Top 5 mistakes upon purchase of an apartment
Mistake 1: Unattentive reading of a contract
No matter what sales schemes are offered by a property developer, in any case, you must sign a contract. This could be a preliminary contract, sale and purchase derivative contract, sale and purchase proprietary rights contract, etc. Probably there is no need to mention, but any contract offered to you must be thoroughly read and understood. When you buy an apartment, you must be aware of all nuances of a contract and understand what consequences may occur after its signing.
In any contract the basic nuances are as follows:
- The exact address of an apartment, also a positive moment would be an existence of an annex to a contract, which contains the plan of an apartment, and so-called specification – a detailed description of the apartment`s amenities: what windows are supposed to be like, doors, a question of heating and gas provision, etc.
- Transaction between parties, including a price for the apartment, conditions for instalment, additional pay for square metres after actual measurements by the bureau of technical inventory.
- Responsibility of parties, particularly – a property developer in case of delay of commissioning for use, what happens quite often – and your responsibility in case of overdue payments, non-payment, refusal to conclude a sale and purchase contract.
Quite often, buyers do not pay enough attention to the apartment`s characteristics in a contract. If you and a property developer had oral agreements, you need to make sure they are set in a contract, because if you agreed on installing particular high-quality windows, then if this condition is not set in a contract, it will not be possible in future to prove you were promised those windows. Setting vague characteristics allows a property developer to make construction cheaper in future (install a cheap low-quality boiler).
Mistake 2: Signing a contract without having approval documents checked
Most buyers are certain that a contract is the most important. Actually, it is not.
To get a building commissioned, a property developer must obtain all relevant documents:
- Documents that certify the right to a land plot
- City-planning conditions and construction limitations
- Expert report of project documentation
- Permit for construction work
- Technical conditions to connect utilities
- In some cases additional documents are necessary.
The availability of most of those documents can be checked on your own or by a lawyer. Some documents must be discovered from a property developer. If he is of good faith, we will agree to grant provide you all documents mentioned above.
Why is it necessary to check approval documents? Even if you have a perfect contract, with all risks for you as a customer assessed, in any case a property developer must hold the documents, because without them I will not be possible to commission a building for use.
Approval documents defines the legality of a construction.
Mistake 3: Focus on a low price and deceptive promotions of a property developer
Low price may reflect future problems with construction.
For example, it may happen in a case when a property developer participates in legal proceedings about land plots or about a permit for construction work and such construction remains questionable. Also, sometimes construction occurs in fact for invested money of preliminary owners of apartments. Low price in this case is explained by a need of a property developer to earn additional money from new buyers as soon as possible.
But in the first place, low price is a sign of low-quality construction.
There is a certain minimum cost of construction, under which it is not allowed to build, so the fact, that the prices of two newbuildings, located close to each other and having similar characteristics, ranges differently, is weird. It must alarm you. Construction is a business of a property developer at the first place, and we always point out to our clients that it is not necessary to choose an apartment based on price.
Mistake 4: Focus only on an advertisement of a newbuilding without research of previous objects of construction and property developer`s reputation.
Good advertising and proper marketing is the most popular way of deceiving buyers.
Every property developer must be investigatedin the Unified State Register of Court Decisions and the official site of Ukrainian Judiciary for the presence of court decisions with his involvement, in the first place about illegal constructions. There may be a situation when at first sight all documents are fine, but parallely there are legal proceedings about land plots. Consequently, such construction remains questionable.
Also, there may occur a situation when a particular property developer of a certain scandalous construction establishes a new entity with a clean reputation and works under a new name. Such cases are not uncommon in Lviv.
Research of previous objects of construction is an additional information about how will a story of your construction develop. If a property developer has 5 illegal unfinished constructions, it is unlikely he will work in good faith on 6th object of construction, most likely your money wll go to finish previous objects.
Mistake 5: Assurance that all documents must be checked by a notary
It is not the case.
Firstly, a notary checks a contract for compliance with legislation, legal capacity of parties, their true will, but a notary is not obliged to check all approval documents for construction, as well as if there were judicial proceedings involving a particular proporty developer and if there are proceedings now. Of course, a notary shall not research previous objects of construction and property developer`s reputation.
Secondary, not every scheme of selling an apartment in a newbuilding requires a participation of a notary.
Those are the basic mistakes, but their number could be much bigger if a purchase of apartment is not treated seriously.
It is necessary to conduct a research on your own or have a qualified lawyer to do it, to reveal a property developer, who works not in good faith, and avoid all arising negative consequences.
If you still have not chosen a particular property developer, the lawyer of the Attorneys at law will provide comprehensive information about procedure of purchase, risks to be taken into consideration. Such a consultation will let you get oriented in legal nuances at stage of searching and discard property developers who do not qork of good faith.
Prepared by Halyna Kalytovska, junior associate of property law practise at Attorneys at law “Bachynskyy and Partners”