The retention of title is one of the more effective measures of payment insurance, since it offers a favourable position to both contracting parties. It is beneficial to the buyer, since he is in direct possession of the immovable property as the subject of the retention, as well as to the seller due to the fact that he retains the ownership right to the property until the purchase price being paid in full.
As an insuring instrument in rem, the retention is defined in the Slovenian administration by the Law of Property Code as well as the Code of Obligations, whereas the assessment of its behaviour in relation to insolvency is regulated by the general Financial Operations, Insolvency Proceedings and Compulsory Dissolution Act. The beginnings of the law date back to the times when the Obligations Act still applied in Slovenia, however, it was not particularly viable neither in practice nor in theory and various attempts were made to drive it out of the system.
In most cases, the retention of title is concluded as part of the sales agreement and represents its optional clause. In essence, it is a credit sale exceeding the effects of the simultaneity of fulfilment principle. Retention among parties is applicable absolutely, without the requirement to fulfil any formality, which could not be said for the erga omnes effect. In order to rely upon the retention against third parties, the buyer's signature must be certified by a notary before the buyer's insolvency or seizure of property. In the commentary of the Code of Obligations, page 358 reads that on the basis of such a current state this is a narrowed enforcement of the retention vis a vis the buyer's creditors, giving the latter at least a theoretical advantage. Certain legal systems offer the seller a wider range of rights in case of insolvency or enforcement against the buyer, since in these proceedings the seller may act as the owner of the burdened property with the right to separate satisfaction or objections, without the condition of prior fulfilment of formalities in terms of notarial authentication of the signature.
A peculiar aspect of the retention of title is the possession of the inchoate title by the buyer, guaranteeing him a firm position to obtain full (property) rights, which may be prevented only by factors arising from his side.
Due to the insufficiency of the effects of the ordinary retention, the economic-business practice developed a wide variety of its modalities, which individually mean an upgrade for the (international) market's specific needs, and at the same time for instances of further sale and processing of the subject of the retention. These occur in a more or less consistent form in all European national orders, event though the field as such is not yet harmonized.
As far as the subject matter of the retention is concerned, it is necessary to stress its power(lessness) in relation to insolvency, the regulation of which is neglected in the Slovenian system. Although the practice in resolving various conflictual situations leans onto the German regulation, a more strict definition of the positions in the national order would be nonetheless better.