March 2020

On 11 March 2020, the Law on the Amendments and Addition to the Law on Obligations entered into force (“the Official Gazette of RS” No. 18/2020; hereinafter: “the Law”), which brings one useful novelty.

According to the previous text of the Law on Obligations (“Official Gazette of the SFRY”, No. 29/78, 39/85, 45/89 – YCC decision, and 57/89 “the Official Gazette of the FRY”, No. 31/93 and “the Official Gazette of Serbia and Montenegro” No. 1/2003 – Constitutional Charter), Article 90 stipulated that the form prescribed by law for an agreement or some other legal affair shall also apply to a power of attorney for conclusion of such agreement/performance of such legal affair (the so-called “form parallelism”). In practice, this meant that if a person, for instance, wants to conclude a real estate sale and purchase agreement (for the conclusion of which a form of a notary public certified (solemnized) document is mandatory) through an attorney, the attorney must be authorized by a power of attorney drafted in the same form as the agreement – the form of a notary public certified (solemnized) document.

Apart from the unnecessary costs that the above-mentioned rule implied (in accordance with the notary public tariffs, there is a considerable difference in the notary public fee between the solemnization of a document and the signature certification), as well as the waste of time (the solemnization process lasts much longer than the process of signature certification), it at the same time placed the certified individuals at unequal positions, i.e. the persons who certified the power of attorneys for undertaking legal affairs through an attorney abroad and the persons who did the same in the Republic of Serbia. Namely, public notaries in the Republic of Serbia did not enter into the regulations of foreign countries i.e. they did not demand, for instance, the solemnization of power of attorney for conclusion of real estate sale and purchase agreements in case of their certification by a competent authority abroad, which made it possible to conclude that an agreement through an attorney on the basis of a power of attorney that only had a certified signature of a principal abroad. The aforementioned, on the other hand, was not possible if the power of attorney was certified in the Republic of Serbia, when the power of attorney had to be solemnized.

In accordance with the provision of the Law, the above-described inequality was corrected, so now, when the power of attorney is provided for the conclusion of an agreement or performance of a legal affair for which a form of a publicly certified (solemnized) document or a notary public record is mandatory, it is sufficient to have the certified signature of the principal, with no need for the power of attorney to be composed in the form of a publicly certified (solemnized) document.