Buying an apartment in a building under construction before July 2020 was a kind of lottery: people paid developers directly, and there was practically no guarantee that the house would be completed and delivered on time. Since July 2020, everything has changed: according to the law, equity holders now transfer money to escrow accounts, and construction companies receive it only after the houses are put into operation.
The rights of shareholders are now more reliably protected, but many still have not figured out what escrow accounts are, whether equity participation agreements (hereinafter referred to as DPAs) are valid, how calculations occur, what the purchase scheme looks like and what pitfalls can await the buyer. Let's look at it in more detail.
Legislation
- Contents and sample agreement
- Contents and sample agreement
- Documentation
Before you buy an apartment in a new building, you need to study the features of such a purchase. They are regulated by several laws:
- Federal Law of December 30, 2004 No. 214 “On participation in shared construction...”. The procedure for settlements, conclusion and termination of the contract, and the deadline for transferring the property to the shareholders by the developer are indicated here.
- Federal Law No. 177-FZ dated December 23, 2003 “On insurance of deposits in Russian banks.” The amount of the insured amount transferred to the escrow account under the DDU is 10,000,000 rubles. If the bank goes bankrupt, the funds will be returned in full.
- Art. 860.7 of the Civil Code of the Russian Federation “Escrow account agreement”. Determines the procedure for opening an escrow account and obligations under it.
Important! DDUs are now concluded in the same way as before. But the calculation procedure has changed. If until mid-2020, during the transitional stage, developers could take money from shareholders through escrow or directly, but now payments are made only through special accounts. They open for each kindergarten. The bank acts as a third party, and its participation minimizes risks for shareholders. They can be sure that their money will not go anywhere, and even if the developer goes bankrupt or freezes construction, they will be returned the entire amount.
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How to complete a transaction between individuals: step-by-step instructions
The process of drawing up a contract for the sale and purchase of an apartment requires the owner (seller) to have a certain list of documents and perform actions established by Russian legislation.
Installment plans are beneficial to both parties. The buyer receives an obvious advantage from the transaction, because he does not have to spend many years repaying the loan to the bank and spend large amounts of money in excess of the cost of the property. On the other hand, the seller of an apartment often does not have the time and opportunity to wait until a more solvent buyer appears, so he also benefits, although he risks more.
That is, the very essence of a mortgage is the sale of an apartment in installments with the execution of a purchase and sale agreement between individuals. All conditions for staged payment are carefully spelled out in the contract itself.
Features of installment plans when selling an apartment, conditions for registration and execution of the transaction, pros and cons of buying in installments. What documents are required to be provided, where to go and what to do to avoid risks.
Almost everyone knows about regular mortgage lending, but not everyone is aware that the terms “mortgage” and “mortgage lending” are not the same thing. A mortgage loan involves a third party in the transaction in the form of a financial institution issuing the loan. A mortgage is a form of collateral in which real estate is transferred into the ownership of the debtor and is paid off gradually.
When buying an apartment in installments, the buyer makes a down payment and pays the remaining amount in equal monthly installments or in accordance with the established payment schedule, say experts interviewed by RIA Real Estate. In this case, installment plans can be provided for a period from 3 months to 2 years, but usually for no more than 8 months, so the monthly payments on it are quite large.
An installment plan for an apartment from a developer allows you to buy real estate without contacting banks and financial institutions. This is beneficial for the company, since the deal allows:
- draw attention to the object being built or erected;
- increase the cost of the apartment by 10-15% (when compared with offers that involve paying the full amount at once);
- refuse to cooperate with banks and financial and credit organizations.
- The buyer should be aware of the basic conditions for providing installment plans from the developer.
The conditions are specified in the contract. If the developer takes a percentage, it is much less than the bank. As a rule, the rate is at the level of 2-3% per annum.
As soon as the seller has received the final payment from the buyer, he can immediately go to Rosreestr to remove the encumbrance.
You deposit funds to pay off the debt not to the bank, but directly to the seller (whether it is a developer in the primary market or an individual in the secondary market).
Many people believe that a bank must be involved in mortgage transactions. But in fact, you can sell or buy an apartment with a mortgage without a financial organization, with the participation of only two parties - the seller and the buyer. Formally, this will be an installment plan with a deposit, the terms of which are specified in the purchase and sale agreement.
If the credit institution is excluded, then only two persons will remain - the owner of the property and the person who wants to purchase it. We are accustomed to the fact that when buying an apartment without a bank loan, the buyer pays the seller the entire cost of the home at once. But you can go another way: agree on stage-by-stage payment and stipulate these conditions in the purchase and sale agreement. For those who are not able to pay 100% for the purchase of an apartment right away or do not want to get involved with loans, there is an alternative - buying an apartment in installments. What it is? How to buy an apartment in installments and what will the buyer face during the registration of real estate?
Before selling an apartment in installments, you should learn about the specifics of drawing up an agreement for such a transaction.
When the object of the transaction is an apartment in a new building, an equity participation agreement is concluded in accordance with Federal Law No. 214-FZ.
At the same time, there is always a risk that one of the parties to the transaction will encounter fraud by the other party to the contract. In this article, we will find out how to sell an apartment in installments in order to minimize all risks and not violate the terms of the deal.
Considering all that has been said, installment plans are not a way to profitably and simply get your own real estate, but an opportunity to “book” an apartment, understanding that the money for its purchase will, for the most part, be available in the near future. If there is absolutely no money to buy an apartment, then no one will give you any installment plan.
In comparison with a mortgage loan, we will show you the average mortgage percentage - in large banks, a mortgage for the purchase of real estate is issued at 11-13% per annum.
The installment period in this case also depends on the developer. It is rarely less than 3 months, but in some cases it also reaches 3 years. Most often: 1-2 years. The registration procedure itself is much simpler than in a bank, so you can sign an agreement in just a few days. And if you prepare carefully, then in 1 day.
What is an escrow account?
Escrow is a special account opened in a bank for settlements under DDU when purchasing housing in a building under construction. The investor transfers money there, but the developer receives it only after the house is put into operation. For construction, he finds money from his own budget or attracts funds from outside: for example, takes out a loan.
When paying through escrow, the risks for the shareholder are reduced to a minimum. If the construction company does not comply with the terms of the agreement and delays the deadlines, it can terminate the contract and then get the money back from the bank.
Is it possible to buy an apartment without an escrow account?
The main purpose of introducing escrow accounts for settlements on real estate transactions was the safety of equity holders. But reliable construction companies can still accept money from them directly; they just need to meet a few requirements:
- The first contractual agreement was concluded until July 1, 2019.
- The house is at least 30% complete, more than 10% of the apartments have been sold.
- The company can confirm the degree of readiness with a conclusion.
- The shares sold by the company will be checked in Rosreestr along with the project declaration and registered agreements.
- If the developer has received the right to work without an escrow account, he is obliged to transfer money to the fund for the protection of shareholders. In the future, compensation is paid from there if the company does not fulfill its obligations under the DDU. The contribution is 1.2% of the cost of housing.
Important! In some cases, the requirements for the minimum degree of readiness are reduced. For example, 6% is enough if the company is systemically important, builds more than 4,000,000 apartments, and there are social facilities on the site. 15% is enough if entire microdistricts are being built up according to territory development programs, schools, clinics and kindergartens are being built.
Apartment purchase and sale agreement with deferred payment
Is it necessary to make two separate agreements so that the seller (2/3 of the payment goes through maternity capital) can apply for a mortgage (a pledge by force of law) until he receives money from the Pension Fund (maternity capital to pay for his share in the apartment)?
Transaction for the sale of an apartment in Moscow, two sellers (2/3 and 1/3). The owner of 1/3 receives money, the owner of 2/3 receives part of the money and part of the maternity capital (he has a mortgage (pledge by force of law). There is only one buyer in the transaction. Is it necessary to make two separate agreements so that the seller (2/3 pays part goes through maternity capital) was able to obtain a mortgage (collateral by force of law) until he receives money from the Pension Fund (maternity capital in payment for his share in the apartment)?
This is interesting: Pension Indexation in 2020 AND 2020
Ways to buy an apartment in a new building
As a standard, all transactions with new buildings are carried out according to the DDU. But some developers offer people to buy apartments in installments.
In general, there are several ways to buy an apartment in a new building:
- According to DDU. It is concluded at any stage of construction before the house is put into operation.
- Under an agreement of assignment of rights of claim, when one shareholder sells the right to claim an apartment that has not yet been built from a construction company. Shareholders are being replaced.
- Preliminary installment purchase agreement. The riskiest option for the buyer, which is often used by developers to avoid concluding a DDU and paying through escrow accounts. An initial payment is required, the remaining amount is paid by the buyer in several payments. After full payment, the main DCT is drawn up and registered with Rosreestr.
- Purchase of a new building with the inclusion of secondary housing. An unfavorable option for the buyer: the resale property will be valued at the minimum cost, and it will be offset against the price of the new building. Usually, two DCTs are drawn up: one by one the company buys a secondary home, and the second one is used to sell a new apartment. But there may be a different scheme of the deal.
Legal advice: it is better not to experiment and buy an apartment using a regular DDU with payment through escrow. The developer may offer discounts on installment plans, but in this case the seller’s money will not be insured. If problems arise, it will be difficult to get them back.
Elena Plokhuta
Lawyer, website author (Civil law, 6 years of experience)
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Apartments in installments from the developer
Advice from lawyers:
1. Can I pay off the installment payment from the apartment developer with maternity capital?
1.1. Good afternoon. You have the right to draw up an additional agreement with the developer, in which you indicate that payment in such and such an amount is made from maternity capital funds. Is the child 3 years old?
Did the answer help you?YesNo
1.2. You can, paragraph 3 of the Russian Federation Regulations dated December 12, 2007 N 862 (as amended on May 25, 2019) “On the Rules for allocating funds (part of the funds) of maternity (family) capital to improve housing conditions”
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2. The question is: can a bailiff impose a ban on registration actions on a single apartment purchased in installments from the developer (the rent for the apartment has not yet been paid), i.e., as I understand it, the apartment still belongs to the developer until full payment is made. Debts arose in connection with consumer loans. Thank you in advance!
2.1. Maybe impose it. Sincerely.
Did the answer help you?YesNo
3. We want to purchase an apartment in installments from the developer. The installment period is until May 2021. The child will turn 3 years old in April 2021. Is it realistic to use mat capital? Thank you.
3.1. If the purchase and sale agreement is concluded in May 2021, you can use it, and before that only to repay the target loan.
Did the answer help you?YesNo
3.2. Conclude the deal with the developer as an interest-free mortgage. And then it will be possible to pay with maternity capital without even waiting 3 years. But do not forget that when registering an apartment, each family member must receive an equal share.
Did the answer help you?YesNo
4. The apartment was purchased by installment plan for a year from the developer. The payment schedule and amounts are specified in the management document. Is it necessary to request from the developer a certificate confirming full repayment of the installment plan after paying the last payment for the apartment?
4.1. Yes, it is highly desirable to have confirmation that the buyer has fulfilled his obligations to the developer under the DU.
Did the answer help you?YesNo
4.2. Good afternoon. You can ask the developer for a statement of reconciliation of calculations.
Did the answer help you?YesNo
5. The apartment was purchased in installments from the developer, a mat was included. capital. Paid. When registering, do children need to be allocated a share if we purchase an apartment from the same developer?
5.1. Good afternoon, Ekaterina Evgenievna. Yes, this is necessary, because... this is the main condition for real estate transactions in which the mate was involved. capital.
Did the answer help you?YesNo
6. The apartment was purchased in installments from the developer. His accounts have been frozen. Where does the money go?
6.1. They are credited to the accounts. When accounts are seized, receipts are not blocked. Only withdrawals or transfers are blocked.
Did the answer help you?YesNo
7. How to get money (450,000 rubles for large families to pay off the mortgage) at the birth of the fourth child after January 1, 2019. We took an installment plan for an apartment directly from the developer (without a bank) and drew up the agreement notarized. The developer is an individual. face!
7.1. It is unclear what kind of money we are talking about. Mat. capital, or what?
Did the answer help you?YesNo
8. I took an apartment under construction in installments from the developer. Now the last payment is left, but the house is not rented. The developer demands a final payment, saying that the house will be completed within a month. And if I don’t make the contribution, they will charge penalties and sue. What to do?
8.1. You need to look at the terms of the contract - when is the deadline for transferring the apartment to you? Is it broken or not?
Did the answer help you?YesNo
8.2. If the developer’s requirements coincide with the terms of the contract, then it is necessary to pay on time to avoid the accrual of penalties and, in turn, demand the fulfillment of obligations by the developer.
Did the answer help you?YesNo
8.3. Hello Nikolay! If you have entered into an agreement for participation in shared construction, then your rights as a shareholder are protected by 214-FZ; in the event of a delay in putting the object into operation for more than 2 months, you can either terminate the agreement and return the money contributed, or collect a penalty. In practice, developers do not often file applications with the court for the collection of unpaid funds by the shareholder, but the law provides that if you fail to fulfill your obligations properly, the Developer can terminate the contract unilaterally. The decision is up to you.
Did the answer help you?YesNo
9. I bought an apartment in 2020 in installments from the developer. This year the house was sold and the debt was paid off. Got married in 2020 Is an apartment considered joint property? Will my spouse's consent be required for the sale?
9.1. Hello. Depending on the period in which the installment plan was repaid.
Did the answer help you?YesNo
10. I took an apartment in installments from the developer according to the remote control, 12 payments, 1st-280 the rest 70 times every 3 months, the time has come for the second payment, there is nothing to pay, what should I do?
10.1. The contract will be terminated. To avoid legal costs, resolve the issue with the developer about extending the contract.
Did the answer help you?YesNo
10.2. Good afternoon. Try to negotiate with the developer to change the terms of the installment plan. It is better to do this in writing. If we manage to reach an agreement, it is better to formalize this by signing an additional agreement to the contract.
Did the answer help you?YesNo
11. I purchased an apartment in installments from the developer, paying 75% of the full price, can I register in it? The lawyer for the developer company says that I have no right, that they will not give me the original document “on permission to put the building into operation.”
11.1. The fact is that such property is encumbered with collateral, but at the same time you have the right to register in such residential premises. The developer's refusal is simply not justified.
Did the answer help you?YesNo
12. I want to buy an apartment. The seller bought it in installments from the developer. Payment was 2/3 cash, 1/3 installments. The installment has not been paid. How can you buy such an apartment?
12.1. If the house has not been put into operation, then you can arrange an assignment of the right of claim under an equity participation agreement with a simultaneous transfer of the debt to you. If you enter everything is much more complicated. It is necessary to register ownership of the apartment. The developer will not provide the documents necessary for registration until full payment is received. You should not pay for the seller, because... there is a risk of losing money.
Did the answer help you?YesNo
13. My husband and I are buying an apartment. A finished apartment in a new building from the developer with interest-free installments for 2 years. When making the first payment we receive a preliminary purchase and sale agreement, after full payment the final one. How to initially register so that both husband and wife are the owners. We do not consider registration for one spouse.
13.1. Good afternoon You can include both spouses as buyers under the contract. In the future, ownership rights will also be issued to both in shares. If something confuses you, you can draw up a marriage contract, which states the rights to this apartment and other property.
Did the answer help you?YesNo
13.2. Both of you must then be indicated in the contract as buyers of the apartment. If the apartment is already registered as the property of the developer, then why don’t they want to immediately conclude the main contract? They are afraid that you will not pay... BUT then you also risk that you will pay, pay, and someone will take your apartment for their debts... After all, it is yours purely conditionally...
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14. I am purchasing an apartment in installments for one year. According to the temporary agreement, she will be encumbered. Please tell me, in the event of force majeure or refusal to purchase, will the developer return the money, and what must be specified in the contract for this? Thank you.
14.1. Good evening to you. Dear Tatyana, in this case, in order to answer your question in more detail and accurately, it is necessary to study your contract. Or you yourself must study the terms of refusal to perform the contract.
Did the answer help you?YesNo
14.2. Hello! The order of age (terms) of payments made under the purchase and sale agreement in the event of its termination must be established in the agreement itself.
Did the answer help you?YesNo
15. Please, how can I register the ownership of an apartment jointly with my husband at the MFC, taking into account the fact that the agreement for the purchase of an apartment in installments from the developer was issued in my name alone and, accordingly, at the moment I received the ownership document, which was also issued in my name, what documents are needed in order to re-register them as joint property.
15.1. You have the right to make any transaction in relation to your property (for example, donation, purchase and sale). The donation, purchase and sale of shares is carried out in a notarial manner. At the same time, your spouse has the right to file a claim in court for the division of jointly acquired property.
Did the answer help you?YesNo
15.2. Good afternoon Why do you need such a design? All property acquired by spouses during marriage is automatically their jointly acquired property. When selling or making another transaction with this apartment, you, as the owner, will need your spouse’s consent to the transaction.
Did the answer help you?YesNo
16. Under a preliminary agreement, we “purchased” an apartment in installments at 5% per annum from the developer. We paid 30% of the amount and immediately paid for 2 months. The house is rented. In use. We changed our minds. And now we want our money back. Is this possible?
16.1. Hello! For an accurate answer, you need to read the terms of the preliminary agreement. Without knowing the details and based on general norms, we can answer that in the absence of a main agreement, payment in advance is unjust enrichment for the recipient of the money. Therefore, you can get your money back.
Did the answer help you?YesNo
17. How to properly purchase an apartment from a developer in installments, down payment mat. capital, what to pay attention to, and what document should be drawn up to protect yourself?
17.1. Alexander, in order to make the first payment of maternity capital to the developer, it is necessary to draw up an obligation to allocate shares to the children. Purchasing without using bank money happens like this: You find the right option and enter into a share participation agreement. The seller then transfers the property into the buyer's name, placing an encumbrance until full settlement. Next comes the submission of documents to the Pension Fund. You will need: Passport Application. Birth certificates for both children and marriage. Agreement of share participation or purchase and sale. A notarized obligation to allocate shares to children in the purchased housing. Seller details. The first part is paid at the time of execution of the contract. The receipt of this money is specified in the contract. The Pension Fund verifies documents within 30 days. Another 30 days are required for the transfer.
Did the answer help you?YesNo
17.2. Hello! Initially, you can look at the information on the organization’s website, read reviews, so you will find out how many years it has been on the market and what reputation the organization has. If everything suits you, then the most important thing now is to carefully read the contract. If you have any doubts, you can consult a lawyer to review the contract. There are a lot of nuances and each organization may have its own conditions, so it is difficult to immediately say what to focus on.
Did the answer help you?YesNo
18. If an apartment has already been purchased under the DDU in installments from the developer, can I take out a loan against maternity capital and cover the remaining debt?
18.1. Good evening, you can repay without applying for a loan through the Pension Fund—apply to the Pension Fund, good luck to you!:sm_bus::sm_bus::sm_bus::sm_bus::sm_bus:
Did the answer help you?YesNo
18.2. While the house is not completed, you can take out a mortgage loan and ask the pension fund to allocate maternity capital funds to cover the mortgage.
Did the answer help you?YesNo
19. We have a court decision on the payment of the penalty by the Developer. I, in turn, have not paid the installment payment for the apartment until the end. The Developer has nothing on his account; he avoided the offset. My actions: Carry the writ of execution to the bailiff? Write an application to the Developer for partial termination of obligations under Article 410? Or are there other options?
19.1. Hello! You need to obtain a writ of execution from the court and present it to the bailiffs for execution. I wish you good luck and all the best!
Did the answer help you?YesNo
20. We buy an apartment in installments from the developer, not through a bank. Will it be possible to cover the rest of the mat? capital? If yes, how to do it?
20.1. Good afternoon, you can contact the pension fund if the child is over 3 years old... With respect to you, Evgeniy Pavlovich Filatov.
Did the answer help you?YesNo
20.2. Good day. Dear Irina, yes it is possible, for this you need to contact the pension fund with an agreement. All the best, good luck to you.
Did the answer help you?YesNo
20.3. Good afternoon. If the child is not yet 3 years old, then you will not be able to pay the balance using mat capital funds. Therefore, if the child is 3 years old, you can pay the rest of the mat with capital.
Did the answer help you?YesNo
20.4. — Hello, if the child is over 3 years old, then provide all the documents and agreements from the developer to the pension fund, and they will give you an answer. Good luck to you and all the best. :sm_ax:
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20.5. Hello Irina. If your child is already three years old, then it is possible to pay for the cost of the apartment with maternity capital. Show your agreement to the pension fund.
Did the answer help you?YesNo
I signed a contract for the purchase of an apartment at zero cycle, i.e. the house has not yet been built and I undertake to pay the prepayment in the contract 100% immediately
We buy an apartment from the developer using the DDU in installments. When will it be possible to register there?
Why doesn’t the developer provide temporary registration for an apartment that is on installment plan from the developer?
Is it possible to make a temporary registration in an apartment that is on installment plan from the developer?
Is it possible to make a temporary registration in an apartment that is on installment plan from the developer?
Is it possible to make a temporary registration in an apartment that is on installment plan from the developer?
Tell me what to expect, we bought an apartment by remote control, delivery end of 2020, and payment of the entire cost of the apartment,
Today we allocated shares to children in a purchased apartment using mat capital in the village,
A bankruptcy case has been opened against the developer and is under consideration (there are 3 cases from organizations in arbitration)
We took an installment plan for an apartment from the developer. But the delivery of the house has been postponed a second time.
Please help me figure it out. I am a citizen of Ukraine from a destroyed city in the Luhansk region, I received temporary asylum.
Buying an apartment from a developer: procedure
The scheme for buying an apartment in a new building for cash looks like this:
- Developer check. This is the most important stage.
- Conclusion of the DDU.
- Opening an escrow account. The bank is chosen by the developer. Typically, an account is opened with the bank that issued the construction loan to the company.
- Registration of preschool education in Rosreestr. An application from the developer and shareholder will be required. Everything is filled on the spot. You can contact the registrar directly or submit documents through the MFC.
- Payment according to DDU.
After this, you need to wait until construction is completed and accept the apartment, then register ownership.
Contents and sample agreement
When purchasing a new apartment, developers provide the DDU themselves; they already have developed samples.
What information should be reflected in the contract:
- Name and address of the organization, position of the person authorized to make the conclusion, details of the power of attorney, TIN, OGRN,
- Full name, passport details, date of birth of the shareholder.
- Construction permit details.
- The deadline for transferring the object to the shareholder.
- Conditional apartment number for the duration of construction.
- Information about the apartment: area, number of rooms, floor, house address.
- Rights and obligations of the developer.
- Rights and obligations of the shareholder.
- The developer is responsible for violating construction deadlines, and the shareholder is responsible for failing to meet payment deadlines.
- Payment order.
- Dispute resolution.
The developer will need the signature of an authorized person and a seal, while the shareholder will only need a signature. The agreement is drawn up in three copies: one remains with the parties to the transaction, the third is transferred to Rosreestr.
Agreement on shared participation in housing construction (ddu)
Documentation
To conclude a DDU and register with Rosreestr you will need:
- Shareholder's passport.
- Power of attorney from the developer's representative, passport.
- Constituent documents.
- Extract from the Unified State Register of Legal Entities.
- A document confirming the ownership or lease of the land participant by the developer.
- Project declaration with all changes.
- Construction permit.
- DDU.
- Plan of an apartment building under construction.
- Developer liability insurance contract.
- Certificate from the bank about opening an escrow account.
Expenses
The fee for opening and servicing the escrow is paid by the developer according to the tariff. On average this is 0.5-0.7% per year.
The state duty is 350 rubles. The parties independently determine who will pay for it.
Important! You can issue a power of attorney to a company employee, and he himself will submit all documents for registration. This is paid additionally, on average 20,000-30,000 rubles.
How to buy an apartment in a building under construction with a mortgage?
The algorithm for buying an apartment in a new building with a mortgage is slightly different:
- The buyer finds the developer, checks the documents and clarifies the terms of the transaction with him.
- A bank is selected and a mortgage application is submitted.
- After the application is approved by the bank, the DDU is concluded and registered with Rosreestr.
- A mortgage agreement is concluded with the bank, then the money is transferred to the escrow account.
Legal advice: to increase your chance of getting your mortgage approved, you should take a closer look at the bank’s partner developers. Before executing a mortgage agreement, the lender carefully checks the construction companies, and he will have more confidence in the partner.
Elena Plokhuta
Lawyer, website author (Civil law, 6 years of experience)
Contents and sample agreement
A DDU with a mortgage contains almost the same information as without it. But it must indicate the procedure for settlement with the developer and the details of the lender.
Documentation
To apply for a mortgage for a new building you will need:
- Borrower's passport.
- Help 2-NDFL.
- A certified copy of the work record.
- DDU.
Note! If maternity capital is used, a certificate and a certificate of the balance of funds on it from the Pension Fund are submitted to the bank. To confirm the down payment, you will need a payment order and a bank account statement.
Do you need a purchase and sale agreement?
We’ll show you how to draw up a contract correctly and avoid mistakes.
How to arrange the sale of an apartment between individuals in installments
Sellers and buyers of real estate may be attracted by the simplicity of the transaction, although sometimes there are significant risks for each of the parties. To eliminate the possibility of fraud, it is recommended to arrange the installment plan with the help of a notary .
The negative aspects of such a real estate transaction include:
- The seller is not able to receive the entire amount at once.
- The buyer may violate the contractual terms and not pay the full amount, then a trial will be required.
- There is always a risk of encountering scammers, in which case the seller may lose both money and the apartment.
The first is a short-term installment plan for 3-6 months, which is most often interest-free. The second option is an installment plan, which is issued for a long period - from 12 months or more, that is, long-term. In this case, the installment plan will be interest-bearing, the average rate is 12% per annum,” she clarifies.
In order to properly complete the transaction, both the apartment seller and the buyer need to know some of the features of this procedure.
If the parties have reached an agreement and approved all the terms and conditions regarding the payment procedure, you can proceed directly to drawing up the agreement.
In the form of an agreement for the purchase and sale of an apartment in installments, you must indicate the following:
- Details of the seller and buyer with contact numbers for communication
- Total amount required to be paid by the buyer
- Term and terms of payment by installments
- Amount of first and subsequent payments
- Frequency and deadlines for monthly payments (payment schedule)
- Consequences of late payments and periodically continuing installment arrears for the buyer (penalties)
- The condition that until the actual payment under the contract, the apartment is pledged to the seller
As General Director Maria Litinetskaya says, first of all, a buyer who wants to purchase an apartment in installments needs to decide which installment plan is right for him.
When concluding a contract, the buyer will have to provide:
- Passport of a citizen of the Russian Federation. If there are several owners, then such a document is needed for each.
- Certificate of income for a certain period (from approximately 6 months to 1 year).
- A copy of the work record book, certified by the head of the enterprise where the buyer works.
- A bank account statement or other documentary evidence that the buyer has money for at least the first few payments (which are usually the largest and range from 30 to 70% of the cost of the apartment).
Depending on the developer, other documents may be required. This point needs to be clarified separately each time.
Is it possible to sell an apartment in installments between individuals? How are registrations and payments made?
There are almost no differences from a regular real estate purchase and sale transaction. The parties also apply to Rosreestr with an application for the transfer of ownership of the apartment and an agreement, and the department, in turn, registers this transaction within the time limits established by law.
Since the seller personally does not have the ability to always control the buyer’s availability of funds necessary to make the next payment according to the agreement, there is always a danger of arrears arising in installments.
In addition, when purchasing an apartment in installments, there are no additional payments, including life insurance, bank commissions, adds the agency’s interlocutor.
The seller of the apartment risks being left without money if the buyer does not pay the money under the contract; during the time the buyer uses the apartment, its condition may worsen, which means the value on the market will decrease. In the event of litigation, additional costs will apply.
How to register property rights?
Registration of ownership is possible only upon completion of construction, when the developer already has permission to commission and a technical passport.
How it all looks step by step:
- The company receives all the documents, and a protocol for the distribution of space is drawn up.
- The shareholder accepts the apartment and signs the transfer deed.
- Documents for registration are submitted through Rosreestr or to the MFC.
- As a result, the owner receives an extract from the Unified State Register.
Documentation
To register property rights you will need:
- Application (filled out on site).
- DDU.
- Transfer deed.
- Mortgage agreement and mortgage, if the apartment was purchased with a mortgage.
- Technical passport.
State duty
For registration, the buyer pays a fee of 2,000 rubles.
What to look for when buying a new building?
Most often, people are interested in what questions to ask the developer when buying an apartment. First of all, you need to ask if he has a construction permit and design documentation, then read the documents.
It is also recommended to clarify:
- How developed is the infrastructure, how are things going with transport links?
- Are there any plans to build new facilities nearby?
- Are there agreements with energy companies and other companies providing services?
- Does the developer work with mortgage investors if a mortgage is planned?
- What materials is the house built from?
Legal advice: the developer can answer anything. It is better to check all the information yourself by requesting documents and familiarizing yourself with the infrastructure of the area.
Elena Plokhuta
Lawyer, website author (Civil law, 6 years of experience)
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How to check the developer?
First you need to check the documents of the construction company:
- Charter
- Extract from the Unified State Register of Legal Entities.
- Certificate of registration with the Federal Tax Service.
- Construction permit.
- Project declaration.
- New building insurance contract.
It would be a good idea to check information about the developer using several services.
For example, on the website of the Russian Ministry of Construction you can find out the number of houses sold by a company, its registration data, information about the manager, email address and telephone number of the reception desk. If the developer is not registered anywhere, information about him will not be there. This should alert you, it is better to refuse the deal. There is a possibility that this is a scammer.
Another verification option is the FSSP database of enforcement proceedings. If a construction company has debts, they will be reflected there. The presence of debt negatively affects the reputation; such a transaction must be treated with caution: there is a possibility that the developer will soon go bankrupt.
Note: you can check the construction company by reviews. It is better to ask them from those who have already bought apartments there. Ideally, these will be relatives or acquaintances. On the Internet there is a chance to run into custom reviews.
A lawyer's answers to questions about buying a home in a building under construction
Is it possible to buy an apartment in a building under construction and then sell it after the price increases?
Yes, this is often practiced. But it is not the apartment that is being sold, but the right to claim it under the assignment agreement.
Is my husband's consent required to purchase an apartment in a building under construction?
Yes, consent is provided in simple written form, because General money is used for purchases. It is usually required by the bank.
Is it possible to register a private trust for two shareholders?
Yes, this is not prohibited by law. The contract specifies their details, as well as the procedure for distributing financial obligations to the developer.
I am in one city, I want to buy housing in a new building in another. How to do it?
You can issue a notarized power of attorney for another person. He will deal with the procedure and negotiate with the developer independently, but on behalf of the principal.
The father was a shareholder and died before the house was put into operation. I am the heir. Can I become a member of the DDU instead of him?
Yes. Within 6 months from the date of death, you need to enter into an inheritance, obtain a certificate from a notary, and then come to the developer and conclude an additional agreement to the DDU.
Are you afraid of making a mistake in a sales transaction?
Lawyers will provide free advice on every step of the transaction and help you avoid mistakes
Agreement for the sale and purchase of an apartment with installment payment - important features
Option B (if the apartment is inhabited by persons who, in accordance with the law, retain the right to use this residential premises (family members of the seller or the seller himself) after its acquisition by the Buyer, then in accordance with clause 1 of Article 558 of the Civil Code of the Russian Federation they must be indicated in the contract ):
However, the seller will also have an independent contractual relationship with the organization that will transfer the funds. In the case of a mortgage loan, a loan agreement will be additionally concluded; in the case of maternity capital or another housing certificate, the certificate will become an auxiliary document. A reference to these documents in the purchase and sale agreement is required.
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