“Instead of defrauded shareholders, defrauded shareholders may appear” Federal legislators want to revive housing construction cooperatives

When buying an apartment in a building under construction, the buyer is faced with a choice of who to be: shareholder or shareholder. And when signing the contract, the buyer does not see the difference between these concepts. But in vain!

So, who are the equity holders and shareholders and what is the difference between an agreement on shared participation in construction (DDU, buyer-shareholder) and an agreement concluded with a Housing Construction Cooperative (HBC, Buyer-Shareholder)?

Shared construction is currently the most common way to purchase an apartment in a building still under construction. Under a shared construction agreement, one party, the “Developer,” undertakes to build, put the building into operation and transfer to the second party, the “Shareholder,” its “share”—an apartment, according to the agreement.

Housing cooperative agreement is a voluntary association of citizens who carry out their activities on the basis of constituent documents by contributing a share.

Let's look at some of the differences between these two agreements.

Differences between DDU and housing cooperative agreements

The Share Participation Agreement is subject to mandatory state registration, and this is the first difference from the purchase and sale agreement concluded with a Housing Construction Cooperative (HBC). Agreements concluded with housing cooperatives are not registered, and this does not provide any guarantee that your apartment will not be resold several times.

When concluding a DDU agreement, shareholders can, if the developer fails to fulfill the terms of the agreement to transfer the apartment on time, recover a penalty from the latter on legal grounds. But the relationship between the shareholder and the housing cooperative is based on membership; the law does not provide for the collection of penalties from the housing cooperative; moreover, shareholders are even obliged to cover losses incurred by the housing cooperative. In contracts with housing cooperatives, the terms for the delivery of an apartment are extremely “blurred” or there is a clause in the form of the phrase “approximate date”, thus, we are talking about an indefinite period of transfer of the apartment to the shareholder.

As for the cost of real estate, in this case the DDU agreement, as a rule, guarantees that the price of the apartment is fixed and will not change. An agreement with a housing cooperative often provides for changes in the cost of living space. In addition, shareholders are often forced to bear additional expenses.

When constructing a housing cooperative, the shareholder has the right to live in the apartment, paying his share. Under DDU, construction participants do not have such a right. Shareholders can dispose of real estate only after paying the entire amount.

Thus, when purchasing an apartment in a building under construction, it is still worth paying attention to who you are entering into an agreement with and who you are a shareholder or shareholder under the agreement. It is necessary to compare the pros and cons of the DDU and housing cooperative agreement and choose for yourself the best option for purchasing an apartment.

The author of the article is Anastasia Yuryevna Denisova, Senior Legal Adviser

At first glance, the difference between a shareholder and a shareholder is erased - in fact, what is the difference when we are talking about buying home ownership in both cases?

And developers, when purchasing a certain property, do not offer such a choice. However, in the primary housing market, there are still various forms of real estate purchases, the intricacies of which must be understood in order to competently assess various risks: changes in construction time, cost, the fact of delivery of the object or non-delivery.

Ddu or housing complex

Ddu or housing complex

: if you have ever thought about what new buildings to invest in, this question has probably arisen before you. Nowadays, an apartment in a new building can be bought either through participation in shared construction or through membership in a housing construction cooperative as shareholders.

DDU or housing cooperative - both of these schemes for investing money in a new building are legal, but the laws that regulate the relationship between the developer’s shareholder and the relationship between the shareholders of the housing cooperative are different. Therefore, what to choose: DDU or housing complex

– this is not an idle question.

Any developer who is going to raise funds for the construction and sale of apartments works through the DDU or housing cooperative

.
DDU is an agreement for shared participation in construction
.

According to it, the developer undertakes to build an apartment building within a certain period of time, put it into operation and transfer the apartments to shareholders, those citizens who invested money in the construction. An agreement on shared participation in construction is required to be registered.

Housing cooperative is a housing construction cooperative - a community of citizens that manages the construction of a house and collects funds for this construction. The housing cooperative agreement does not have to be registered with the Federal Reserve System.

To choose a preschool or housing complex

, you need to know the main differences between these agreements.

Differences between a DDU agreement and a housing cooperative agreement

Differences between preschool and housing cooperatives

There are five main differences between DDU and housing cooperatives:

• State registration of the DDU agreement is mandatory. State registration of an agreement with a housing cooperative
  is optional.
• The cost of building a residential building or housing complex
  varies. According to the DDU agreement, the cost of building an apartment is fixed. It is fixed in the contract and the developer cannot unilaterally change the price of the apartment for the shareholder. The cost of an apartment in a housing cooperative may change, and, alas, upward. According to the housing cooperative agreement, the developer or housing cooperative has the right to unilaterally change the price of the apartment if the developer incurs additional costs.
• The construction period under the DDU agreement is specified in the agreement. If the developer does not put the house into operation by the time specified in the contract, the shareholder has the right to collect a penalty from the developer, terminate the agreement for shared participation in construction, and receive back all the money invested in the construction. The construction period is specified in the housing cooperative agreement. But, if the construction deadline is postponed, the shareholder most likely will not be able to recover money from the developer in court. At the very least, we can say for sure that without a real estate lawyer
  who specializes in
  litigation with housing cooperatives
  , the shareholder will definitely not be able to collect a penalty for missed construction deadlines.
• Installment payments for the construction of preschool facilities are possible. Installment payment for construction in housing cooperatives is also possible, and even more, it can be issued for a long period. Interest on installment plans for shareholders is indicated in the agreement and is directly regulated by the charter of the housing cooperative.
• Termination of the DDU
  is possible, and the shareholder will receive back all the amounts invested in the construction. Termination of the contract with the housing cooperative will result in the return of only part of the invested funds for shareholders. Shareholders should carefully read the charter of the cooperative and the housing cooperative agreement before investing money in construction. These two documents indicate that upon termination of the contract with the housing cooperative, shareholders will not be returned part of the contributions or the entrance fee, or some other conditions are specified: recovery from the shareholder for the terminated contract.

DDU or housing cooperative: pros and cons

DDU or housing cooperative: pros and cons

To summarize, participation in construction under a DDU agreement has a number of good opportunities for the shareholder:

DDU capabilities

• The developer's documents are checked and approved at the state level. The buyer of an apartment in a new building under the DDU is protected by law in the sense that the housing will not be secondary, exactly what is specified in the contract, in the project documentation.
• The cost of the apartment under the DDU agreement will not be changed by the developer without agreement with the shareholder. That is, if the shareholder does not agree to increase the price of the apartment, it will remain the same.
• The shareholder under the DDU has a guarantee for the quality of the housing constructed, a construction period has been determined, and there is an opportunity to collect a penalty.

Risks of the shareholder

• When registering an apartment, there may be red tape in the documents.
• The reasons for termination of the contract are described in it, and do not provide for termination of the contract at the initiative of the shareholder without obvious reasons: violation of the terms of the contract on the part of the developer.
  If the shareholder terminates the contract on his own initiative, not because the developer has violated his obligations, he pays the damages to the developer. The shareholder may receive the amount back minus 6-8% of the cost of the apartment.
• Installment plans for DDU are given for a period of no more than five years.

Housing cooperative - has its advantages

Quick execution of an agreement with a housing cooperative, construction control and access to housing cooperative documents, installment payments for an apartment for 5 years or more. If housing cooperatives are doing well, utility bills may be reduced.

Risks of shareholders and equity holders – which is worse?

USSR influence

In essence, a housing cooperative is a voluntary association of citizens based on membership in order to solve their housing needs. To join a housing cooperative, a citizen writes an application and pays a special fee. True, a member of the cooperative can become a contender for ownership rights after paying out a share (when he himself becomes a full-fledged shareholder).

Actually, housing cooperatives as a variant of a consumer cooperative are a legacy of the USSR. Issues of obtaining housing in a similar way were settled in the Housing Code of the RSFSR. At that time, all housing cooperatives were controlled by the state. When the transition from a command economy to a market economy took place, this structure turned into the Housing Code of the Russian Federation (and without taking into account the economic changes in the country).

Characteristics of housing cooperatives

The advantages of purchasing housing under this scheme will be as follows::

1. Fast registration. The agreement does not require state registration.
2. Open access to construction documents, control of each stage.
3. Long installment plan.
4. Reduced utility bills due to the fact that shareholders receive a certain profit from the fund.

There are also certain risks:

1. If construction deadlines are not met, there are no fines for the housing cooperative itself.
2. The price of the property may increase while the contract is in effect.
3. Restrictions on resale of shares.

In the next video we will tell you how to buy an apartment in a housing cooperative without risk:

Now, having learned about preschool and housing cooperatives and their differences, let's talk about what is better to choose.

Let's look at the pros and cons of participating in housing cooperatives?

Pros:

• You can repay the share gradually, and therefore you will not need to take out a mortgage
• There is an opportunity to own and use the living space even before the full payment of the share
• Typically, purchasing living space through housing cooperatives is more affordable
• Joining a cooperative is easy and there is no need to register an agreement

Minuses:

The disadvantages of the above-described design manifested themselves in practice. For example, construction companies, thanks to a number of “blank spots” in the legislation, began to create directly or partially affiliated housing cooperatives in order to avoid ensuring the rights and guarantees of citizens that are established by the law on the protection of consumer rights:

1. Since the basis for changing the deadline for delivery of an object, as well as prices, payment procedures, and so on, are regulated by the charter of the cooperative, and not by law, the cooperative begins to abuse its rights
2. It is not possible to demand a penalty or fine for violation of obligations, as well as elimination of deficiencies in work
3. It is worth mentioning the additional responsibilities that the charter of the cooperative provides for: personal participation, various prohibitions.
4. Since the agreement with the housing cooperative is not registered, there is a chance of a double sale of the same object.

Developers and shareholders: definition

Before deciding whether shared construction or housing cooperative construction is better, you need to understand what these 2 concepts mean . Developers of housing cooperatives are individuals or organizations who are fully responsible for the process of repair, construction or reconstruction of any real estate. It doesn’t matter whether these properties are rented out or used for personal residence.

Developers can be both construction companies and investors . As a construction company, they are called client-developers. They carry out construction work.

Shareholders are another concept related to construction . If we use legal concepts, then shareholders are not people who want to buy an apartment. And people who, together with the developer, want to complete construction, sell the property, and then receive income. People who want to buy an apartment are called consumers .

Shareholder: changes

The shortcomings listed above contributed to the emergence of a new legal structure, namely participation in shared construction. The agreement for participation in shared construction includes the developer’s obligation to transfer the property within a certain period of time. The shareholder must accept it and pay.

Risks in equity participation are minimized; one might say, they are absent altogether (unlike housing cooperatives). The law provides for such provisions as the impossibility of changing the terms of the term by one party, guarantees of protection and quality, fines for violations, registration of the contract, and so on.

But, given the global positive aspects of being a shareholder, it is difficult to feel completely safe.

6677 Igor Vasilenko

Today in the primary real estate market, the most common way to purchase housing is to conclude an agreement for participation in shared construction (DDU)

between the developer company and the shareholder, and the buyer’s entry into a housing construction cooperative
(HBC)
. In today’s article, we will talk about the advantages and disadvantages of each of these methods of buying a home, and we will try to figure out which one is better to give preference to.

Each of the methods mentioned is absolutely legal and is accompanied by relevant legislation. In the first case, the relationship between the shareholder and the developer is regulated by Federal Law-214, and in the second case, when the buyer joins the cooperative, Federal Law-215 is in effect.

What is housing cooperative

This form of cooperation involves the creation of a voluntary community, whose participants buy apartments in the building being built and become shareholders. They receive ownership of the new living space on the basis of a certificate from the housing cooperative about full payment of the share contribution. By concluding a housing-construction cooperative agreement, people independently collect money and organize construction work. This allows them to save on the cost of living space, paying in fact only for the purchased building materials and work performed. All relationships between the housing cooperative and the members of the cooperative are determined accordingly by the Charter and the Participation Agreement.

A housing cooperative is created for the construction of a specific building. To pay for construction work, shareholders can use both their own funds and a bank loan. Unlike shared housing cooperatives, housing cooperatives are a more cost-effective way to purchase new housing. To pay for construction, housing cooperative participants create a mutual fund, into which they undertake to contribute a certain amount every month. At least a year is allotted for fundraising.

What is the idea of ​​shared and cooperative construction?

The idea of ​​shared construction (within the framework of preschool education)

lies in the fact that the company attracts money from shareholders
(funds that, in essence, are an interest-free loan)
, builds apartments with this money and makes a profit. Shareholders, in turn, receive housing below market value for the funds provided.

The relationship between the shareholder and the developer is regulated by the provisions of Federal Law 214, which impose rather strict restrictions on the developer.

If the developer violates the rights of the shareholder in any way, he can defend his interests in court.

The idea of ​​​​building cooperative housing (within the framework of housing cooperatives)

lies in the fact that citizens collect funds and organize construction work themselves
(hire a contractor, entrust him with the purchase of building materials, control quality, etc.)
.
On the one hand, participants can receive their apartments at a lower price (than under the DDU)
, since there is no profit for a third party, payment is made for work performed and construction materials purchased.
But, on the other hand, the law (FZ-215)
cannot protect citizens from them, because they themselves build housing and decide for themselves how and in what order this should be done.

Shareholders turn into shareholders

Rising real estate prices are forcing developers to look for new means of attracting investment. One of the tools is the creation of closed real estate mutual funds (REF). This year there is a real boom in the closed-end mutual fund market. If just a year ago there were only 70 funds, the total assets of which amounted to 17.2 billion rubles, today there are already 150 of them registered, and their assets reach 53.4 billion rubles.

Invest in Russian

Given the variety of strategies and projects that are used in closed-end mutual funds, it is impossible to evaluate the entire market, however, as analysts believe, over 70% of investment funds' investments go to development projects. The standard scheme for forming such a closed-end mutual fund is as follows: the real estate itself is contributed to the fund as the main property after its preliminary assessment, and then funds are raised to finance construction or reconstruction. Upon completion of the work, the fund sells the object and redeems the shares. At the same time, a distinctive feature of closed-end funds is that shareholders who actually become co-investors in construction do not have the right to demand redemption of shares before the date specified in the fund rules. Thus, the owner of the property (as a rule, he becomes the initiator of the creation of a closed-end mutual fund) is insured against the withdrawal of funds from the project.

An advantage of closed-end mutual funds is also the ability to minimize taxation. A closed mutual fund is neither a legal entity nor an individual and, therefore, is not a taxpayer. This means that there is no income tax on transactions with the fund’s property. Consequently, the manager can reinvest the income received from one project into the next one (within the same fund), without incurring additional tax expenses. Moreover, a closed-end mutual fund can help optimize payments for personal income tax (NDFL), postponing the occurrence of obligations to pay it to the time of redemption of fund shares. The effect of such deferred taxation will be greater the more times the mutual fund's funds are reinvested and the longer the period for which the fund is created.

In contrast to the same scheme of shared construction, a closed mutual investment fund allows one to avoid such disadvantages as the need for state registration of each shared participation agreement, the inability to raise funds before the start of construction, the risks of dishonesty and bankruptcy of developers. In particular, a company managing a closed-end fund may not engage an external developer, but independently enter into construction contracts, thereby significantly reducing transaction costs.

Closed mutual fund is also convenient to use when it comes to selling an unfinished property. In this case, the goods may also include initial permitting documentation and contracts with contractors. Transaction terms are also significantly reduced. “To sell an unfinished object, it usually takes at least six months, and it is necessary to stop construction and register ownership of the unfinished object, assessing its value,” explains Sergei Vasin, director of the real estate funds department of Troika Dialog Management Company. And this automatically means additional costs: for paperwork, for paying fines to contract workers, etc. By selling shares of the fund that owns the facility under construction, all this can be avoided. Moreover, you can simply use a closed mutual fund to resell the property, while trying to get additional income. True, we are talking about the sale of fund shares, and not directly square meters. In this case, the seller sells the object in parts, dividing it into shares. This allows you to optimize taxes, since transactions with securities are not subject to VAT.

Mutual funds are reaching for the ground

Speaking about closed-end mutual funds, one cannot fail to mention land funds. Using their example, one can show how a shareholder can receive additional profit by revaluing the real estate contributed to the fund. In the absence of a market for the purchase and sale of land and unified mechanisms for the formation of its value, land plots remain the most undervalued asset, and this non-renewable and undervalued resource has been growing in price over the past few years by 20-50% per year. Therefore, it is natural that more and more funds are appearing on the market investing in suburban areas (in particular, agricultural land). At the same time, the strategy of most closed-end mutual funds is based on the subsequent resale of plots or their rental.

The first land closed-end mutual fund appeared on the market last summer - participants in the Russian Landowner fund, formed by Agana Management Company, were offered to make money on the undervaluation of agricultural land. And already this year, the number of similar funds offering to make money on the growth of the capitalization of the property by transferring land from one category to another has exceeded a dozen.

As practice shows, the capitalization of the land fund, whose assets include agricultural land, can grow significantly. For example, if, in the absence of data on prices of similar plots, the land was assessed on the basis of its cadastral value. A similar scheme was used by Veles Management Management Company, which formed the Veles Podmoskovye closed mutual fund at the end of August this year, whose assets included plots in the Klin and Volokolamsk districts of the Moscow region. The management company decided to put the fund's property up for auction and calculated that the starting price could be 260 thousand rubles per hectare. According to experts, if the fund manages to sell all land plots at this price, the value of the closed-end mutual fund's assets will increase five to seven times.

But the example of closed mutual fund Veles Podmoskovye is still rather an exception to the rule. As Stanislav Brodsky, managing director of Veles Management Management Company, notes, the valuation of objects included in a closed-end mutual fund may indeed differ from the cost of their acquisition by the shareholder, therefore, from the outside, such schemes may seem extremely profitable. But it is far from a fact that the initial assessment of the cost of the plots will correspond to the amount of expenses of shareholders for their acquisition, and subsequent assessments will correspond to the price of the plots at which they can be sold.

“The problem is that, with rare exceptions, statistics on the prices of transactions with land plots are not available, so the assessment of the value of plots is carried out using various mathematical methods or on the basis of the normative and cadastral value of plots, which in most cases differ from their market value,” says Stanislav Brodsky.

Therefore, a more common strategy among land closed-end mutual funds is participation in development projects. We are mainly talking about cottage and country house construction. If an investor has a plot of land where a similar project can be implemented, he usually contributes the land to the assets of a closed-end mutual fund, and then the management company enters into an investment contract with the development company. Upon completion of the project, the cottages and the land under them will be sold. Moreover, the income received from such a project is also not subject to income tax and can be further reinvested. According to experts, using closed-end mutual funds to implement projects in the field of suburban real estate is a very profitable idea that allows you to legally save on income tax.

Using a real estate closed-end mutual fund to implement development projects with land plots can be interesting from the standpoint of not only optimizing taxation, but also attracting funds from third-party investors. Thus, transferring land plots to the fund and raising money for a number of activities that increase the value of land (for example, construction) are an alternative to bank lending and other borrowing. At the same time, sharing part of the profitability with investors may ultimately turn out to be cheaper than borrowed money, and also does not require collateral.

The creation of a closed-end mutual fund is also relevant if non-residents act as potential buyers of land. According to current legislation, foreign individuals and legal entities do not have the right to acquire land ownership, but at the same time there are no prohibitions for foreigners to acquire investment shares of funds whose assets are agricultural land. “Non-residents in such funds receive, as it were, secondary rights, although formally they become title owners, but by virtue of trust management, they do not have the owner’s powers of use and disposal, since these functions are performed by the management company on behalf of the fund and in the interests of the owners of investment shares,” - explains Deputy General Director of Solid Management Management Company Evgeniy Kravchenko. Thus, the participation of foreign investors is reduced only to shared ownership of agricultural land and receipt of income.

Lure for investors

The income of a construction closed-end mutual fund is generated both by the increase in the cost of the object under construction and by the increase in real estate prices on the market. The range of returns on closed-end mutual funds can be 20-80% or higher (while rental funds usually earn 15-20%). According to Nikita Ivanov, executive director of Otkrytie Management Company, the most successful development projects can bring shareholders income of up to 200% per annum. And this is far from the limit, since, according to analysts, in the first six months of this year alone, the ruble return (net of inflation) on investments in Moscow apartments was about 30%.

However, unlike rental funds, where you can easily trace the connection between rental rates and changes in the value of the share, profit in such funds is formed due to the revaluation of the property. According to Stanislav Brodsky, it is possible to judge the real profitability of a real estate fund only after its termination and completion of payments to shareholders. Interim results calculated on the basis of the share price are conditional, since in this case the size of the closed-end mutual fund's assets is determined based on the estimated value of the property, which may differ from its actual sale price.

Nevertheless, it is the potential profitability of closed-end mutual funds that often serves as a guide for investors trying to participate in a development project. And it should be noted that recently many companies forming closed-end real estate mutual funds have begun to lower the entry threshold for shareholders. For example, in the spring, Finam Management Management Company announced the start of the formation of the Hotel Real Estate fund. The minimum investment amount was 14 thousand rubles. The fund plans to invest shareholders' funds in the construction of hotels.

If necessary, the fund management company may announce additional issues of units. This is a fairly common strategy in the closed-end mutual fund market: this is how funds are gradually raised for a facility under construction. In particular, to continue the construction of a residential complex in Moscow, they plan to attract funds from investors from the Privat Square funds (Collective Investment Management Company) and Capital Invest - First Real Estate Fund (Capital Invest Management Company).

It should be noted that by attracting money from third-party investors to the project, the owner of the real estate is insured against possible risks associated with their participation.

“Formally, in a closed-end real estate mutual fund, the rights of all shareholders are equal, although some categories of shareholders are granted extended rights (owners of more than 10%.— BG

). However, the investment process itself completely excludes the participation of shareholders in it, therefore, regardless of whether it is a majority shareholder or a minority shareholder, all decisions are made by the manager, and the shareholder cannot influence the decision-making process,” comments Nikita Ivanov.

Shareholders of a closed-end fund do not become co-owners of the property. At the end of the fund’s term, the management company must sell the property to investors, which, say, may be affiliated structures of the owner of this property. Thus, the owner is forced to share only the fund’s income with co-investors, while actually remaining in the shadows. This is especially important given the corruption of the real estate market and the high risks of raider attacks.

According to the deputy general director of AllianceRosno Asset Management, Dmitry Vasyutinsky, a closed real estate mutual fund is completely protected from raiders, but only if the shareholder who paid for the shares with real estate was himself a bona fide owner of the real estate and had the authority (in the case of a legal entity) to alienate the property . In any case, the owner of a property, having contributed it to a closed fund, has the opportunity to disguise himself. In this case, ownership rights are transferred to the fund, and information about shareholders and their shares in the closed mutual fund is closed. “Even if the raider receives this information, then, having bought shares, he will still not be able to become the owner of the object, because according to the law, real estate is the object of common shared ownership of the fund’s shareholders and cannot be transferred to the ownership of a specific shareholder. On the other hand, a closed mutual fund is not a legal entity, so it is impossible to sue it. It is generally pointless to sue the management company, on which most investment decisions depend, since these assets are not the property of the manager. In fact, all closed-end real estate mutual funds can be classified as an asset securitization instrument, which is based on a trust management scheme. Russian legislation does not contain general rules governing securitization transactions, however, the transfer of a real estate asset at an estimated value to a closed mutual fund is such. The person who transferred real estate to the fund receives investment shares of such a fund, while the calculated NAV of the fund shows the real capitalization of the property,” explains Evgeniy Kravchenko. According to him, investment shares can also be the subject of pledge, and the pledge of shares is carried out much easier and faster than the pledge of real estate, the technology of pledge of shares is similar to the pledge of shares. In addition, if the investment shares of the fund are traded on the stock exchange and have recognized quotations, the percentage of bank reserves for such shares may be less than the interest on real estate.

OLEG KULYASOV

Price component

Housing in a housing cooperative can be purchased cheaper than from a developer under the DDU. Within the framework of shared construction, there are certain restrictions that cause a higher cost of real estate compared to cooperative housing:

Firstly,

the developer must not only recoup expenses, but also make a profit, otherwise his activities become meaningless. Construction by a cooperative has different priorities; participants need housing, so the primary task is to cover construction costs;

Secondly,

The developer, when selling housing, is forced to include VAT in the price.
Self-construction (by a cooperative)
is not subject to value added tax;

Third,

the developer cannot avoid the costs that arise when insuring his liability to shareholders; the law obliges to insure risks, and the costs are also included in the price of housing. There are no such requirements for housing cooperatives; however, the lack of transaction insurance significantly increases the risks of cooperative members.

Differences in cost and payment

The DDU and the assignment agreement differ from each other in their cost and methods of payment. As a rule, the cost of the assignment is always higher than the price of the main contract. And there are several reasons for this. The price of the DDU is equal to the cost of the apartment. This cost, as one of the components of the DDU price, includes the developer’s services for the construction of the facility. It is fixed throughout the entire period of the contract. In cases where the final mutual settlement is provided for in the DDU after measurements of the finished residential premises, due to a change in the area of ​​the property, the final price may also change.

An assignment agreement is almost always made on a reimbursable basis and, in addition to the price of the DDU, includes the cost of the assignment itself. The buyer pays a fee to the seller for the opportunity to obtain his rights to the housing under construction.

There is another important point here, which depends on whether the full cost of the apartment has been paid to the developer or not. If the seller still has a debt, an assignment is possible under certain conditions: in addition, you will have to draw up an agreement with the buyer on the transfer of the debt obligations of the previous shareholder to him. Without an agreement on the transfer of debt, the assignment agreement will not be registered with Rosreestr and, accordingly, will be considered not concluded.

In addition, if there are debts, the developer intervenes in the relationship between the former and the new participant, from whom he is required to obtain consent to the transaction. It is also mandatory. Consent, as a rule, is paid; this is an unspoken rule of developers, who usually take from 1 to 5% of the cost of the apartment. This amount, of course, does not appear anywhere in the documents.

It should be noted that according to generally accepted rules, in the absence of payment debts, the transaction can be completed without the permission of the developer. However, often there is a condition in the agreement that obliges the developer to provide consent, and it is better not to risk getting consent in order to later avoid problems when registering the assignment agreement in Rosreestr. Practice shows that this condition exists in almost every preschool education system.

Quality guarantees

The quality of construction is one of the most important parameters by which potential equity holders/shareholders often choose a new building.

Purchasing under the DDU presupposes that the shareholder is a consumer, therefore he is protected by the Consumer Rights Law.

In turn, a member of the cooperative (housing cooperative)

it is not, because a member of a voluntary association, in fact, consumes his own services. Thus, the court will not help protect the rights of the cooperative participant regarding the quality of housing and other construction parameters.

According to the DDU, the developer bears warranty obligations to the shareholder for five years. That is, if, after a certain time after accepting the apartment, the shareholder identifies shortcomings, the presence of which could not be determined at the time of transfer of housing, the developer is obliged to eliminate these shortcomings. Warranty period, which must be specified in the DDU (according to Federal Law-14)

is 5 years. In turn, housing cooperatives cannot be forced to eliminate shortcomings, since Federal Law-215 does not say anything about the warranty period.

Features of the equity participation agreement

Currently, shared construction contracts are divided into two types:

1. Old ones received before April 1, 2004.
2. New ones received after this date.

New documents are needed in order to attract more shareholders. Concluding this agreement is cheaper than the old one. But the program itself becomes more reliable.

Before signing an agreement, you need to carefully study your future partners . This applies even to previous constructed facilities and other operating results. The construction of a building is illegal if even this simple information is missing. Specialized acts must also be present.

There are a few more rules that are important for a potential shareholder:

1. Be sure to study the design documentation.
2. The same applies to documents related to ownership of the land where construction is taking place.
3. It is necessary to trace the entire chain if the building is sold by another company on behalf of the developer.
4. Funds are deposited into the DDU account not through a cash desk, but during a personal visit to one of the bank branches.

Participants in the DDU agreement receive the following benefits:

1. The developer is guaranteed to have all the necessary documentation.
2. The developer does not have the right to unilaterally change the price.
3. Precisely specified requirements for payment of penalties and termination of the contract.
4. Home warranty from developers.

But some problems may arise:

1. Registration may take three months or more. Accordingly, until this procedure is completed, it is impossible to obtain documents for the apartment.
2. The buyer pays fines to the construction company if he terminates the contract unilaterally.
3. There is an installment plan for purchase, but it is given for a maximum of 5 years.
4. All money must be paid by the time construction is completed.

How to correctly conclude an equity participation agreement and what violations are most common:

Double sale protection

The DDU must be registered with Rosreestr, thus eliminating the possibility of multiple sales of the same apartment. Technically, something similar can happen, for example, an apartment will be sold once under the DDU, and the developer will sell it to several more clients under the Preliminary Sale and Purchase Agreement. But the shareholder who signed the DDU will be unconditionally recognized by a court decision as the sole owner of the property, and the remaining “applicants” will search for the truth for a very long time.

Joining a cooperative does not require mandatory registration of an agreement, so it is quite possible to sell an apartment to an unlimited number of buyers, although this is impossible to verify.

It is necessary to understand that the housing cooperative does not provide protection against fraud on the part of the cooperative management.

The main differences between housing cooperatives and DDUs

How does a housing cooperative differ from a preschool building? The differences lie in the content and text of the contracts, as well as in such concepts as :

1. Termination of the contract.
2. Installment plan for construction.
3. Timing of construction work.
4. Construction cost.
5. State registration.

Registration with Rosreestr is a prerequisite for preschool education . This is necessary in order to secure participants from repeat sales. Housing cooperative agreements do not have such protection. The full cost of purchased housing for preschool children is mandatory . It cannot be changed during the entire term of the contract. For housing cooperatives, the price of construction may increase if the developer faces additional expenses.

In addition, the DDU requires a clearly defined time frame within which the facility will be built . Developers pay penalties and fines if they do not meet this deadline. Housing cooperatives simply do not have this clause.

Until the completion of construction, the buyer can use installments if he has entered into a DDU agreement . Housing cooperatives also have installment plans, but for a longer period. But a certain interest rate already applies here.

Finally, under shared construction agreements, developers themselves are obliged to deliver all the necessary papers to the Office of the Federal Registration Service. And this must be done before the object is implemented. At the same time, it is important to maintain open access to certificates and contracts. Housing cooperatives should not comply with such requirements .

Below we will talk about the features of preschool and housing cooperatives in detail.

Protection against changes in the contract

The shareholder may refuse changes to the DDU, and then the developer, in court, will have to return to the shareholder the amount paid at the time of conclusion of the agreement or pay a penalty (offer other ways to resolve the problem).

Federal Law-214 obliges the developer to indicate in the DDU all the parameters of the future apartment - the number of square meters, the cost per square, the total cost of living space, layout, type and quality of building materials, utilities, etc. If during the construction process there is a desire or need to change anything (for example , replace expanded clay block with cinder concrete, double-glazed windows with wooden frames)

, changes can only be made with the consent of the shareholder.

In the Participation Agreement (HCS)

making changes is much easier; it does not require the consent of each of the participants; the board of the cooperative only needs to obtain the consent of the majority.
Various methods can be used to achieve this, and often the proposal looks like an ultimatum (for example, if a decision is not made to make changes, additional funds will have to be raised, since the existing ones are no longer enough)
.

That is, a cooperative participant may, upon completion of construction, receive something that is not exactly what he originally expected (for example, less square footage, a different quality of housing, etc.)

and no one will be held responsible for this, the cooperative will not compensate for either moral or material damage.

Additional meters

Before receiving a certificate of ownership, a control measurement of the apartment must be carried out with the participation of a BTI employee. In the case of a shareholder, additional square meters must be paid by him without fail.

If you receive an apartment under a shared agreement, then if there are differences in the paid and received square meters, it is possible:

• declare a refusal to obtain ownership rights to this housing with a further demand for payment of a penalty;
• pay extra for extra square meters and also demand payment of a penalty;
• point out to the developer the mistakes made during construction and demand that the cost of the apartment be reduced so that the difference in amounts is equal.

Refund, penalties, compensation

Residents of Saratov remember the high-profile case of how the chairman of the Kapitel-2002 housing cooperative left 274 participants without apartments, while about 160 million rubles were stolen, and construction stopped at the level of the eighth floor. Needless to say that the cooperative members never received any compensation?

According to Federal Law-214 (amendments that came into force in 2017)

The development company must be a member of a self-regulatory society, have an authorized capital and pay contributions to the compensation fund
(common for all developers)
.
In the event of bankruptcy of the developer, all payments in favor of shareholders will be compensated with funds from this fund. That is, if at the time of bankruptcy the house is not completed or put into operation, the shareholder can expect that the money will be returned to him or the house will be completed (in such cases, the SRO can transfer the property to another developer)
.

In such cases, achieve something from the cooperative (housing cooperative)

problematic.
The housing cooperative will be able to return the money only if it is in the account (although the fact that construction has stopped in itself indicates a lack of money)
.
Of course, you can’t count on additional payments (penalties, compensation)
, the return procedure is determined by the cooperative itself; if a cooperative member manages to return at least part of it, that will be very good.

To be fair, it is worth noting that the new amendments to the DDU are still only at the implementation stage, but there are already mechanisms that make it possible to ensure payments to shareholders - this is liability insurance and a bank guarantee.

In the case of housing cooperatives, insurance is not a mandatory requirement. So, if the management in organizing construction work turns out to be ineffective (which cannot be ruled out, since members of the board of the cooperative are not necessarily professionals in the construction market)

, and there is not enough money to complete construction, then you will either have to find additional funds or try to somehow realize the unfinished project.

What is the difference between buying an apartment in a new building under the DDU, housing cooperative and gray schemes?

The safest scheme for purchasing apartments in new buildings is signing a DDU, or equity participation agreement.
The norm, which is regulated by Federal Law No. 214, protects the buyer from double sales and gives a better chance of getting a profitable mortgage.

However, you can buy an apartment in Moscow using DDU only in 60% of new buildings. What sales schemes do other developers use? And why do they choose them?

The funds of the shareholders are directed to a specific object, permitting documents guarantee that the construction is legal and that the project has passed all approvals and examinations. But issuing a building permit is a complex and often delayed process, so many companies prefer to open housing sales without yet receiving the document.

In addition, the DDU to some extent “ties the hands” of development companies, and this situation is not suitable for everyone.

Not everyone is ready to switch to working under 214-FZ, because this is an additional responsibility of the developer to the shareholders, since the buyer can terminate the contract at any time if the deadlines are not met. The developer must be as open as possible and must report regularly, which does not suit everyone. Alexey Kharitonov, YIT City Stroy

In addition, each equity participation agreement must be registered with Rosreestr. And this procedure also takes time. As a result, the shareholder’s money gets stuck on the way to the developer, who is forced to look for other sources of construction financing. Therefore, companies resort to other sales schemes.

DDU: the developer’s liability is regulated

DDU is a scheme that best protects the rights of the buyer. Sales by DDU confirm that the project has been approved by all authorities. If the developer fails to complete the task, the shareholder can terminate the contract and claim a refund and a penalty.

Pros: mandatory state registration. Guaranteed protection against double sales. Opportunity to take out a profitable mortgage (banks regard new buildings with sales under DDU as low-risk objects and are willing to lend to them).

Cons: you cannot arrange installment plans for the period after construction is completed. DDU does not guarantee that the project will be completed. Such an agreement does not protect against violation of construction deadlines.

DDU is not able to protect the buyer, for example, from surcharges for “extra meters” that appeared during the construction process, poor quality of the apartment recorded during the acceptance of work, as well as failures in construction deadlines, which the developer has the right to shift an unlimited number of times, having warned the shareholder in advance. Alexey Kharitonov

Housing cooperative: more freedom - less guarantees

Another legitimate scheme for the sale of apartments, provided for by 214-FZ. About 5-6% of new buildings in Moscow and the Moscow region are sold through housing cooperatives. The scheme is popular with large developers (PIK Group, Vedis Group) and has proven its viability in the real estate market.

Pros: the register of shareholders protects against double sales. Possibility of long-term installments (even after putting the house into operation). The ability to influence the progress of construction (for example, to complete a house on your own in the event of bankruptcy of the developer).

Cons: the agreement is not subject to state registration. Ownership is registered only after full payment of the share. Compliance with construction deadlines is not monitored. The developer cannot be held liable in case of violation of agreements.

The disadvantage of the scheme is the lack of liability of the housing cooperative for violation of the deadlines for commissioning and transfer of the facility to the shareholder. And if the house is not completed due to insufficient funding, the buyer will only be able to make a claim against the housing cooperative. This means that he himself, as a member of the housing cooperative, will have to additionally finance the construction. Konstantin Plyukhin, Est-a-Tet

Certificates: almost never used

The developer issues securities (certificates), the denomination of each of which corresponds to the price of the apartment. The developer undertakes to transfer the apartment to the certificate holder later.

Pros: the developer must register the title to the land and obtain a building permit. The state controls the activities of the developer as a participant in the financial market.

Disadvantages: in general, it is inconvenient for both the developer and the buyer, so the scheme is used extremely rarely.

Gray schemes for selling housing

They are used along with legal sales mechanisms. The most popular is the conclusion of a preliminary purchase and sale agreement. This in itself is not a violation of the law, but it has nothing to do with legitimate real estate sales schemes.

The rights of the buyer in this situation are not protected at all, since the preliminary agreement only records the intentions of both parties, but does not oblige them to carry out what is planned. That is, such an agreement does not oblige the developer to transfer the housing into ownership of the buyer.

In case of unfinished construction, the buyer will only be able to return the security deposit.

Neither the preliminary purchase and sale agreement (PDPA) nor the so-called preliminary DDU actually have anything to do with 214-FZ and are not registered with the Registration Chamber. And at the same time, no one can stop an unscrupulous developer from selling one apartment several times.

The conclusion of preliminary agreements allows you to attract money from shareholders and begin construction already at the stage of developing project documentation. This does not comply with the requirements of 214-FZ and is very risky, but both shareholders and the developer agree to this: the shareholder buys real estate at the best price, and the developer gets the opportunity to start work. Irina Dobrokhotova, BEST-Novostroy

Realtors' opinion

Real estate agencies prefer to sell those new buildings that are sold under 214-FZ. The optimal option for Moscow realtors is the DDU, because this scheme is transparent, understandable to the buyer and clearly regulated by law.

It is the easiest for agencies to work with. Also among the favorites are sales through housing cooperatives.

Although in the case of cooperatives, developers themselves become sales organizers and most often sell apartments on their own, without the involvement of real estate agencies.

But the realtors themselves clarify that in the end, when deciding whether to work with a developer or not, not only the scheme for selling apartments is important, but also the agency’s margin, the portfolio of projects for sale, and exclusive rights to sell.

Publication date October 28, 2013

An equity participation agreement (DPA) implies that the customer invests his own money and has the right to subsequently demand an apartment from the developer in the amount of paid square meters.

Concluding an agreement with a housing construction cooperative (HBC) is a more risky method, since the money contributed is a share payment for membership in this cooperative and does not guarantee the receipt of an apartment in it as a result of the completion of construction.

Agreements with housing cooperatives or public housing cooperatives have the only similarity - the desire of the citizens who signed them to obtain ownership of an apartment.

We invite you to familiarize yourself with Personnel Policy - this is... What is Personnel Policy?

Installment plan, mortgage, state support for mortgages

The advantage of purchasing housing through a housing cooperative is the ability to arrange installment plans for a long period (up to 7 years)

, moreover, money can be paid in installments even after the house is put into operation and occupied.

According to DDU (for Moscow)

The maximum installment period is 2 years.
A mortgage loan can be issued both for housing purchased under DDU and for housing constructed by housing cooperatives. Preferential mortgage programs can only be provided when purchasing real estate under the DDU; state support programs do not apply to cooperative construction.

When can transactions be concluded?

The DDU can be concluded with the developer at any stage of construction, from digging a pit to completion of construction. Typically, DDU is issued in the early stages of construction, when the price of real estate is lowest. The main condition is that the developer must have a permit to construct the facility, issued by specialized government agencies. Federal Law 214 does not specify the deadline for registration of preschool educational institutions, which causes ambiguous judicial practice on this issue. As a rule, the transaction is completed before the facility is put into operation.

Assignment agreement

can also be issued at any time during the construction of a facility, but only after the DDU is registered with Rosreestr. In this case, the deadline after which the assignment is impossible is the signing of the transfer deed by the shareholder. It turns out that the assignment can be made after the facility has been put into operation, because Between the delivery of the house to the state commission and the transfer of the property to the shareholder, it takes from several months to two years.

How can we help you

Developers often impose their services on preparing an assignment of rights of claim agreement, inflating the cost of its preparation several times over. Moreover, in case of incorrect drafting of the assignment agreement and collection of documents, there is a high risk of suspension of registration of the document in Rosreestr.

But you can contact our law firm for help. How we can help you:

1. First and most important. We will draw up an assignment agreement in accordance with all legal requirements.
2. Second. Often the developer avoids issuing consent to the assignment of rights, and incompetent employees of Rosreestr, without grounds, suspend registration and request the developer’s consent. We will help you collect evidence of the developer’s evasion from issuing consent and will achieve registration of the agreement with Rosreestr.
3. Third. If the house has already been put into operation and has been assigned a cadastral number, then there is a high probability that the registration of the contract will be suspended. The actions of Rosreestr in these cases are often unlawful, but if you appeal the suspension/refusal through the court, it will take months to get a positive court decision. We will do our best to resolve the problem out of court.
4. If necessary, we can stipulate in the assignment agreement a condition that the original shareholder retains the right to claim a penalty in connection with the delay in transferring the object under the DDU.