Everyone has known for a long time that real estate is one of the most stable and profitable areas for capital investment. The process of choosing and purchasing real estate is always very exciting. Especially when it comes to buying such property for the purpose of obtaining a permanent income.

Recently, the demand for the purchase of residential or commercial real estate at the construction stage with the subsequent purpose of renting it out or selling it after commissioning has grown rapidly. Of course, due to the high cost, all operations on this issue become extremely important.

That is why it is important not to come across potential fraudsters who, for the purpose of their own enrichment, will use the ignorance of the average person for their own purposes.

The “due diligence” procedure is very relevant here and is nothing more than a legal audit. This is an independent detailed inspection of the construction site and the developer’s company.

What does “due diligence” of new buildings include?

  1. verification of title documents for the land plot on which construction is underway (including the presence of encumbrances – mortgages, pledges, arrests, lawsuits).
  2. analysis and verification of information from state registers (state register of property rights to immovable property; public cadastral map of Ukraine; register of permit documents; unified state register of debtors; unified register of court decisions);
  3. research of the history of a land plot or an object of unfinished construction, on which construction is currently actively underway, to determine how and on the basis of which the ownership changed or passed to new owners.
  4. examination of the developer (whether construction permits were/are revoked, whether a bankruptcy case has been initiated, whether he fulfills his obligations to buyers on time, whether he has legal disputes with state authorities or creditors).
  5. examination of permit documentation for construction (including approved project documentation and technical conditions);
  6. analysis and accessible interpretation of real estate acquisition schemes from this developer, detailed legal analysis and search for risks in the contract (regarding fines, compensatory payments for delay in commissioning, safe sale by assignment, etc.).

Such a comprehensive assessment of the future object of investment in a new building (real estate) will be able to form a complete objective view of a certain object of investment in the buyer (investor). Comprehensive and thorough verification of legality and commercial attractiveness is of paramount importance to protect the potential client from all pitfalls and risks. Thus, there is an opportunity to weigh all the advantages and disadvantages of cooperation with this or that developer company.

Any construction begins with a foundation, so the decision to cooperate and invest one’s money in one or another business (real estate) must also have a solid foundation. The problem for an ordinary person interested in purchasing real estate is that legal relations in the field of real estate are regulated by many laws and by-laws, state building regulations, local acts, instructions, and decisions of local self-government bodies. Quite often, people go for beautiful advertising and a convenient location, closing their eyes to those things that are difficult and non-obvious for them.

With a detailed analysis conducted by our lawyers, you will gain confidence in the future agreement and be able to secure your funds.

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