Purchases of apartments under construction account for a large share of the total number of transactions in the primary real estate market. This is due to a number of reasons:
- relatively low prices per square meter of real estate;
- elite areas;
- the ability to pay installments for the apartment.
All this is beneficial for most urban residents, so investing in a new building is a good way not only acquire property at a price below the market, but also to earn on the resale of an apartment or renting out. In this regard, it became necessary to determine what rights the investor receives, as well as to come up with a way to regulate the relationship that arises between him and the developer. This is due to the fact that an investor who has invested money in construction does not and cannot have ownership of the object under construction. That is, until the house is commissioned, it is considered a construction site, and the one who is the customer under the contract is the owner of the facility. And between the developer and the investor is an investment agreement or a contract for the sale of property rights to real estate.
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This is a document that regulates the relationship between the investor and the construction customer. On its basis, the investor receives the right to become the owner of the property in the future, when the house is completed and put into operation. It would seem that everything is quite simple and transparent, but do not forget about the risks. There is always a chance to fall for an unscrupulous developer, who may not only fail to meet the promised deadlines for the completion of the facility or not complete its construction, but also go for a variety of tricks after the delivery of the facility. What are the features of drawing up a contract for the sale of property rights to real estate and what to look for before signing - we will talk about this in detail in this article. By the way, if you are thinking about buying real estate, we recommend contacting best luxury real estate agency THE Capital.
Features of the contract for the sale of property rights to real estate
Property rights to real estate are the subjective rights of participants in legal relations related to the possession, use and disposal of property. Pay attention to the wording “subjective rights”, that is, any rights to property other than property rights can be implied. It is worth noting that for the developer this is the most profitable, practical and safe solution, since he transfers property rights to real estate to the investor only if certain conditions are met.
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The main catch is that the acquisition of property rights to real estate is not associated with the commissioning of the facility. That is, if the developer does not put the house into operation, it will not be easy to return the money. Therefore, a contract for the sale of property rights to real estate should be concluded with great care so that the investor does not have any disputes with the developer in the future.
Other features also include:
- ease of registration - is in a simple written form and does not require mandatory notarization;
- no intermediaries and no tax burden – the contract is concluded directly between the customer and the investor;
- the property right to real estate is transferred by the developer to the investor not at the time of signing the contract, but after 100% payment and confirmed by the acceptance certificate.
What to look for before signing
Investments without risk are impossible and only careful preparation will help to minimize them. If you have already chosen an object for investment, then before concluding a contract for the sale of property rights to real estate, you must carefully check:
- availability of a full package of permits of the developer;
- reputation of construction subjects;
- judicial or pre-trial proceedings of participants in the construction process;
- there are restrictions on the use of land.
To assess the risks, check the construction company and avoid trouble after the purchase, THE Capital specialists are ready to help you. Subscribe to our updates real estate blog and get the latest publications from the real estate agency THE Capital.
