11 January 2019
Apartment Purchase Procedure on the Primary Housing Market
Let’s imagine, you chose an apartment in a nice newly built house, and you’re ready to make a purchase. What do you do next? When purchasing residential property, the company’s representatives usually inform about the further actions and required documents. However, it wouldn’t be such a bad idea to explore the types of contracts and their differences. So, there are:
- Prepayment contract;
- Preliminary contract;
- Principal contract.
What’s the difference?
Investor’s desire to purchase the chosen realty is documented in the Prepayment Contract. This contract is also signed when a person buys realty on the secondary market. This type of legal agreement obligates the client to purchase the property in a specified period; and the seller is obligated not to sell it to someone else. If for some reason the buyer refuses to purchase the realty, the reservation is cancelled, and the deposit is not refundable.
So, it if fair to say that apartment purchase procedure begins with signing of Prepayment Contract. However, on this stage the potential investor still has the right to change his or her mind regarding the purchase.
Situations when Preliminary Contract is signed
- When realty is purchased in installments. The articles of this agreement underline the fixed price and the period of payment.
- When finances are invested into realty, that is still being built.
- When the buyer paid in full for the apartment, but the ownership is still being registered.
If the building is commissioned, the construction developer has to prepare the following documentation package:
- Declaration of object readiness for operation;
- Certificate of conformity of the construction object.
Important moment (the moment where the apartment purchase procedure starts) is granting the following documents by the construction developer:
- Extract from the property rights register;
- Declaration of commencement of construction works;
- Electronic license for commercial activity related to creation of architectural projects.
What does the buyer need to know?
So, the procedure of apartment purchase can be narrowed down to the following: the buyer paid the required amount for the realty, signed the Principal Contract, and legally gained the right of ownership. As a rule, construction developer is interested in selling apartments on legal grounds, and provide the buyers with everything needed for comfortable residence. If an apartment is purchased in a ready house, it is expected to have electricity, gas, and water. If the purchase is made in a house at the construction stage, it will be good to enquire if this builder had any problems with any of its other projects.
All financial operations between you and the company should be as clear and transparent as possible. We highly recommend only bank payments, and don’t forget to keep all the receipts.
“NovaBudova” company is constructing several RCs, and offers apartments both in ready houses, as well as in houses being constructed. Here you have an opportunity to purchase property with designer’s interior finishing from the builder.
Let’s summarize, at present, apartment purchase procedure, investment scheme choice, and practical aspects of contracts are the tasks, that are not easy to deal with if a person doesn’t have certain knowledge and skills. We are happy to assist you in all those big financial and legal questions.