Reservation agreement in Lithuania

The reservation is the first document a buyer signs about one specific flat. Its purpose is narrow and entirely practical: to take that flat off the market for a fixed number of days so both sides can prepare what comes next — a bank decision, document checks, a draft contract. Ownership does not move at this stage, and neither does anything in the register.

What you are actually buying

Lithuanian law does not define a reservation agreement as a contract type of its own. It is an ordinary contract written under freedom of contract, which means its content comes from whoever drafted the text rather than from a statute. Two developers can hand you documents with the same heading that work in completely different ways.

The usual construction: the seller undertakes not to offer the flat to anyone else before a stated date, the buyer pays a reservation fee, and both agree to sign a preliminary agreement by that same date. Nothing more. So the question to ask before signing is not whether the price is good, but what the fee is buying. The answer is always time, never the flat.

Six points the document has to settle

Reservations are short, and what falls out of a short document is exactly what gets argued about later. Before signing, check that the text answers all six:

• the object — identifiable beyond doubt: address, flat number or project index, area, and the unique register number if one already exists;
• the price — fixed for the reservation period, or still movable; and if movable, on what grounds;
• the term — a calendar date, not “about two weeks”;
• the fate of the payment — when it comes back, when it does not, and whether it is set off against the price;
• what comes with the flat — whether a storage room and parking space are part of the reservation;
• grounds for walking away — what either side may say no to without consequences.

A point left out of the text does not disappear; it simply moves into a phone call. The phone call will not be available later.

Reservation fee, advance, deposit

Money paid at this stage travels under one of three labels, and the label changes the consequences. A reservation fee is often treated as payment for a service — for keeping the flat off the market — which lets the seller keep it even if the buyer withdraws for reasons of their own. An advance is part of the price paid early: it is set off against the price and normally returned if no contract follows. A deposit (rankpinigiai) is a security device defined in the Civil Code, and its consequences are deliberately asymmetric — a buyer who walks away loses it, while a seller who walks away pays out more than was received.

In practice the heading matters less than the clause. Read on what conditions the sum comes back, within how many days, and to which account. Check that the payee is the same company that signs the agreement: a transfer to an individual or to an agent who appears nowhere in the contract becomes a separate and difficult conversation later.

The term, and the day after it

A reservation is time-limited by nature. When the date passes it simply stops working: the seller is free again and the buyer has no priority of any kind. Nothing renews automatically, not even when the delay had nothing to do with the buyer — a bank takes longer than promised, a valuer comes later, a document from abroad travels for weeks.

So the term is set backwards from whatever has to happen inside it. If a mortgage decision is part of that list, the date follows the bank's last step rather than your own optimism. An extension is always possible, but it is a new document signed by both sides — not a message saying the flat is still being held.

What a reservation will not do for you

It grants no ownership, produces no entry in the Real Property Register, and tells you nothing about whether the flat carries encumbrances. It does not mean a bank has agreed to lend, and it does not freeze the price if the text itself allows the price to move.

From that follows a short sequence. Before transferring anything, check the company in the register of legal entities by its code, and check the flat by a register extract — the extract shows the owner and every seizure or mortgage. If the flat does not yet exist as a separate registered object, that is normal for a new building, but then the reservation has to say how it will be identified once it does.

This article describes general practice in Lithuania and is not legal or tax advice. What binds you is the text you sign, and it is worth putting that text in front of a notary or a lawyer before signature rather than after.