Right of first refusal in Bosnia: co-owners and neighbours

A right of first refusal (pravo preče kupovine) means a particular person may buy the property before you, at the same price and on the same terms the seller has offered you. In Bosnia and Herzegovina it usually belongs to co-owners: in the Federation of BiH (FBiH) and Brčko District co-owners of real estate have it by law, while in Republika Srpska (RS) only co-owners of a flat or other unit in condominium ownership and co-owners of a family house have it. In the rules we reviewed, a neighbour has no general priority when a house or flat is sold; the neighbour question comes up mainly with agricultural land.

For you as a buyer, one point matters most: if the seller bypasses a co-owner who holds this right, that co-owner can go to court and take your place in the contract. That is why it is checked before signing, not afterwards.

This is general information, not legal advice. A notary or lawyer confirms what applies in your specific case, including any recent changes to the law.

When the right of first refusal comes into play

It does not matter when a single owner sells the whole property, or when all co-owners sell the whole property together to the same buyer. It becomes relevant when:

• one co-owner sells only their share (for example 1/2 of a flat or 1/3 of a house) to someone who is not a co-owner
• a right of first refusal has been agreed by contract and entered in the land register
• agricultural land is being sold, where separate rules apply

The most common real-life case is inherited property with several heirs, where one wants to sell their share and another does not. Our guide on buying property from heirs in Bosnia covers that situation in more detail.

Co-owners: FBiH, RS and Brčko District differ

The rules in the two entities are opposite, so the first question is where the property is, not where you or the seller live.

Federation of BiH

The Law on Property Rights of FBiH (Zakon o stvarnim pravima FBiH, Articles 27 and 91) applies.

• A co-owner may sell their share without the other co-owners' consent, but when they sell a share of real estate, the other co-owners have a right of first refusal unless the law says otherwise.
• The seller must send the offer by registered post.
• For a flat, business premises or another separate unit, the offer goes to the co-owners of that unit. If the building has not been divided into separate units, it goes to the co-owners of the building.
• The offer must be in writing and include the land register or cadastral details.
• Unless they agree otherwise, co-owners exercise the right in proportion to their shares.
• Exception: the right does not exist if the land is recorded in the cadastre or land register as an access road.

If the seller made no proper offer, or sold to a third party on better terms than those offered, a co-owner can sue to have the contract annulled and the share transferred to them on the same terms. The deadline to sue is 30 days from learning of the sale and its terms, and no later than one year from the date of the contract.

Ask the notary to confirm the exact time a co-owner has to reply to the offer before the seller sends it.

Republika Srpska

The Law on Property Rights of Republika Srpska (Articles 27 and 90) applies, and the basic rule is the reverse.

• When a co-owner sells their share, the other co-owners generally have no right of first refusal.
• Exception 1: co-owners of a separate unit in condominium ownership (etažna svojina, the system where each flat in a building is a separately owned unit), for example two people who jointly own the same flat. The offer goes to the other co-owners of that unit, or to the co-owners of the building if it has not been divided.
• Exception 2: co-owners of a family house (porodična zgrada) have the same right.
• Co-owners have 60 days from receiving the offer to accept it in writing. After that the seller may sell to someone else, but not at a lower price or on more favourable terms.
• Unless agreed otherwise, the right is shared in proportion to the co-owners' shares.

If the offer was not properly made, or the sale went ahead on better terms, a co-owner can ask the court to declare the contract invalid and buy the share on the same terms. It is not clear-cut whether there is a time limit for this claim, so check it with a lawyer.

When co-owned property is sold in RS, the notary should warn the parties that this right exists. Be aware that the land register does not always show everything needed for this check; some information sits only in the collection of deeds (zbirka isprava), the file of documents behind each land register entry.

Brčko District

Under the Law on Ownership and Other Property Rights of Brčko District, when a co-owner sells their share of real estate, the other co-owners have a right of first refusal. Confirm the offer procedure, the reply deadline and the deadline to sue with a notary for your case.

A separate rule covers the building right (pravo građenja, the right to own a building on someone else's land): if the building right is sold, the landowner has a right of first refusal; if the land is sold, the holder of the building right has one.

Republika Srpska is not the Republic of Serbia

Online you will find many articles about Serbia's Real Estate Transfer Act, with 15-day reply periods and neighbour priority on farmland. That law does not apply in Bosnia and Herzegovina. Nor does the old law from the former Socialist Republic of BiH, under which every co-owner of any property had a right of first refusal.

Does a neighbour have priority?

Flats and houses: in the rules we reviewed, a neighbour has no general right of first refusal in any of the three areas. This includes owners of other flats in the same building: in FBiH the offer goes to co-owners of the same flat, and in RS to co-owners of that unit, not to the people across the landing. If the building has not been divided into separate units, the position is different, so it is worth checking whether the flat is properly registered as its own unit.

Agricultural land in FBiH: under the FBiH Agricultural Land Act the offer goes through the municipality. The municipal body posts it on its notice board, issues a public call and runs the sale at the owner's expense. The priority order starts like this:

1. co-owner
2. close family (spouse, children, parents, siblings)
3. a family farm in the same cadastral municipality (katastarska opština, the local land survey district)
4. further categories

Whether a neighbour appears on this list, and where, is something to check with the municipality. A sale that bypasses the municipal procedure risks being void. For agricultural land in RS and Brčko District, check the rules with the municipality or the competent District authority before agreeing a price.

A right of first refusal agreed by contract

The right can also be created by contract, not only by law. In FBiH it can be entered in the land register, as can a buy-back right. So when you read the land register extract (ZK izvadak), do not look only at who owns the property and whether there is a mortgage; also check whether a right of first refusal is registered in someone else's favour. Our guide on the land registry extract explains how to read it.

What this means for you as a buyer

The risk is not that you pay more. The risk is that you buy, pay and move in, and then a co-owner sues and takes your place on the same terms. Getting your money and costs back is then a matter between you and the seller, and a lawyer advises you on it.

There is also a practical risk: if you buy only part of a flat or house, you become co-owner with someone you do not know and who did not want to sell. Using the property, letting it or selling it later will then depend on them too.

Steps before you sign

1. Get a fresh land register extract and check whether the seller is the sole owner or a co-owner, and of what share.
2. If they are a co-owner, establish where the property is (FBiH, RS or Brčko District) and what it is: a flat in condominium ownership, a family house, land or something else.
3. Check whether a contractual right of first refusal is registered.
4. If the co-owners have the right, ask for proof the offer was properly made: a copy of the written offer with the same price and terms as yours, and the registered post receipt.
5. The safest options are a written waiver from the co-owners with a certified signature, or all co-owners selling the whole property together.
6. Make sure the price and terms in your contract are not more favourable than those offered to the co-owner. If you later agreed a lower price, the offer should be made again.
7. Do not pay a deposit (kapara) until this is resolved, or until the pre-contract clearly says what happens if a co-owner uses the right. See pre-contract and deposit.
8. Ask the notary to state in the contract how the right of first refusal was dealt with.

If you are selling a co-owned share

• Send a written offer to each co-owner by registered post, with the price, payment terms and land register or cadastral details.
• Keep a copy of the offer and the delivery receipt.
• Wait for the reply period to end (60 days in RS; in FBiH and Brčko District confirm it with a notary).
• Do not sell to a third party more cheaply or on better terms than you offered.

A properly sent offer protects you as well: a buyer who sees the evidence decides faster and has no reason to ask for a discount because of the risk.

Common mistakes

• Relying on articles from Serbia or on the old SR BiH law.
• Assuming a co-owner in RS never has priority, when they do for condominium units and family houses.
• A verbal agreement with a co-owner ("my brother is fine with it") without a written statement.
• Offering the share to the co-owner at one price and signing with the buyer at a lower one.
• Buying agricultural land in FBiH without the municipal procedure.
• Reading only the ownership section of the extract and not the burdens and registered rights.

Example

Two heirs, a brother and sister, each own 1/2 of a 54 m² two-room flat in Čengić Vila, Sarajevo. A similar flat in DMI's listings is currently advertised at 309,000 KM. The brother offers you his half for 150,000 KM; his sister does not want to sell.

The flat is in FBiH, so the sister has a right of first refusal. The brother must send her a written offer by registered post at 150,000 KM on the same terms he offers you. If he skips this and you buy, she can sue within 30 days of learning of the sale, and no later than one year from the contract, to have the half transferred to her on the same terms.

If the same flat were in Banja Luka, in condominium ownership, the sister would also have the right, with 60 days to reply in writing. If it were co-ownership of, say, a building plot in RS, under the basic rule she would not have it.

In practice the best outcome for a buyer is that both heirs sell the whole flat together. The right of first refusal then no longer arises, and you get the whole property without a co-owner.

How DMI helps

DMI currently has eight flats listed, all in Sarajevo. We visit every property in person before publishing it and check the land register, legalisation and photos, so we can tell you in advance whether there are co-owners and what that means for the purchase. When a co-owned share is being sold, we help make sure the offer to co-owners is sent properly and the evidence is ready for the notary. Buyers abroad can view properties by video tour. See all our properties.