Buying an apartment through a rental agreement

For older people who own only one apartment, this is one of the few ways to start receiving income from it and a stable increase in monthly pension payments from the state.

By the way, rent is very popular in large cities, and you can buy apartments this way in almost any city in Russia. The main thing is to find a person willing to transfer the apartment to you under a contract.

The official website of our company presents a catalog of Sochi apartments available for purchase in cash, using mortgage funds or maternity capital. The staff of AN Vincent Real Estate will be happy to advise you on all issues related to purchase and sale transactions!

Apartment rent agreement - what is it?

First of all, we suggest you understand the terminology. Rent is the transfer of ownership of real estate in exchange for an obligation to provide maintenance to the owner for a certain period.

There are three main types of rent:

  1. Rental agreement for an apartment with lifelong maintenance;
  2. Permanent annuity agreement;
  3. Lifetime maintenance agreement with dependents.

On the territory of the Russian Federation, the first type is the most popular and widespread. In this case, the money is paid throughout the life of the annuity recipient - the owner of the apartment. After the death of the owner (recipient), the contract terminates and the property becomes the property of the person who paid the rent.

A permanent annuity agreement implies unlimited payments of funds. If the payer dies, the payment obligations are inherited.

As for dependent rent, the payer can either transfer assistance to the apartment owner in the form of cash payments, or satisfy his needs in another way. For example, regularly buy necessary medicines, products, and provide spa treatment.


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Form of permanent annuity agreement

An agreement on permanent rent, regardless of the type and value of the property transferred to the payer, must be concluded in writing and notarized. If such an agreement provides for real estate as the subject of permanent rent, then it is subject to state registration. If the requirement to notarize a permanent annuity agreement is violated, such an agreement will be considered void, that is, invalid from the very beginning. If an agreement on the transfer of real estate for rent is certified by a notary, but does not go through the state registration procedure, then it will only be considered unconcluded, because the law does not make the registration of the agreement dependent on its invalidity.

Advantages and disadvantages

Rent, as one of the ways to purchase real estate, has its advantages and disadvantages. Below we will analyze each aspect in detail.

Benefits for the owner:

  • Living in your own apartment without moving or relocating;
  • Receiving monthly subsidies or necessary care;
  • The possibility of terminating the transaction through the court if the payer does not fulfill its obligations. In this case, he will not have to return the money he spent.

Benefits for the rent payer:

  • Rent, in its essence, is somewhat reminiscent of interest-free installments. At the same time, you can buy an apartment on very favorable terms;
  • Ownership rights pass to the payer immediately after the execution of the rent agreement.

Now about the disadvantages. For the apartment owner, the only disadvantage is that the person paying the rent may turn out to be unscrupulous - he will not pay money or bring food or medicine. In this case, of course, the contract can be terminated, but you will have to go to court.

The payer, in turn, cannot fully dispose of the apartment as long as the rent recipient lives there. Without his consent, the apartment cannot be sold, donated or rented out. In addition, after the transfer of title to the property, the payer is also responsible for paying utility bills and repairing the apartment in case of damage.


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Ground rent: concept

The word “rent” comes from the Latin word reddita, which translated into Russian means “given back, returned.”

Rent is a regular income received by the owner of some property (financial or other asset) as a result of transferring the latter for use to third parties. Moreover, the receipt of such income is not directly related to the entrepreneurial activity of its recipient.

The term "rent" has two meanings: legal and economic. In jurisprudence, legal relations from a rent agreement (Article 583 of the Civil Code of the Russian Federation) boil down to the fact that a citizen transfers his property to another person for ownership, for which he receives regular income in the form of rent payments (and not necessarily in cash). Such legal relations are not related to the transfer of the property for rent or the provision of credit funds: the property is transferred into ownership. In the economic sense, rent is income or part of it associated with the use of property transferred (temporarily - for rent or credit) for the use of other entities.

Land rent is a type, a special case of a rent agreement. Land rent is a method of calculating the income received by the landowner from third parties to whom the land plot is transferred for temporary use. In addition to the land plot, natural resources, buildings, structures, buildings located on such a plot, which can also affect the amount of rent, can be transferred. Typically, such legal relations arise on the basis of a land lease agreement.

Further in the article we will talk specifically about land rent.

Basic information

Rent payments are different from interest, wages, profits and other types of income; they are part of the rent:

  • if there are no structures, buildings or any other capital on the land that is being leased, then the rent, that is, a certain amount of money that the tenant will pay for the use of the land, will be equal to ground rent.
  • if there are any production resources on the land (plants, factories, resource-extracting buildings), then the rent will include not only land rent, but also the loan interest for the use of the production potential located on the land.

Formula: Land price = (Rent/loan%) x 100, the formula also applies to shares.

What are the payer's responsibilities?

The payer’s obligations, first of all, depend on what kind of rent agreement was concluded between him and the owner. In a situation where a life annuity agreement is drawn up, the annuity debtor is responsible only for regular payments in the amount agreed in advance.

If a maintenance agreement is concluded with a dependent, then in addition to payments, the debtor must also provide the annuity holder with essential products, medicines, and also satisfy various household needs - cleaning, going for a walk, and providing medical care.

Experienced lawyers say that the second type is the most problematic. Most often, an annuity is concluded with a person of retirement age or older. It is sometimes very difficult to come to an agreement with them. In addition, they are characterized by suspicion and confidence that they are trying to deceive them and leave them without an apartment. Sometimes rent recipients themselves interfere with receiving assistance - they stop answering calls, do not open the door when payers bring food.

The Civil Code of the Russian Federation does not stipulate in any way the size and number of payments for rent. There is no connection between payments under the contract and the market value of the property. It also happens that the debtor has to significantly overpay.

The only aspect on which the amount of payments may depend is the cost of living in a particular region.

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The worst way to buy an apartment

Lawyer Oleg Sukhov warns about the dangers of concluding a life annuity agreement. Especially for IRN.RU

According to the Federal Service for State Registration, Cadastre and Cartography, the fourth place in the number of real estate transactions, after the agreement of purchase and sale, gift and exchange, is occupied by the agreement of annuity or lifelong maintenance with dependents. But judicial statistics claim that the contract of lifelong maintenance with a dependent (annuity) is the most frequently terminated contract. Why is that?

A complete lack of understanding of the specifics of the contract. Communicating with several hundred clients who entered into a life annuity contract, I was able to identify simple statistics. Namely: none of them fully understood how such an agreement should be executed, despite its notarization.

And there is nothing strange in that, since most notaries are still not able to explain the huge number of contradictions in the content of annuity agreements.

At one of my recent meetings, a notary was called to provide clarification into the process. Her conclusion amazed even the court: “On the date of registration of the disputed transaction, all notaries drew up the documents in the same way; how exactly to understand the content of the agreement in question, I find it difficult to say, I wrote like everyone else.”

My legal practice confirms that few people understand how an annuity agreement differs from a lifelong maintenance agreement with dependents; moreover, there is confusion regarding the determination of compensation for these transactions, which is currently of the utmost importance.

Let's take a closer look. According to the rental agreement, the buyer of the apartment is obliged to transfer a monthly amount of money to the seller, nothing more. Under a lifelong maintenance agreement with dependents, such execution is not permitted. In the latter case, the buyer must provide personal care and maintenance to the seller, such as: buying food, medicine, clothes, cleaning the apartment, etc. Most people confuse or do not know their responsibilities, allowing personal care and maintenance to be replaced by monthly payment of expected expenses, which is an absolute basis for terminating the deal.

The remuneration of an annuity agreement or lifelong maintenance with a dependent is essential.

For example, if the seller transferred an apartment to the buyer for a fee, even the most insignificant, for example, 10,000 rubles, the obligation for the new owner’s monthly expenses remains within the framework established by the contract and tied to the minimum wage (minimum wage) equal to 100 rubles. For example, monthly payments or the financial equivalent of the required volume of services for maintaining the seller, established by such an agreement in the amount of at least 2 minimum wages (the most common type of agreement), will be equal to 200 rubles per month.

If the cost of the apartment was not paid during the transaction, the contract is considered free of charge, and the buyer’s expenses will amount to one to two subsistence minimums per month, regardless of the terms of the contract. In Moscow in 2012, the cost of living was 9,719 rubles.

In November 2011, a law came into force that changed the amount of maintenance for buyers, but only under gratuitous life annuity contracts. They are subject to the obligation to make monthly payments or expenses corresponding to one or two subsistence minimums, regardless of the previously stated terms of the contract. This law does not apply to purchasers of apartments through paid transactions; as before, they only need to meet the expenses established by the contract: 2 minimum wages - 200 rubles, 3 minimum wages - 300 rubles, etc.

It is impossible to prove fulfillment. 85% of annuity and life support agreements with dependents are concluded between relatives or close acquaintances. With close and trusting relationships, it is sometimes inconvenient or even impossible to require documentary evidence of its execution. If, say, the buyer of an apartment delivers groceries to the seller, he wouldn’t hesitate to ask for a receipt for them. Or after cleaning the apartment, what kind of report on the work done should I require?

So it turns out that for many years the deal has been carried out, everyone is happy with everything, but documents about this are not drawn up.

Due to the whims of old age, but much more often at the “instigation” of relatives or new acquaintances of apartment sellers, usually elderly people, the latter are convinced to go to court to terminate the contract due to its alleged non-fulfillment by the buyer. Why not, if there is a high probability of returning the apartment to your property.

If at the court hearing the buyer, called upon to provide the seller with assistance, care, and provide him with monthly food, medicine, clothing, etc., does not provide written evidence of the fulfillment of such obligations, the contract will be terminated due to its non-fulfillment, and the apartment will be returned back to the seller.

In these disputes, only 15% of owners manage to retain their housing, the vast majority of whom took care in advance to collect written evidence in their favor.

In one of the lawsuits, when an attempt was made to terminate a life annuity contract by a buyer providing maintenance and care services to the seller, a thick notebook was presented to the court in which entries were made for the entire period of the contract, reflecting an exhaustive list of services provided and care taken. Every month, the recipient of such services signed that she was satisfied with everything and had no complaints. It was this notebook that became the main evidence in the case, and only thanks to it the court came to the conclusion that there were no grounds for terminating the contract.

For the court, old age is held in higher esteem than the law. Cases regarding the termination of life annuity contracts are heard in courts of general jurisdiction, which are particularly sentimental and are more guided by the principles of morality and compassion, unacceptably forgetting the rule of law.

With such an attitude towards the conduct of trials, when in literally every case the supporters of terminating a life annuity agreement are elderly and sick people, the leniency and understanding of judges towards them is always very great.

At one of my last hearings, the appellate court terminated the contract only because my grandmother, who had sold her apartment 13 years earlier, had deteriorated in health. Oddly enough, the court considered such circumstances to be significant and sufficient to return her apartment.

I can’t say what motivated the judiciary, which also consisted of pensioners. Apparently, the fact that returning the apartment will restore the grandmother’s health. I don't know if this is possible? But the fact that no one will return to the buyer his apartment and expenses for more than ten years of courting an elderly saleswoman and fully providing for her is obvious.

Of course, the above case still faces cassation up to the Supreme Court, but such a decision is indicative and should lead many to the appropriate thoughts.

A life annuity agreement is a very specific transaction. Not only are its participants sometimes unable to understand their mutual rights and obligations to each other, it is often beyond the power of notaries called upon to draw up documents. And in order not to make a fatal mistake, I give everyone very simple legal advice - do not buy apartments under lifetime annuity agreements.

Possible risks

Buying an apartment under a lifetime annuity agreement also has its risks. For the owner of the apartment - the recipient of the rent, the most important risk is the dishonesty of the payer, who may not fulfill his contractual obligations. As we said above, the contract in this case can be challenged, but not everyone has the opportunity to go to court. This may be due to various situations, including incapacity.

There is always a risk of overpayment for the rent payer. In addition, the owner may suddenly have some distant relatives who will try to challenge the agreement and terminate it in order to enter into the inheritance themselves.


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Differences from dependent annuity

The annuitant under an agreement providing for annuity with dependency can be the same individual as in the usual version without dependency.

The payer does not have to be one person, there may be several.

Only real estate can act as transferred property.

In addition to monetary support, such a transaction also includes the implementation by the payer of certain functions of caring for the recipient, purchasing necessary things and products for him on an ongoing basis, repairing and cleaning the home of an elderly person, etc.

Additionally, the agreement may include conditions for organizing the funeral of the annuitant and full payment of expenses for them or other conditions that do not contradict the requirements of the Civil Code of the Russian Federation.

Conscientious fulfillment of conditions and obligations usually boils down to the following provisions:

  • Providing the rentee with a normal diet, i.e. purchasing necessary food products and those that were ordered at the request of the elderly person, their timely delivery to the person.

    The cost, frequency and other conditions for purchasing products are specified in the contract;

  • Good quality care. This item includes timely purchase and delivery of medications, calling a doctor, monitoring the conditions of treatment of an elderly person in a hospital, etc.

    Incl. the contract may indicate the payer’s obligation, if necessary, to hire a nurse for the recipient or independently carry out its functions;

  • Providing the rentee with normal living conditions. This, in addition to the above, also includes the need to repair the premises where the recipient lives, clean, buy household appliances, clothes, etc.

    This is the main difference from an annuity without dependents, which is limited mainly to cash payments according to a schedule.

How to conclude a rental agreement for an apartment and what should be included in it?

Many years of practice show that the annuity agreement must be drawn up together with an experienced lawyer who will control all the nuances and not lose sight of anything. The terms of the agreement must be correctly written and presented in a language accessible to the parties.

To conclude a contract, the following documents will be required:

  • Passports of the parties and their copies;
  • Title documents for the apartment;
  • Extract from the house register;
  • A copy of the FLS for the apartment;
  • Application for transfer of property rights.

In addition, when concluding a rental agreement, the owner of the apartment must obtain a certificate from a psychoneurological dispensary declaring him capable and sane.
This is necessary in order to protect the payer from suddenly appearing relatives. Back to Contents

Lifetime rent of an apartment in Moscow scam

Old age comes unnoticed, and none of us is immune from it. We want our elders to have a golden autumn. Any society can be called civilized only if it treats its elderly with care. Our pensioners often live below the poverty line, barely making ends meet, lacking the bare necessities. This is especially true for single pensioners.

3. The above-mentioned apartment belongs by right of ownership to the Recipient of the Rent on the basis of _______________, about which registration entry No. _____ was made in the Unified State Register of Rights to Real Estate and Transactions with It hh.mm.yyyy and a Certificate of State Registration of Rights series ___ No. _____ was issued.

Sample contract

12. In accordance with Article 558 of the Civil Code of the Russian Federation, this Agreement is considered concluded from the moment of its registration in the Office of the Federal Service for State Registration, Cadastre and Cartography in Moscow (Rosreestr). After the state registration of this Agreement and the transfer of ownership rights, the rent payer becomes the owner of the specified apartment and assumes responsibilities for paying real estate tax, expenses for the operation and repair of the apartment, house and local area in proportion to the occupied living space. The rent recipient, in order to secure the obligations of the rent payer, acquires the right of mortgage on the above-mentioned apartment.

18. Contents of Article 288 “Ownership of a residential property”, Article 433 “Moment of conclusion of the contract”, § 1 “General provisions on rent and lifelong maintenance” and § 3 “Lifetime annuity” of Chapter 33 of the Civil Code of the Russian Federation and Article 35 “ Possession, use and disposal of the common property of spouses” of the Family Code of the Russian Federation was explained to the parties by the notary.

26 Jan 2020 etolaw 295

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In Moscow, a pensioner signed a lifelong annuity agreement and almost lost her apartment

As she leaves the courtroom, she cannot hold back her tears and is afraid to believe: she has a home again. In a hefty stack of papers is the story of a big deal, where every page is a discovery. Tatyana Ivanovna would not have known that the apartment was resold several times behind her back if two people had not appeared on the doorstep one day with an urgent request to vacate the living space.

Gyuzel Davletova, Tatyana Ivanovna allegedly sold her apartment to her 10 years ago, pointedly turns away from the cameras. And in the courtroom she declares: the pensioner herself wanted to deceive everyone by deciding to sell the living space a second time. Meanwhile, she already received her 180 thousand rubles - that’s how much a one-room apartment in Moscow cost according to the contract - a long time ago.

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