Is the kapara refunded if the buyer backs out? Not automatically. If the buyer is responsible for non-performance, the seller may keep the kapara or claim performance or damages. The kapara is returned if this was agreed, or if performance becomes impossible because of an event for which neither party is responsible.
When a flat changes hands in Montenegro, money often moves long before the notary: the buyer pays a kapara (deposit) so the seller takes the listing down, and the seller accepts it so the buyer takes the deal seriously. The trouble starts when one side walks away. Local searches show where the confusion lies: next to "kapara za stan" (deposit for a flat), people most often add "iznos" (amount), "primjer" (example) and "ugovor" (contract), followed closely by "kapara ili avans" (deposit or advance), "kapara odustanica" (deposit as a withdrawal fee) and "vraćanje dvostruke kapare" (getting a double deposit back).
This article explains what Montenegro's Law on Obligations actually says, why a kapara cannot replace the notary when you buy a flat, and what a preliminary contract costs under the notary tariff in force since 9 April 2026.
What a kapara is under the law
A kapara is a sum of money that one party gives the other when the contract is concluded, as a sign that the contract has been concluded. The law draws three rules from this:
- The contract is deemed concluded once the kapara is given, unless agreed otherwise.
- When the contract is performed, the kapara is returned or credited against the price. With a flat it is normally credited.
- A kapara is not an exit ticket. Unless agreed otherwise, the buyer cannot withdraw by leaving the kapara behind, and the seller cannot withdraw by paying back double.
The third rule surprises most people. "I'll give you double back and the flat is free again" is not a right the seller has simply because they accepted a kapara. That right exists only if you expressly agreed it, and then the kapara counts as a withdrawal fee (see below).
With a flat, a kapara does not replace the notary
A legal transaction whose subject is the transfer or acquisition of ownership of real estate must be made as a notarial deed, and a transaction not made in that form has no legal effect. The same applies to the preliminary contract: the rules on the form of the main contract also apply to the preliminary contract when form is a condition of validity.
A receipt saying "deposit received for the flat", signed in the flat or at an agency, therefore cannot replace that form. Pay the kapara together with a preliminary contract concluded before a notary, and until then do not pay it without checking the cadastre extract. What to look for in it is covered in our article on checks before buying.
Who loses the kapara and who pays back double
If the contract is not performed, the law gives the party that is not at fault a choice. What they can claim depends on who is responsible:
| Who is at fault for non-performance | What the other party can claim, at its choice |
| The buyer, who gave the kapara | Performance of the contract, if still possible; or damages, with the kapara credited or returned; or to keep the kapara |
| The seller, who received the kapara | Performance of the contract, if still possible; or damages plus return of the kapara; or return of double the kapara |
Three additions from the same part of the law:
- A party that claims performance is also entitled to damages for the delay.
- At a party's request, a court may reduce an excessively large kapara. The law does not set how large a kapara may be; the amount is agreed.
- If the obligation has been partly performed, for example if the buyer paid part of the price on top of the kapara, the creditor cannot simply keep the kapara: it can claim the rest and damages, but the kapara is credited against the damages.
A double kapara, then, is not an automatic penalty. It is one of three claims the buyer chooses from when the seller is responsible for non-performance. If the seller disputes being at fault, a court ultimately decides.
Kapara, advance payment and withdrawal fee are not the same
| Kapara | Advance payment (avans) | Withdrawal fee (odustanica) | |
| What it is | A sign that the contract is concluded | Part of the price paid in advance | The price of an agreed right to withdraw |
| Can you withdraw by paying it | No, unless agreed | No | Yes, that is its purpose |
| If the buyer withdraws or is at fault | The seller chooses: performance, damages or keeping the kapara | On termination it is returned with default interest, and the buyer owes any damages it caused | The buyer loses the amount |
| If the seller withdraws or is at fault | The buyer chooses: performance, damages plus refund, or double the kapara | Returned with default interest from the day it was received, plus damages | The seller pays back double |
When a right to withdraw is agreed together with a kapara, the kapara counts as a withdrawal fee: whoever gave it loses it, and whoever received it pays back double. That right ends when the party starts performing the contract or accepting performance. If no deadline for withdrawal was agreed, it can be used until the deadline for performing the obligation expires.
So do not write only "10,000 € paid" in the preliminary contract. State whether it is a kapara, an advance or a withdrawal fee. That one word decides whether, if the deal falls through, you get back the same amount, double, or nothing.
What the preliminary contract must contain
A preliminary contract is binding if it contains the essential elements of the main contract. If the other party refuses to conclude the main contract, a court can order it to do so; the claim must be filed within six months after the deadline set for concluding the main contract expires. A preliminary contract is not binding if circumstances have changed so much since it was concluded that it would not have been concluded had they existed at the time.
Put at least the following in the preliminary contract for a flat:
- The parties and the property as registered in the cadastre: cadastral municipality, plot number, cadastre extract number and the designation of the unit.
- The price and payment terms, including the amount and nature of the payment: kapara, advance or withdrawal fee.
- The deadline for concluding the main contract, because the six-month period runs from it.
- The condition of the flat on handover: encumbrances, mortgage, tenants, unpaid utility bills.
- What happens if the bank does not approve the mortgage within a set time, if you are buying with a loan. The law does not address this specifically, so it is better for the contract to do so. How a mortgage works is covered in our article on mortgages and interest rates.
If you are buying off plan, a preliminary contract with the developer needs extra points: construction deadlines, a payment plan by stage and the use permit. That is covered in our article on buying property off plan.
What a preliminary contract costs at the notary
Under the Tariff on Fees and Expenses of Notaries, published in the Official Gazette of Montenegro 49/2026 and in force since 9 April 2026, a notary charges 50% of the fee that would apply to the contract itself for drawing up a preliminary contract. If the main contract is then concluded before the same notary, its fee is reduced by the amount paid for the preliminary contract.
Example for a flat worth 100,000 €: the fee for a contract in that value band is 480 €, so the preliminary contract costs 240 €. When you conclude the main contract before the same notary, you pay another 240 €. VAT is added to the fee, and the tariff is mandatory: a notary may charge neither more nor less. An annex to a contract costs 30% of the fee, and termination before a notary also 30%.
You can also pay the kapara and the rest of the price through the notary's special account, so the money reaches the seller only once the agreed conditions are met. The fee for this is 0.3% of the amount, at least 150 €, for every started six months of safekeeping. The full list of costs and steps up to registration is in our article on the purchase contract at the notary.
Before you pay a kapara
| Check | Why |
| Cadastre extract: owner, encumbrances, annotations | A kapara should not be paid for a flat the seller cannot transfer |
| Whether the payment is a kapara, an advance or a withdrawal fee | This decides how much you get back |
| Deadline for the main contract | The six-month period for a court claim runs from it |
| Mortgage condition | So you do not lose the kapara if the bank says no |
| Preliminary contract before a notary | Without that form the preliminary contract has no legal effect |
Transfer tax is paid by the buyer on the main contract, and how it is calculated is explained in our article on property transfer tax. Browse current flats and houses in our real estate listings.
Frequently asked questions
Must the seller pay back double if they back out? If the seller is responsible for non-performance, the buyer may claim double the kapara, but that is one of three options: the buyer can also claim performance, or damages plus a refund of the kapara. If the kapara was agreed as a withdrawal fee, a seller who withdraws pays back double.
How large should a kapara on a flat be? The law does not set an amount. It is agreed, and at a party's request a court may reduce an excessively large kapara.
Kapara or advance payment: which is better for the buyer? An advance is returned with default interest on termination, but never doubled. A kapara gives the buyer a stronger claim if the seller is at fault, but exposes the buyer more if the deal fails through the buyer's own fault. What matters is that the contract says exactly which one it is.
Does a preliminary contract for a flat have to be made before a notary? Yes. When form is a condition of validity for the main contract, the same form applies to the preliminary contract, and a contract transferring ownership of real estate must be a notarial deed.
What does a preliminary contract cost at the notary? Half the fee for the contract, plus VAT. For a flat worth 100,000 € that is 240 €, and the amount is deducted from the fee for the main contract if you conclude it before the same notary.
Sources
The rules on kapara, withdrawal fees and preliminary contracts come from the Law on Obligations (articles 40 and 75 to 79), and the rules on returning what was given on termination and when performance becomes impossible from articles 127 and 132 of the same law. The notarial deed form is required by article 52 of the Law on Notaries. The fees are taken from the Tariff on Fees and Expenses of Notaries (Official Gazette of Montenegro 49/2026, tariff numbers 1 and 15), published by the Notarial Chamber of Montenegro. Fijaka is a listings platform and does not give legal advice; for a specific contract, consult a notary or a lawyer.