What documents should be drawn up when buying an apartment in a new building

Preliminary agreement

Buyers of apartments are often faced with the dilemma of concluding a preliminary agreement, or a reservation agreement, with the developer. It is concluded at an early stage of the project, that is, before the residential premises are built and put into operation. According to the current rules, a notarial deed is required to conclude an agreement. The agreement is drawn up before conclusion of the development contract. A standard-form preliminary apartment purchase and sale agreement is concluded in the following cases:

• when the seller and the buyer commit themselves to conclude a sale-purchase agreement (final agreement) in the future;
• when the buyer pays an initial instalment or advance payment during or after the preliminary agreement is concluded (the rest of the money is transferred to the seller after the final agreement is concluded);
• when the premise already exists in the physical and legal sense (it is built or has its own land and mortgage register).

The conclusion of the contract means that both parties guarantee the fulfilment of their obligations: the buyer – to buy the selected apartment, the seller – to provide the selected housing for purchase. The agreement contains the following information:

• the price of the facility and its location;
• advance payment due date;
• subsequent instalments payment due dates;
• date of transfer of title of the premises into the ownership of the buyer;
• terms of settlement of possible discrepancies with the project (for example, if the apartment area is slightly different than in the layout);
• conditions for obtaining premises;
• consequences of the concluded agreement denunciation.

The payment for the preliminary contract is divided between the developer and the buyer. Today, one of the most popular forms of payment is the instalment plan. For example, the buyer pays 10% of the price as an initial payment after concluding the contract, and the remainder after the completion of each stage of construction or putting the facility into operation.

Pre-buying inspection of the apartment

After completion of the construction, you need to arrange a meeting with the developer to inspect the apartment. This is a very important stage, but sometimes it takes place after the final contract conclusion, which is wrong. At the agreed time, in the presence of a representative of the developer, it is necessary to check:

• whether the standard of fit-out is consistent with the agreement commitments;
• whether there are any defects in the design of floors, walls, installation of windows and doors, preparation of installations and connections, etc.;
• whether the size of the rooms corresponds to the project (discrepancies are resolved in accordance with the agreement).

By signing the apartment acceptance certificate, you confirm that it meets the established requirements and your commitments with the developer. If any faults were found during inspection, they should be eliminated within the time period specified in the agreement.

Final agreement conclusion

The final agreement on the transfer of purchased apartment title can only be concluded when the building is ready and is about to be put into operation. To register the real estate title, the buyer should submit an application to the Ministry of Justice, attaching to it:

• a document confirming the real estate title (an agreement on co-investing into construction of a residential house, an agreement on the sale and purchase of title, an investment agreement);
• an apartment specifications sheet;
• a document confirming the fact of payment for the services of an extract from the Unified State Register of Rights to Real Property;
• a receipt confirming the payment of State duty.

The standard term for registration of title is five working days, after which the applicant receives a certificate of title and an extract from the Unified State Register of Rights to Real Property, becoming the full owner of the apartment.

Sales and purchase agreement – what is worth remembering?

In some cases, depending on the terms of the purchase of real estate, the sale and purchase agreement may provide, for example, a pre-emptive right to purchase, reserved in favour of another person. It also happens that the contract includes other provisions affecting the use of property, for example, a clause on the division of common parts, the establishment of easements or personal rights. In such cases, it is worth comparing the content of the Land Register with the content of the contract and explaining any discrepancies.

Documents for getting an apartment mortgage

Getting an apartment mortgage is a common way of acquiring housing in Ukraine, for which the buyer has to collect a package of documents:

• passport of a citizen of Ukraine;
• taxpayer identification number;
• certificate of marriage, divorce or death of the second of the spouses;
• permission of the second spouse to obtain a mortgage loan;
• a document confirming the amount of official income;
• employment agreement.

This package of documents is standard, but it may differ depending on the requirements of a particular bank.

Features of instalment purchase

A developer’s instalment plan involves paying the cost of housing gradually in equal monthly instalments. Usually, instalments are offered for housing that is under construction or at the stage of completion, therefore, it is paid either until the completion of construction, or before the deadline established by the agreement. Most often, instalments are provided for a period of 1-3 years.

Taxes when buying an apartment in a new building

When buying a new home, tax liabilities arise from both the developer and the buyer parties. Buyer taxes:

• 1% tax to the Pension Fund;
• state duty in the amount of 1% of the cost of the apartment;
• extract from the Unified State Register of Rights to Real Property – UAH 40.

The services of a notary are paid separately at the rates set by him, which may vary for different cities and depending on the specifics of the transaction.

Find out what documents are required for purchasing RIEL Real Estate Corporation’s apartment – contact us by phone or via the feedback form.