Real estate transactions for which the purchase price is agreed in EURO’s
Purchase price in EUR, costs in ANG
Property transaction fees should be paid in ANG. These include land registry fees, transfer tax, sales tax, stamp and registration fees and notary fees. Because the EUR-ANG exchange rate is not fixed and varies daily, this results in varying amounts of costs for buyers without further arrangements if the purchase price is agreed upon in EUR. Until now, the notary has stuck to the EUR-ANG exchange rate as it was on the day of passing for the final amount of fees. This rate is almost always different from the rate used when the preliminary bill of settlement was prepared, resulting in a difference in cost at the time of passing. As a result, it regularly happened that the notary could not pass on the appointed day because not enough money had been transferred to cover all the costs. After all, Client never knew in advance how much the cost would be on the day of passing. To avoid this in the future, the notary has adopted the following policy for EUR transactions.
Options
Clients involved in EUR transactions have two options:
Option 1 – for calculating the cost in ANG, the exchange rate on the day of signing the purchase agreement is maintained through an addendum;
OR
Option 2 – to calculate the cost in ANG, the rate of the day of passing is maintained.
Option 1.
The moment the notary receives a purchase agreement where the purchase price has been agreed upon in EUR, the notary will contact the broker involved to verify which option the parties choose. It is, of course, our preference to receive clients’ choice already when the file is offered. If the broker hereby indicates that the parties choose option 1. the notary prepares the addendum prepared for this purpose (download UK version here) containing the exchange rate on the day of the formation of the purchase agreement. In doing so, the notary will attach the CBCS price statement of that day to the addendum. From the broker we would then like to receive the addendum signed by seller and buyer.
Option 2.
If clients choose option 2, it involves additional work for the notary and uncertainty for the client. Fees should be charged several times, namely at the time the note is prepared, any changes in between, and at the time the deed is executed. For each new EUR transaction in which option 2 is chosen, we will charge the number of hours spent by us, with a minimum of ANG 750.00. For the client, this option carries the risk that the notary may not have enough money on the day of passing to meet all the costs due to the possible exchange rate differences that may arise. The shortfall will then have to be added by client so that the notary can still pass. In the experience of notary experience, this often takes several days and results in higher bank fees for client. In no situation will the notary advance this shortfall, no matter how large or small. These consequences should be clear to the parties prior to the transaction.
Preferred option 1.
The notary’s preference is for option 1., so that the costs are clear to everyone from the start and do not change on the day of passing, resulting in “unexpected” additional payments by the client.
Source: New policy EUR real estate transactions – Notary Office Moerdijk 27.10.2023
