Purchase of real estate in new building

Buying real estate from a construction company is popular in Lviv among potential buyers primarily because of price of apartments, which is often less than on the secondary market. In addition, there is a wide selection of new building features (location, architecture, etc.), that is offered by construction companies.

There are different ways of buying apartments in new building. For example, purchase of apartments using funds of financing construction, selling of bonds, share participation in construction, by conclusion of preliminary contract etc. Choosing any of these ways buyers cannot be insured from fraud of unfair construction company. There are many risks that in the end you will not receive your apartment and you will lose your money.

When somebody buys apartment in new building, he invests his costs in not constructed building. As a result this person can receive an apartment from construction company. According to the Ukrainian legislation, investing and financing construction of real estate can be made only by funds of financing construction (FFC), funds of real estate transactions, unit investment institutions and by issue of bonds.

Creation of FFC is the best option. FFC is the manager, who keeps records of money, controls using of money, can change the construction company. But selling apartments from construction company by the creation of FFC is not often used.

When selling of bonds is used, you buy no concrete apartment, but only certain numbers of square meters in new building.

Share participation in construction means the creation of housing cooperative, members (potential buyers) of which unit their money for the construction of the building. Your apartment as a part of the building will be the owner of the cooperative. So, later it will be necessary, for example, to conclude the exchange contract (share on an apartment).

Very often construction companies in Lviv sell apartments in new buildings by conсlusion of a preliminary contract. However, it is not a good way. The apartment has not built yet. This way of buying an apartment has a lot of risks. There is the risk that the apartment with established properties will not be in this new building. A construction company can refuse to conclude the main contract and you will not have real mechanisms to force it to do that. The preliminary contract should be notarized for your own safety.

It is important to analyze the construction company, its reputation, previous projects, internet forums, lawsuits against construction company. It is necessary to find information, whether this company has previously constructed buildings.

Some attention should be paid to the documents of the construction. If the construction company refuses to show documents to clients or gives not a complete package, there is any reason to trust this company.

You should to require from construction company next documents:

  • documents on land on which is construction (who owns the land, right of lease or ownership, urban conditions and restrictions of construction);
  • construction permission documents (right to start construction works, design documentation for construction, technical plan, etc.), a specific list of these documents will depend on the complexity of construction;
  • documents of a construction company (registration documents, an order appointing the director, although you can look in the online registry of legal entities) to ensure that you conclude a contract with an existing company and a contract signed by an authorized representative.

You should to approach responsibly to buying an apartment from a construction company in a new building. The best option in this case is to get legal advice from qualified lawyer.

The reasons you should to choose the Legal-servicing company “Legalaid”:

  • Many lawyers analyze only the contract. We will give you complex legal advice on all issues: analysis of a construction company, all permission documentation, contract, all risks;
  • Our specialist will give you verbal or written advice and answer all your additional questions;
  • We save your time because we have great experience  in support of real estate transactions and we can analyze the situation effectively0 and quickly;
  • We have positive reviews from our clients including reviews regarding support of real estate purchase;
  • Our lawyer will accompany you at the moment of conclusion of the contract in the construction company office or notary office.

If you have additional questions, want to get legal advice or legal support in the purchase of a real estate in a new building, or you need legal aid in any other transactions with real estate, you may call our specialist using contacts listed on the site.

Purchase of real estate in new building
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20/01/2022
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