Under real estate purchase contract the seller shall transmit to the buyer a land plot, a building, a construction or some other real estate, and the buyer shall pay the purchase price to the seller. The parties to the agreement may be physical persons as well as legal entities or sole traders. The contract shall be in writing by drawing up a single document signed by the parties.
Conditions, which determine the subject matter of the contract and price are regarded as material, in the absence of any the contract is unconcluded. There are also some other serious risks that shall be prevented by a buyer who wants to obtain property in ownership.
Firstly, the seller’s right of property over the real estate shall be examined. The owner shall have exclusive right to dispose over his property. The owner may also empower some other person to do it.
The document affirming the seller’s right is a certificate of state registration of right. But to overcome the risk of falsification, it makes sense for the buyer to obtain an extract from the Unified State Register. If the object is sold by a person empowered to do so by a power of attorney, it shall be checked that the power of attorney is valid, effective and whether the sale of real estate property is the scope of the power of attorney or not. If the object is sold by a legal entity, the extract from the State Register of Legal Entities; the minutes of the general meeting of members (shareholders) on the election of directors and the company’s charter are to be reviewed on the matter of director’s authority to sell property.
Next, it shall be checked that the seller is bona fide and that no adverse claims exist. To make sure that disposition of property was not effected against proprietor’s will, the buyer shall analyze the sequence of the transfer of property from the initial owner to the following ones. It entails the inspection of contracts, certificates, transmission acts and the information listed in The State Register.
The information on adverse claims is listed in The State Register in the “Special registrar notes” section. Information about current arbitral proceedings is to be found at the website http://kad.arbitr.ru/; the information about civil proceedings is uploaded at the websites of district courts.
Thirdly, payment of the purchase price is important. It is better to carry out cashless payment or payment via the banking sell or fix the transfer of money in a receipt. This is needed to avoid allegations that no money transfer took place.
Then, the parties shall remember about income tax deduction. Income obtained as a result of the sale of flat is taxed. But citizens, who had the flat in their ownership for 3 or more years, are not obliged to pay the tax. The buyer is entitled to tax deduction, which is made after the filing of all necessary documents to the tax body.
Next, technical documents and a receipt for payment of utility services shall be obtained from the seller. The technical documents are needed to avoid unauthorized constructions and illegal redevelopments. Receipt for payment of utility services is needed to make sure no debts for payment of housing and utility services are left.
The mentioned aspects are the most important ones to be faced in carrying out real estate sale-purchase transactions. For further details legal acts are to be addressed.
Article by Ms. Arina Makarova.