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Legal Considerations before Signing a Promise of Sale in Malta

Legal Considerations before Signing a Promise of Sale in Malta

23.10.2026

Understanding the Promise of Sale

A promise of sale, known as a konvenju in Malta, is the preliminary agreement through which the vendor undertakes to sell, and the purchaser undertakes to purchase, immovable property on the agreed terms. Although ownership is transferred only through the final public deed, the promise of sale is not merely a reservation form or expression of interest. It creates binding contractual obligations and should therefore be negotiated and reviewed with care.

Under Maltese law, a promise relating to immovable property must be recorded in writing to be enforceable. Article 1357 of the Civil Code (Chapter 16 of the Laws of Malta) provides that an accepted promise creates an obligation to carry out the sale and, where performance is no longer possible, damages may arise. Its terms should therefore identify the parties, the property and the transaction with sufficient clarity, and a notary should be involved so that the parties’ intentions and the required legal and fiscal formalities are properly reflected.

What Should the Promise of Sale Contain?

The promise of sale should identify the purchaser and the vendor by their full legal particulars and describe the property precisely. The description should cover its address, type, boundaries where appropriate, appurtenances, common areas, garage or parking space, and any other part included in the transaction. Relevant plans should also be attached or clearly identified whenever needed to avoid uncertainty.

Furthermore, the agreement should state the purchase price, how and when it will be paid, the amount and legal nature of any deposit, and who will hold it pending the final deed. It should clearly specify whether the deposit is paid on account of the purchase price, as earnest, or as pre-agreed damages, since its classification may affect the parties’ rights if the sale is not completed. The agreement should also specify the date by which the final deed must be published, together with any procedure for extending that period.

Any conditions on which completion depends must also be stated expressly in the agreement, which may include, inter alia:

       i.          the vendor proving a good and valid title;

      ii.          the property being covered by the necessary planning permits and corresponding substantially to approved plans;

    iii.          a satisfactory architect’s inspection or structural survey;

     iv.          the issue of any required permit for acquisition by a non-resident or non-Maltese purchaser;

      v.          the cancellation or discharge of hypothecs, privileges, warrants or other encumbrances before or on the final deed; and

     vi.          vacant possession being delivered on completion.

The agreement should also specify any furniture, appliances, fixtures or other movable items included in the sale price, together with the arrangements concerning keys, utilities and any works that remain to be completed. It should further require the property to be maintained in its agreed condition until the final deed is signed.

Default provisions require particular attention. In fact, the agreement should explain what happens if the purchaser or vendor fails to appear for the final deed, whether a deposit may be retained or returned, whether a penalty is payable, and whether the non-defaulting party may seek enforcement or damages.

 

Protect Your Interests Before You Sign

1.     Choose a Notary of Your Choice and Obtain Advice

The purchaser normally selects the notary, who draws up or reviews the agreement, conducts searches and prepares the final deed. The notary has public duties connected with the legality of the transaction and registration. Where the parties’ interests may diverge, either party may also obtain independent legal advice before signing.

2.     Confirm Ownership and Title

The vendor should provide the notary with the deed by which the property was acquired, together with any relevant plans and supporting documents in the vendor’s possession. The promise of sale period should also allow sufficient time for the notary to carry out the necessary searches and verify the vendor’s title and ability to transfer the property.

3.     Verify Planning Permits and the Property’s Condition

The notary’s examination of title does not replace technical due diligence. Before entering into the promise of sale, or by including an appropriate condition in the agreement, the purchaser should engage an architect to compare the property with the approved plans, identify any unauthorised development, verify its boundaries and assess visible structural or physical defects. The importance of clear warranties concerning planning permits was highlighted in Ekaterina Momtcheva v Danseller Company Limited and Jarrow Limited (Court of Appeal, 27 May 2016), where the property did not conform to the permits and plans promised by the relevant date. In the case of an apartment, the purchaser should also clarify the extent of the common parts, any condominium rules and any areas subject to exclusive use.

4.     Understand Ground Rent, Servitudes and Restrictions

The agreement should state whether the property is freehold or subject to emphyteusis or ground rent, whether the ground rent is perpetual or temporary, and whether it is redeemable. Rights of way, drainage rights, use restrictions and other servitudes should be identified because they may materially affect enjoyment or development.

5.     Set Realistic Deadlines

The validity period should allow sufficient time for the completion of searches, the procurement of permits and financing, and the performance of any agreed works. Article 1357(2) of the Civil Code is particularly important in this regard. It provides that the effects of a promise of sale ordinarily cease upon the expiry of the period agreed by the parties or, where no period has been agreed, upon the expiry of the statutory period. To preserve the right to seek enforcement of the promise of sale, the party concerned must file a judicial letter before the relevant period expires and, if the other party still fails to comply with its obligations, must file the required sworn application within thirty days from that expiry. In Carmen Dingli v Lawrence Cassar, decided by the Civil Court, First Hall on 5 December 2025, the Court stressed that this mechanism does not amount to an informal extension and may be invoked only by a party that was itself ready and able to complete the transaction, having fulfilled its obligations by the expiry date. Any consensual extension should therefore be made in writing before expiry and notified where required.

6.     Registration and Provisional Duty

A promise of sale must be notified to the relevant Maltese tax authorities in accordance with the applicable legal and fiscal requirements. The notary generally handles the necessary registration and provisional duty formalities on behalf of the parties.

Before signing, both parties should read the promise of sale carefully, ensure that every material agreement is recorded in writing and seek clarification on any term that remains uncertain. Purchasers should not rely solely on advertisements or statements made during viewings, while vendors should be confident that they can honour the obligations they undertake concerning title, permits, possession and completion.

A carefully drafted promise of sale provides more than a route to the final deed. It gives both parties clarity, allocates risk and helps prevent costly disputes. Taking the time to ask the right questions before signing can make the difference between a smooth property transaction and a prolonged legal difficulty.

Should you require advice or assistance in this regard you may contact us on litigation@dingli.com.mt.