piling and rocky ground may call for blasting. Finding out about the quality of the ground beforehand will avoid unexpected costs. 

What is actually sold?

In a plot transaction, it is important that the object of the transaction is clear to both the seller and the buyer. A plot of land can be one with registered ownership, subdivided real property unit or a so-called unseparated parcel. An unseparated parcel is a part of a larger parcel of land of the seller, marked in the terrain and map. 

When buying an unseparated parcel, you must find out in advance whether the residual property unit has any debts or whether it is pledged as collateral. If there is debt, the deed of sale should include a clear clause in which the seller states that he is selling a part of the parcel free and clear of any debt encumbrances and undertakes to cancel, at his own expense, any debt encumbrances on the parcel he is selling. 

When buying a plot of land from a private seller, it is also good to take into account the municipality’s right of first refusal. According to the law, the municipality has the right to take the place of the buyer and to redeem the property for sale if the object of the sale is important for the municipality’s urban development or recreational or conservation needs. However, the right of first refusal only applies to large land transactions and rarely comes into play in plot purchases. 

Location of the plot 

The location of the plot is important from the aspects of both construction work and housing comfort. When choosing a plot, it is important to consider not only the building conditions, but also the neighbourhood and protection from the wind. For example, a southern slope is an excellent location for a plot, as it is sheltered and bright. Ask your neighbours about the area and any building restrictions or considerations! 

It is also good to take into account accessibility and transport routes to the plot, including the availability of public transport. The location of services, schools, kindergartens and your workplace in relation to the plot is important. You should also find out from the local water company about the availability of domestic water and the discharge of waste water. 

You should also find out about the municipality’s future construction projects and plans in the area. How will these affect housing comfort and the value of the plot in the future? Information on future projects can always be found on the website of the municipality. 

Use of public purchase witness 

The purchase of a plot of land, like any real property transaction, is made in writing and the deed is signed simultaneously by both parties in the presence of a public purchase witness. You can draw up the deed yourself, but this requires certain adherence to a proper form, so it is best to leave it to a professional. 

The role of the public purchase witness also includes checking the identity of the seller and buyer and their validity as parties to the transaction. In addition, the public purchase witness checks that the deed meets the requirements of the Code of Real Estate (the law governing real property transactions). The public purchase witness also reports the transaction to the authorities for registration and statistics purposes.

Whom to contact before buying a plot?

The seller of a plot of land should provide the buyer with basic information about the property without being asked. However, the information can also be obtained or verified from public authorities. To request the information, you need the identification data on the property, i.e. the municipality, village and the name and registration number of the real property unit. Please contact the following: 

  • District court and land survey office 
    (certificate of title, abstract of the register of mortgages, owner of the real property unit, mortgages and tenancy rights) 
  • Land survey office and/or municipal real estate office 
    (cadastral certificate extract, cadastral index map, property boundaries) 
  • Municipal real estate office and building inspector 
    (zoning map copies, zoning regulations, plots, roads, etc. in the area, building rights, building volumes, building distances, etc.) 

Using a real estate agent is recommended when buying a plot of land, as the agent will provide the buyer with all the information and projects concerning land use planning and the surroundings!