Lithuania: New Amendments to the Notarial Law create preconditions for easier debt recovery from 1 January.
As of 2016 Notaries may affix enforcement clauses to notarized transactions that give rise to monetary obligations. The enforcement clause allows direct access to the bailiff. This novelty benefits creditors, who can now avoid legal proceedings, save on lawyer’s fees, avoid stamp duty costs (service by a notary is cheaper) and gain quicker access to the bailiff.
Moreover, extending notaries’ competence in the field of enforcement clauses will reduce the workload of the courts because many debts will be recoverable without court intervention.
A creditor need not follow any specific procedures in order to serve the debtor. The debtor will be informed by the notary before affixing the enforcement clause. Specifically, the notary, after first having verified the formalities (such as whether the creditor is really a creditor or whether a debt payment deadline is overdue) will notify the debtor by registered letter, allowing them to pay the debt or state their position within 20 days. However, regardless of whether the debtor replies or not, the notary may affix an enforcement clause, thus allowing the creditor to apply directly to the bailiff.
Notarial approval of the transaction and the notarially issued enforcement record can even be a more convenient tool in contrast to a court order, which until now has been considered as one of the easiest and quickest ways for a creditor to obtain judgment for a debt. Service of a court order on a debtor (if a natural person) must be more strictly proved (i.e. it is not enough to send a registered letter and service by public announcement or through curators is not allowed). Moreover, if the debtor simply objects to a court order, a court order would not be valid at all.
A notarial enforcement clause or refusal to affix it can be appealed under special procedure before the court but will not automatically stop the validity of the enforcement clause or bailiff enforcement action based on the enforcement record.
Note that, additionally, parties may have any deals notarized.
Parties may rush for notarized approval of a contract involving significant monetary obligations, while in the future creditors may seek to secure easier preventive debt recovery.
Source: 20 October 2015 Law on Notaries amendment act No. XII-1977.