The developer is late handing over the apartment
A buyer's rights when the developer doesn't deliver the apartment by the agreed deadline.
What to do
When the developer fails to deliver the apartment by the agreed deadline, the first step is to carefully review the sale contract itself - specifically, whether the handover deadline is formulated as an essential term of the deal, and whether there is a provision on a contractual penalty for each day or month of delay. These two questions largely determine which next step makes the most sense. If the deadline was not an essential term of the contract - which in practice is common with apartments under construction - the Law on Contracts and Torts (Zakon o obligacionim odnosima) (Art. 124-126) provides that the buyer must first give the developer an additional, reasonable period for performance, and only if the obligation is still not performed within that period can the contract be terminated for non-performance. An exception exists if it is already clear from the developer's conduct that they will not perform the obligation even within the additional period - in that case, further waiting is not a legal requirement.
Alongside the deadline question, it is worth checking whether the building has an issued occupancy permit. Without it, handover in the full sense and subsequent registration of the apartment are generally not possible, which changes the assessment of how long the delay can realistically continue and whether it makes more sense to insist on performance or to think about termination. A practical next step is a written warning to the developer - clearly stating the deadline, invoking any contractual penalty, and, if applicable, granting the additional period for performance. If the developer still does not act, a demand for performance with collection of the contractual penalty, or termination of the contract with a refund of the money paid plus default interest, are both available.
When to contact a lawyer
It is worth seeking legal help as soon as it becomes clear the deadline will not be met, before sending any formal warning letter - because the content of that warning (whether performance is demanded, whether an additional period is granted, whether termination is announced) affects which rights remain open later. A lawyer can assess whether the handover deadline in your contract is an essential term of the deal, whether the contractual-penalty provision is worded so that it is actually collectible, and whether the current state of construction and documentation (in particular the occupancy permit) justifies further waiting or termination.
Consultation is especially useful when several buyers in the same building are affected by the same delay, when the developer offers a partial or informal solution (e.g., moving in without a formal handover or without an occupancy permit), or when there is a suspicion that the developer has broader financial problems that could lead to a longer stoppage or a dispute involving multiple creditors.
Sources
What to do
- Check the exact handover date and conditions in the contract, including whether a contractual penalty is provided for each day or month of delay, and whether, when taking possession of the apartment (if that has partly happened), you expressly reserved the right to that penalty.
- Check whether the building even has an issued occupancy permit - without it, handover and later registration of the apartment are not legally possible in the usual way, which also changes the assessment of how long the delay can realistically continue.
- Send the developer a written warning (registered mail, with proof of receipt) demanding performance and, if the contract provides for it, payment of the contractual penalty already accrued for the delay.
- If the handover deadline was not an essential term of the contract, give the developer an additional, reasonable period for performance in the warning letter - this is generally a precondition for later lawfully terminating the contract for non-performance.
- If the developer still fails to perform within the additional period, consider terminating the contract with a demand for the return of all amounts paid plus default interest, or continuing to hold to the contract while pursuing performance and collecting the contractual penalty.
- If multiple buyers in the same building are affected by the same delay, consider exchanging information with them - shared evidence (letters, statements by the developer, the state of the construction site) can be useful in each individual proceeding.
What it costs
The cost of out-of-court resolution (warning letter, negotiation) is significantly lower than litigation. In a lawsuit, the court fee and any expert-witness costs (e.g., a construction expert, if the degree of completion of the works is disputed) are set according to the value of the dispute, which in real estate disputes is usually not a negligible amount.
Basis for the attorney fee: Tariff item 81 of the Tariff on Attorneys' Fees and Expense Reimbursement (Tarifa o nagradama i naknadama troškova za rad advokata) for a warning letter to the developer (50% of the fee for the claim); item 13 for a claim for performance, the contractual penalty or termination of the contract (fee based on the value of the dispute) and item 15 for representation at a hearing.
FAQ
Do I automatically get the right to terminate the contract the moment the developer is one day late?
Not necessarily. If the handover deadline in the contract is not set as an essential term of the deal, the law requires that the developer first be given an additional, reasonable period for performance before the contract can be terminated for non-performance. An exception exists when it is already obvious from the developer's conduct that they will not perform even within that additional period.
What if the contract doesn't provide for a contractual penalty for delay at all?
The absence of a contractual penalty does not rule out other forms of protection - the buyer can still seek performance, and, in case of termination of the contract, the return of the money paid plus statutory default interest, as well as compensation for actual damage if it occurred and can be proven.
Can I seek both performance of the contract and the contractual penalty at the same time?
That depends on the wording of the contract and on whether you expressly reserved the right to the penalty. For a contractual penalty for delay, the usual rule is that the creditor keeps the right to both performance and the penalty if they communicated that right to the debtor without delay; the details depend on the specific provisions of the contract.
The building doesn't have an occupancy permit - does that change anything?
Yes, significantly. Without an occupancy permit, handover in the full legal sense and subsequent registration of the apartment in the cadastre generally are not possible, which affects the assessment of a realistic performance deadline and whether it makes sense to insist on performance or better to consider termination.