2020-12-15
It is necessary to ensure reasonable prices, availability and supervision of notary and bailiff services
The State has delegated performance of functions to bailiffs and notaries, however sufficient measures have not been taken to ensure effective performance of these functions: equal accessibility to notary and bailiff services for all residents of Lithuania and payment of a reasonable price for them. This is demonstrated by the audit carried out by the National Audit Office “Is it ensured that State functions delegated to notaries and bailiffs are performed effectively”.
Every year natural and legal persons pay bailiffs about 30 million euros, and notaries – about 45 million euros of remuneration for their services. About half of the income received is used to cover salaries of employees, maintenance of registered offices and other operating costs; the rest is the net income of bailiffs and notaries. In 2018, one bailiff received from 0.6 to 26.2 thousand euros per month, one notary – from 1.3 to 34 thousand euros per month in net income.
“The Ministry of Justice does not evaluate what costs are necessary to create proper conditions for the provision of services to bailiffs‘ and notaries’ clients and to employ the necessary qualified staff for the performance of the functions delegated by the State, what should be the net income of bailiffs and notaries in order to ensure their economic independence, provided for in the law, therefore, they cannot determine the economically reasonable amounts of the bailiff’s enforcement costs and notary fees,” says Rasa Rakauskienė, the Principle Auditor of the Governance Audit Department.
According to the rates set by the Minister of Justice, the bailiff’s remuneration increases as the amount to be recovered increases. The minimum remuneration limit has been set, so when recovering debts of up to 60 euros, which account for about one third of all debts to be recovered, the debtor has to pay the bailiff up to 10 times more than the debt.
The amount to be paid for the performance of notarial acts depends not only on the established notary fee rates, but also on the notary’s decision. The vast majority (71 %) of the fees are set at intervals, the minimum and maximum levels of which vary more than 3 times in some cases. For example, depending on a notary’s decision, you may have to pay from 29 to 121 euros for the notarization of the contract establishing the procedure for the use of immovable property; and from 205 to 605 euros for the notarization of the contract on the use of property with the value of 100 thousand euros. If a notary decides that the transaction is complex, you may have to pay extra for drafting the transaction and for legal advice.
During the audit we could not assess how notaries actually apply the rates set by the Minister of Justice and calculate the price of a specific notarial act on the basis of them, because the Ministry does not analyse the practical application of the rates, and the Lithuanian Chamber of Notaries refused to provide the auditors with access to notary documents and to assess how they calculate the price of a notarial act according to the established rates.
Another identified problem was the unequal accessibility of services provided by bailiffs and notaries to all residents of Lithuania. There is no possibility to receive notarial services by e-mail, and only 1 % of natural and 6 % of private legal persons provided enforceable documents by e-mail in 2019, therefore the physical availability of services remains important. In six (out of 17) territories of activity bailiff offices are concentrated in one city of the territory, in 4 municipalities there are no notaries, therefore residents have to travel more than 50 km to receive notary and bailiff services.
We recommended to the Government and the Ministry of Justice to fundamentally reform the mechanism for determining the bailiff’s costs and notary fees, to provide for measures to improve accessibility, improve supervision and control of activities, and to correct other shortcomings identified during the audit. Implementation of the recommendations of the NAO will ensure effective performance of State functions delegated to bailiffs and notaries.