Claim under an equity participation agreement in construction: calculation, for late payment, sample, form, deadline

Subject of the agreement

The subject of a shared construction agreement is the obligations of the parties directly related to the creation of a real estate project, obtaining permission to put it into operation, as well as the transfer and acceptance of a shared construction project (based on clause 1 of Article 4 of Law No. 214-FZ).
The text of the agreement clearly defines the transfer of a strictly defined property within the period established by the agreement .

No other agreements, such as, for example, joint financing of construction, participation in investment activities, assignment of the right to claim a finished DDU facility, are provided for. This is true even if such an agreement is called an “agreement for participation in shared construction.”

The agreement determines the shared construction object, which its participant must receive when the developer receives permission to put the property into operation (based on paragraph 1, paragraph 4, article 4 of Law No. 214-FZ ).

The shared construction agreement must indicate:

name of the property;
compound;
project area;
address;
specific location.

That is, it is indicated which apartment the participant will receive, in which house, at what address, on what floor, what area, layout. It is also specified in what form the object is to be transferred: with rough finishing or interior finishing is carried out by the developer.

The contract for shared participation in construction, current for 2019, can be found here.

Possible pitfalls

An agreement for participation in shared construction is beneficial for the shareholder only if it is drafted correctly. In addition to including mandatory conditions established by law, it is also worth paying attention to the following points:

The correct form of the transaction. The document should be called “Agreement of Participation in Shared Construction”. Because, for example, there is also a preliminary one, the legal status of which is very different.
Availability of documents. The developer must be ready to provide the investor with all the necessary documentation (design, construction permit, documents on ownership or lease of land).
Possibility to change the price. If such a clause is present, in the future the developer will be able to demand additional funds from the investor.
Legality of conditions. If the contract contains terms that do not comply with legal requirements, they can be declared illegal in court.
Financial condition of the construction company. It is recommended to check how stable and liquid the company is even before signing the contract (for example, by studying its financial documentation). This will help assess how likely it is to go bankrupt.

To avoid all these risks, the shareholder must carefully study the document before signing and pay attention to all unclear points.

The best option is to involve an experienced lawyer in the transaction, who will definitely help you avoid concluding an agreement on unfavorable terms.

All information about escrow accounts and how to work with them. How to purchase real estate using cash? The article contains detailed instructions. Any real estate transactions in which minors participate have their own characteristics, so such transactions must be treated very carefully! Useful information at the link.

Essential terms of the agreement

From the first lines of the contract it should be clear between whom it was concluded. Therefore, it is necessary to describe in as much detail as possible who acts as the “developer”.

The following information is indicated:

full official name of the developer company;
date and place of its registration;
registration certificate;
certificate of inclusion of the company in the Unified State Register of Legal Entities.

An agreement is concluded only with the company whose name appears in the documents permitting construction, the title document for the land and the project declaration.

When concluding an agreement on shared participation in construction with an intermediary, a document must be attached confirming the legality of the right to sell the object.

According to the charter, the general director acts on behalf of the organization , which means that the contract must be signed by him.

If a document is endorsed by another representative of the company, this means that he is acting under a power of attorney. This option may create certain difficulties in the event of possible litigation.

The legitimacy of the DDU is ensured by the exact characteristics of the property, including the cadastral number of the plot, the construction address of the property and the number of the apartment being purchased.

a clause on financial guarantees has been introduced as mandatory , through which the fulfillment of obligations by the developer is ensured.

A shared construction agreement always contains information about the area of the apartment . However, many developers add a clause to the DDU, according to which, if there is a surplus of square meters, the shareholder is obliged to pay an additional amount, or the developer will pay part of the money for the missing area.

Although the law does not prohibit making additions to the contract, both of the above options violate the rights of a participant in shared construction.

As the Federal Law “On the Protection of Consumer Rights” provides, if the buyer receives an apartment of a smaller area, the developer is obliged to reconsider the price and return the excess.

If the area of the apartment turns out to be larger, then the shareholder is not obliged to pay anything extra, since it is the developer’s fault.

Often, the developer tries to include in the contract a clause according to which he has the right to change the design documentation of the house, including the number of floors and layout of the apartment, without agreement with the shareholder.

The Law “On the Protection of Consumer Rights” and the provisions of Federal Law No. 214 consider such an addition illegal , since the buyer must have the most detailed information about the product being purchased.

Pros and cons of buying an apartment under DDU

Each type of contract or agreement has both positive and negative sides. The same applies to a shared construction agreement. On the one hand, concluding a DDU increases the security of the transaction for the shareholder, but does not provide a 100% guarantee that he will receive the apartment that he paid for in advance. Therefore, we will consider below what is good about a shared construction agreement, and what negative aspects appear when concluding it.

Advantages of concluding a preschool education:

Purchasing a real property. The legislation provides that the DDU must contain a detailed description of the object of sale and purchase and the construction object itself.
Reducing the risk of fraud. The share participation agreement is registered with Rosreestr without fail in accordance with the law, that is, you are buying something that is actually being built or is starting to be built.
The contract price remains unchanged. From the moment the agreement is concluded, neither party has the right to change the price of the apartment down or up. If, after signing the contract, prices for building materials have risen sharply, the buyer can rest assured that this problem will not affect him.
Availability of strict requirements. An equity participation agreement guarantees you that you will receive exactly what you paid for. The rights of the developer are largely limited by the requirement to obtain consent from the shareholder when intending to make changes to the project or the terms of the agreement. This means that changes will not occur without your approval. And if they happen, the construction company will answer according to the law.
Availability of guarantees. The warranty obligations of the construction company must be clearly and fully stated in the agreement on shared participation in housing construction. If problems arise and litigation begins, the shareholder can refer to the agreement, which contains everything.
Possibility of collecting penalties. For the shareholder, it will be a plus that if there is a delay in delivery of the house or other forms of violation of the contract by the developer are identified, the buyer can sue to collect a penalty. This paragraph is in effect in connection with amendments to the existing law in order to protect the rights of shareholders.
The ability to terminate the contract both unilaterally and bilaterally at any time. Such rights are prescribed in advance.

Construction and delivery dates

The terms specified in the agreement on shared participation in the construction of an apartment building require special attention:

Duration of the DDU - its validity should end only after both parties have fulfilled their obligations.
The specific date of receipt by the shareholder of the property under the deed - quite often the developer indicates the annual quarter when the shareholder should receive the key to the apartment. This is completely legal, but extremely inconvenient for a participant in shared construction.

If the company does not fulfill its obligations, then the shareholder, on the basis of Federal Law No. 214, can terminate the contract and file a lawsuit after two months from the end of the appointed period.

This can be done after two months have passed after the end of the quarter in which the house was supposed to be rented out according to the terms of the contract.

Warranty period - according to the law, the developer is responsible for the apartment for five years , and for engineering and technological equipment - three years . Any reduction in these periods is illegal.

How to draw up a shared construction agreement

Shared construction is a type of investment activity in which a company developer attracts funds from shareholders (investors) for the construction of apartment buildings and/or other real estate objects.

Upon completion of construction, housing in the new building becomes the property of the shareholders.

For those who want to purchase housing on favorable terms, a shared construction agreement has many advantages:

the price at the initial stage of construction is much lower than on the secondary market;
You can pay your share in installments;
You can choose any layout and room parameters.

Perhaps the most important advantage of such a transaction is that it is insured. DDU is subject to mandatory registration with Rosreestr, which means that the government agency will check information about the developer.

Payment procedure

Of no small importance are the points relating to the financial side of the transaction.

The contract must clearly define the cost of the object, preferably in ruble equivalent .

If the price per square meter is indicated in conventional units, but the text of the contract does not fix the currency exchange rate, this may result in a significant overpayment for the equity holder if the exchange rate increases.

The DDU stipulates not only the deadline for payment by the shareholder of the purchase, but also the sources of funds (equity capital or bank loan).

It is important to stipulate in the contract who exactly will carry out the process of registering ownership rights of the finished property, the developer or the shareholder, and who will pay the costs.

payment of utility bills also requires clarification . Often, a construction organization charges the shareholder with the payment of “utilities” from the moment the building is put into operation. According to legislative norms, the shareholder is obliged to pay utility bills only after receiving the property under the deed.

DDU: what is it and why conclude it

The investor’s task is to insist that the equity participation agreement is correctly drawn up and signed. Since the construction company receives the money immediately and no longer needs any help from clients in the future, it is not against accepting funds “on parole.” But the other party bears risks, including being left without the funds that have already been invested.

DDU, or equity participation agreement, provides the following advantages:

Responsibility of the developer to the shareholder. In particular, financial. “Frozen” construction projects are not uncommon, and it is impossible to legally force a company to continue building a house. But in many cases it is possible to return the funds if the apartment was never provided
Formal registration. According to clause 3 of Article 4 of Federal Law-214 (on shared construction), the DDU agreement undergoes state registration. Only after this will it be valid. This confirms the deal. In addition, a fraudulent scheme is excluded: the object will not be able to be sold twice
Guarantee period. The state obliges the developer to eliminate construction defects that were identified within 5 years from the date of completion of work
Clearly defined rights and responsibilities. A correctly completed share participation agreement takes into account all the details. This significantly reduces the chances of a construction company being deceived.

Of course, you shouldn’t initially look at the developer as a fraudster. Most of them really want to build an excellent residential complex, and it is just as profitable for them as it is for the shareholders. But different situations happen: from an economic crisis to banal errors in calculations. We are talking about large sums here. Therefore, the conclusion and registration of an equity participation agreement is necessary to be on the safe side.

Limits of liability of the parties to the contract

When concluding an agreement for shared participation in construction, it is important to clearly know the limits of liability of the parties:

Sometimes the developer, taking advantage of the shareholder’s ignorance, inserts a clause into the contract according to which his responsibility for failure to meet the specified deadlines occurs only if he is at fault. This is a direct violation of Federal Law No. 214.
Expansion of the list of force majeure circumstances . According to the law, these include natural disasters, wars, and terrorist acts. The developer can add to the list the adoption of new laws by the government, low winter temperatures, etc.
The developer may try to minimize his own liability when commissioning the facility due to the condition that permission to put the facility into operation means its compliance with the contract. That is, the very possibility of claims from the shareholder is excluded. You should know that these are completely different concepts and any defects in the apartment must be eliminated by the developer on the basis of Federal Law No. 214, or the shareholder must receive monetary compensation.
A very significant point in the contract is the period when the shareholder’s obligations to the developer are considered fulfilled . A construction organization most often defines this period as the moment the money arrives in its account. However, the obligations of the participant in shared construction are considered fulfilled from the moment the money is deposited in the bank, and he is not responsible for further actions of banking organizations.

The concept of preschool education

Deciphering the concept is unlikely to cause anyone any difficulty. DDU stands for “equity participation agreement in construction.” The concept implies attracting citizens’ money for the construction and construction of apartment buildings legally. In fact, this is the only type of agreement on the basis of which citizens (individuals) have the right to participate in financing, and the government allows the raising of finances from individuals to carry out the activities of a legal entity. In fact, an individual who is a participant in construction is an investor.

Some people do not fully understand what shared construction of apartments is. The process of participation in shared construction is as follows:

A certain construction company is created, and it receives permission to own a land plot (acquires ownership or leases).
On this land, the company decides to build an apartment building or residential complex with apartments.
The developer puts out an offer on the real estate market, and those interested can buy an apartment at the stage of construction of the house.
An assignment or participation agreement in construction is signed, shareholders give money to the company, and with this money it begins to build a house from scratch.
When construction is completed, the house is put into operation, all engineering communication systems begin to function, the developer transfers the apartment to the buyer (the shareholder who has already paid for the housing a long time ago): first, the acceptance certificate of the apartment is signed, then the keys are handed over and the ownership of the new owner is registered.

All terms of cooperation, rights and obligations of the parties are prescribed in the DDU. Therefore, you need to study it carefully before signing. If possible, give it to a lawyer or specialist for review.

Important! A DDU can be concluded at any stage of construction before the shared construction project is put into operation. The closer the construction completion date, the lower the citizen’s risk and the higher the cost per square meter.

Grounds and procedure for termination of the contract

Termination of the agreement is possible if one of the parties fails to fulfill the obligations. Filing a claim in court is possible after two months after the period specified in the contract.

In this case, you should pay attention to the amount of the penalty paid by the shareholder if the termination of the share participation agreement occurred on his initiative.

Its value can vary from 1 to 15% of the total cost of the object . The law does not provide for other punishments for the shareholder.

If the DDU is terminated due to the fault of the developer (delay in fulfilling obligations, construction of low-quality housing, etc.), then no penalties can be applied to the shareholder.

If the shared construction agreement lacks at least one of the clauses required by law, it is not considered concluded. The same applies to the lack of registration of preschool educational institutions in Rosreestr.

Model agreement of shared participation in construction (sample 2015–2016)

about a standard equity participation agreement very conditionally, since each agreement must be drawn up individually, taking into account all the nuances of the specific relationship between the developer and the investor for the construction and transfer of a very specific housing. Meanwhile, a standard equity participation agreement (sample) cannot deviate from the general rules applicable to the execution of transactions in writing.

Thus, the share participation agreement must contain:

Name of the locality where the document was drawn up and date of signing.
Individualizing data for the parties to the contract, including name or full name, registration document data for legal entities and passport data for citizens, addresses of location and residence (registration).
Powers and obligations of the parties. In the equity participation agreement, it is worth describing in as much detail as possible both the obligations and powers of each party, starting from the main ones. The key obligations of the parties are:

In relation to the developer - the obligation to build the agreed upon property within the agreed time frame, carry out measures to put the housing into operation and issue an apartment or other part of the property to the investor. The right to demand from the shareholder timely payment specified in the contract document in full.
In relation to the construction participant - the obligation to finance the construction in the amounts and terms agreed upon by the contract. The right to demand the transfer within a specified period of time of a commissioned real estate property that meets the terms of the transaction and quality standards.

It is very important not to forget to agree and reflect in the share participation agreement the main terms of the transaction, without which the agreement will not be considered signed. This:
Description of the dwelling that will be transferred to the investor after the commissioning of the constructed building, indicating the address, cadastral number of the plot, floor, area, apartment number, number of rooms, appearance (with or without finishing).
The time frame within which the counterparty developer undertakes to transfer to the counterparty - a construction participant - the real estate included in the share participation agreement .
The total amount of payments under the contract, as well as payment periods and other rules related to payments. It is better to indicate the cost per square meter of housing in rubles.
Warranty periods for the transferred property: at least 5 years for housing and at least 3 years for equipment.
Measures to ensure that the developer fulfills its obligations under the contract.

Additionally, counterparties to an equity participation transaction are free to agree in the document on any necessary conditions and circumstances that do not contradict the law.

The equity participation agreement ends with the data of the parties and their signatures (seals).

How to conclude and register a share participation agreement?

The DDU agreement must be concluded in writing. It must contain the above information. A complete list of data as of the date of conclusion of the contract can be checked in Federal Law-214 on participation in shared construction, in paragraph 4 of Art. 4. If the document does not contain all the necessary information, it will be considered invalid. You can have a contract on the Internet, but it is still worth checking it for compliance with the rules for filling it out. A typical contract contains several pages.

Research shows an amazing picture - although such an important step as purchasing real estate requires a preliminary study of all the details of the process, in reality the situation is as follows:

1. Shareholders do not look into the law and know very vaguely what they need to do.

2. Developers are promoting the opinion that the shareholder must register the agreement either through their lawyer or himself. But pay in advance.

3.Therefore, shareholders almost always pay before registering the agreement, although they usually have little idea where to register it and why.

4. However, the law does not prohibit registering an agreement independently. Moreover, it clearly states that there is NO prepayment.

5. The shareholder has every right after concluding the contract, but BEFORE payment, to insist on a trip to Rosreestr. It is not necessary to do this on the same day, so the developer’s “excuses” should not bother him. If he can’t do it right away, let him drive up on the agreed date and time. The shareholder will also come there.

6. In addition, you can register the contract yourself without the participation of the developer, when he has already signed everything. Therefore, again, all obstacles are myths.

DDU registration options

So - after concluding an agreement at the developer’s office, it needs to be registered with Rosreestr or through the MFC. It will be considered valid only from the moment of registration. The cost of state duty for individuals today is 350 rubles, divided by the number of parties to the agreement. The cost of state duty for legal entities is 6,000 rubles, also divided by the number of parties to the agreement. The size of the state duty is the same for any region. Basic documents: the shareholder’s application for registration, the agreement itself with attachments, a copy of the passport. The developer provides more information.

The registration process itself after submitting an application usually does not exceed a few days, and you should be given a receipt of acceptance with a list of documents submitted by you, the date of submission, etc. You can usually involve the developer’s lawyer in the process by issuing a one-time power of attorney for registration. In this case, you can get a DDU with registration from a lawyer in about a week, but I personally recommend doing all the steps yourself. God protects those who are careful.

A relatively new option is the electronic registration of an equity participation agreement, which has been in effect since 2020. It can save time, but it has a significant disadvantage in the form of the need for an expensive digital signature - it costs about 4-5 thousand rubles and is produced in the certification center of your city - search engines can help. The only small advantage is paying 70% of the state fee for registration - but since for individuals it is 350 rubles (see above), there is no discount on this amount.

With an electronic signature, you can go to the page for the provision of electronic services https://rosreestr.ru/wps/portal/p/cc_present/reg_rights and attach scanned copies of all documents, verifying them with the received digital signature.

Information about the developer and the cadastral number of the property are also indicated. Checking the registration of preschool educational institutions is carried out using the cadastral number in the “Electronic” section. Current link https://rosreestr.ru/wps/portal/online_request. In addition, for confirmation of registration, you can contact Rosreestr in person with your passport and cadastral number specified in the contract.

By the way, the developer should not pay in cash, since the risks here increase: from a banal robbery on the way to the place of the transaction (at the place where it was completed) to subsequent accusations of passing counterfeit banknotes. In the standard non-cash option, a special letter of credit account is created at the bank, from which the developer can withdraw money by presenting a registered DDU agreement. It is clear that the intermediary bank must be reliable, but in general there are fewer risks than with a developer. However, if the share participation agreement is registered, then you can transfer money from your bank account directly to the developer’s account.

Before you sign

Participants in shared construction are in a much riskier situation than ordinary real estate buyers.

Choose your developer carefully:

find out if it is included in the Unified Register of Developers,
find out an approximate list of delivered objects,
collect feedback from residents in constructed houses about the quality of construction,
study the audit report for the last year, as well as permits for the commissioning of capital construction projects in which the developer has participated over the past 3 years on the developer’s website,
check whether the developer has a building permit and whether its terms have expired,
familiarize yourself with the project documentation and documents confirming the developer’s rights to the land plot,
read the conclusion of the authorized bodies on the compliance of the project declaration with the established requirements on the developer’s website.

Carefully study the equity participation agreement and sign it after consulting with a lawyer. Find out what to look for and how to protect your rights.