Often, when there is a desire to buy an apartment in a new building, it turns out that in the residential complex of interest, all objects have already been sold by the developer.
However, there is an opportunity to buy the same housing from investors who have already purchased square meters in the early stages of construction and are ready to resell them before putting the house into operation. Such a transaction is called an assignment when selling an apartment, it is organized for the purpose of making a profit, sometimes investors agree to resale due to other circumstances.
What is an assignment in the sale of an apartment
Experienced lawyers note, when a resale by assignment is considered, that this is a kind of option for buying an apartment on the primary real estate market, which is carried out with the permission of the construction company and under its control. That is, the contract implies a change in the buyer's side in the contract with the developer. The new buyer, paying money under the contract in favor of the investor, acquires the rights only under the main contract concluded with the builder. This type of transaction has its advantages, but there are also risks, since a third party is involved in the procedure.
Sale of apartments by assignment: the pros
The first is why the opportunity sell an apartment buyers are interested in the assignment of rights - savings. Investors who invest in real estate at the stage of the excavation often sell it 5-15% cheaper than the developer when putting the house into operation. Other attractive aspects of such a transaction can be noted:
- Minimum risks. Many people note that the assignment of an apartment will not lead to long-term construction, since the house is almost ready and will be put into operation in the near future.
- Finished housing. In some cases, it is proposed to purchase housing with a finished finish, which will allow you to move into it faster.
Sell an apartment by assignment: mutual benefit and features
Understanding what the sale of an apartment by assignment is, you need to understand that such a transaction has certain nuances. First of all, its format implies the payment of the entire cost of housing. While many developers offer installments during the construction process. In addition, often builders allow the assignment of housing only on condition that a commission of 1 to 3% is paid, since they also want to get some earnings from the renewal of documents. Therefore, first of all, the buyer needs to analyze whether the assignment for the sale of an apartment will actually help him save money. Among other features, the following is noted:
- The seller will not be able to make a claim. The buyer pays the cost of the property to the investor, but all disputes regarding the quality of the apartment will have to be resolved directly with the developer.
- There is no choice of loan program. If an assignment was made with a loan agreement, according to which the investor buys out real estate, it will not be possible to choose a lending program. The buyer will have to accept the conditions that the investor once chose.
It is also better to abandon the deal when separate contracts are concluded between the investor and the developer company. The assignment document must be tripartite and signed by all parties involved in the transaction.
How to eliminate risks
Understanding what a sale by assignment is, you need to foresee the risks in advance and know the ways to minimize them. Practice shows that basically all risks are associated with the dishonesty of one of the parties involved in the transaction. Therefore, in order to secure your purchase, adhere to the following rules:
- Engage in due diligence on the parties in advance. The more information you collect about the investor and developer, the better. Check the permits, ask for time to study the assignment agreement with a lawyer.
- Enter into an agreement on a safe investment scheme. The most reliable purchase is through the Construction Financing Fund. In this case, the likelihood of a double resale of the same object is excluded, since the process is controlled by the state.
Before selling an apartment by assignment of rights, check the main agreement between the investor and the developer for the absence of a prohibition on assignment. It is even better to require the indication of this fact in the contract. Refuse the deal if the assignment was made earlier, as you may be dealing with a problematic construction site.
How to sell an apartment by assignment
The procedure for buying an apartment on the basis of an assignment agreement must be carefully thought out and requires preliminary preparation:
- The developer company must have all documents for the land and a permit for core activities.
- Check if the developer is meeting the promised construction deadlines.
- Make sure that the investor has not violated the terms of the contract with the developer.
If these conditions are met, the sale by assignment of rights will be as safe and lawful as possible.
Clearance at customs
In order for the developer to allow the transfer of rights to the apartment, the buyer must pay 100% of its value. If the funds are not paid in full, a clause with the terms of additional payment of the remaining amount is included in the content of the agreement. At this stage, the buyer needs to clarify whether the resale is valid immediately or if it comes into effect later, subject to all conditions. Further:
- Check if the purchased item is listed in the bank as collateral. This happens when an investor takes out a loan. In this case, the financial institution must be another party to the contract.
- Signing. The sale of an apartment by assignment of rights is considered valid from the moment of signing the contract by all parties involved. The procedure is carried out only after a complete check of all documents and obtaining consent. The validity of the contract is confirmed by a notary who certifies the document.
- Reception of the apartment. As soon as the house is put into operation, the buyer accepts the apartment according to the acceptance certificate and becomes its full owner.
The assignment agreement is the first document that confirms the right of the new owner, but in addition to it, you need to get other papers. By the way, if you decide buy a house in Kyiv, we recommend contacting the best luxury real estate agency THE Capita
Post-transaction documents
Understanding how to properly sell an apartment by assignment, before signing the contract, you need to be ready to present personal documents - an identification code, passport, consent of your spouse. After completing the transaction, the buyer should receive:
- A notarized assignment agreement that the investor also receives.
- Certified confirmation of financial settlement with the investor.
- Certified consent of the developer company for the assignment, if this fact is not spelled out in the contract.
- Acceptance certificate of a new apartment.
On the basis of the listed documents, a certificate of ownership is subsequently drawn up.
Sale by assignment of rights with a bank loan
Selling an apartment on assignment with a bank loan has its own characteristics. In addition to the fact that another party will appear in the contract - the bank, the buyer will not have to pay the entire amount for the apartment, and this is the positive side of such a transaction. Part is paid to the investor, and the other is repaid under the terms of the loan.
Read more:: What is self-construction and how to legalize it?
The main disadvantage of such a transaction is that the rights to real estate are transferred to the buyer in accordance with the terms of the bank. In addition, it also happens that the initiator of the assignment is the bank itself. This happens when the investor does not fulfill the terms of the loan agreement.
The process of assignment with a bank is the same procedure as a loan with a down payment. However, in the process of concluding, it is important to ensure that the rights of the investor are not violated in the agreement, otherwise, in the future, the court may invalidate such a transaction. It turns out that the one-time financial burden of the buyer decreases, but the risks of losing their home altogether and contacting legal proceedings increase.
Read more:: Where is it better to buy an apartment: in a new building or on the secondary market?
Sale of apartments by assignment of rights: tax burden
The amount of tax payments for the resale of an apartment depends on what investment schemes are used by the seller. For example, if an assignment is made for housing that was purchased through the Construction Financing Fund, then the buyer does not pay taxes. If a new preliminary contract for the sale and purchase of real estate rights is concluded in the procedure, the buyer pays 1% of the value to the Pension Fund.
In the end, what does the sale of an apartment on assignment mean? This is a transfer of real estate rights from one person to another, but at the same time, third parties may be involved in the contract - the developer, financial institution and other parties related to the transaction. Subscribe to our updates real estate portal and get the latest publications from the real estate agency THE Capital.
