Selling an apartment in installments between individuals, how to sell an apartment in installments without risk

Purchasing real estate is a costly procedure, and therefore, if it is impossible to pay the full cost of housing at a time, citizens resort to methods permitted by law, one of which is installment plans.

Depositing a sum of money in installments alleviates the financial burden for the buyer, and the seller is not deprived of the opportunity to transfer the rights to the living space due to the lack of solvent clients.

Benefits and risks of the transaction

The parties entering into an installment agreement do so for several reasons. Buyer:

• gets a chance to purchase square meters cheaper than with a bank loan;
• the process of applying for an installment plan is simpler than a mortgage loan, there is no need to pay for life and real estate insurance;
• If you have a certain amount of money and expect financial receipts in the future (sale of your own apartment, entry into inheritance rights, etc.), installment plans allow you to receive living space for use from the date of conclusion of the contract.

Sellers agree to a deal when:

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• the apartment has not been sold for a long time;
• money is urgently needed;
• housing has disadvantages (lack of repairs, encumbrances, etc.) that make it difficult to quickly and profitably sell.

• This method of transferring ownership rights is used by construction companies that have recently appeared on the market and have not had time to earn a reputation.
• The risk for both parties lies in the incorrect drafting of the contract; as a result, if force majeure circumstances arise (the buyer stops paying for housing, the seller turns out to be a fraudster), going to court will not help the injured party compensate for the losses incurred.
• By signing an installment plan for the purchase of an apartment in a building under construction, the buyer is deprived of the right to challenge in court the actions of the contractor company, which violates the deadline for putting the house into operation, and other inconveniences caused.

In this regard, the share participation agreement has more legal force in court proceedings with an unscrupulous developer, and therefore is much more profitable for citizens purchasing living space.

What to consider when drawing up a contract?

Such an agreement between the parties allows the buyer to move into the apartment immediately after signing the contract (if we are not talking about housing in a house under construction), but the tenant has no right to dispose of it until the cost is fully paid to the seller and the living space is registered as the property.

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The agreement on the purchase of housing in installments contains the following provisions:

• Full name, passport details and registration information at the place of residence of the parties to the transaction;
• accurate information about the property;
• rights and obligations of the parties;
• the procedure and conditions for the transfer of living space and rights to it;
• the purchase price of the apartment, the amount of the down payment made by the buyer, the procedure for paying the remaining amount.

The transfer of a sum of money towards the payment of the cost of the apartment should be properly formalized as a deposit by signing the appropriate agreement (Articles 380, 381 of the Civil Code of the Russian Federation).

Unlike an advance, if the seller fails to fulfill his obligations, he must pay the buyer double the amount of the deposit.

If the contract is terminated due to the fault of the buyer, the deposit remains with the owner of the property as compensation for losses incurred.

1. Evasion by the buyer of obligations regarding the agreed monthly payments gives the owner the right to terminate the contract and return the property (when the down payment was less than half the cost of the home).
2. For each day of late payment, a penalty is charged, unless other conditions are established when signing the agreement.
3. The conclusion of an agreement requires the availability of the following documents:

• passport of the buyer and owner of the property;
• notarized consent of the spouse (when housing was purchased in a legal marriage);
• confirmation of ownership (certificate, purchase and sale agreement, gift, etc.);
• technical and cadastral passport of the apartment;
• extract from the house register.

In the case of the owner who has not reached the age of majority, the consent of the guardianship authorities is additionally attached. When making a transaction on behalf of the owner by a third party, he must provide a notarized power of attorney.

When the buyer intends to cover part of the cost of housing with maternity capital money, the property owner should remember that amendments made to the legislation allow the Pension Fund to make payments under this certificate only after concluding an agreement on the transfer of ownership of the residential premises.

Procedure for registering an apartment in installments

The process of transferring an apartment for use by the owner, which implies a gradual purchase of housing over a certain period, is legally defined as the process of selling real estate (Article 549-558 of the Civil Code of the Russian Federation) and consists of several stages:

• the parties agree on the transfer of living space by installments;
• establish a payment method convenient for both parties;
• they check the documents for the apartment and the actual absence of conditions that make the conclusion of an installment agreement impossible (this information is reflected in an extract from the Unified State Register, which is provided at the request of the owner);
• draw up and sign an installment agreement;
• carry out the transfer of residential premises on the basis of the relevant act (Article 556 of the Civil Code of the Russian Federation).

During the preliminary discussion, the parties decide which method of paying the cost of the apartment is acceptable:

1. Payment of half the amount at the time of conclusion of the contract and payment of the rest within six months. In this case, interest is not accrued due to the short installment period;
2. Transferring a small deposit to the seller and dividing the remaining debt into equal parts, payable within 1-2 years. The interest rate on such installments is calculated in the amount of 1-3%;
3. Payment of the cost of housing in equal installments throughout the term of the contract, while the payment of the initial amount is not implied.

By agreeing to a deal, both parties risk entering into an agreement with a fraudster, who may be both the seller and the buyer. Contacting a qualified specialist with experience in concluding real estate sales transactions in installments will help you to foresee the nuances and legally correctly reflect them in the contract.

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How to sell goods, cars, apartments or houses in installments without risk

Hello! In this article we will talk about how to properly sell movable and immovable property, as well as various goods, in installments.

Today you will learn:

In these difficult times, it is very difficult for people to immediately raise a large sum to make a purchase. This is where installment plans can come to the rescue.

It is convenient not only for buyers, but also for sellers. After all, due to the fact that money can be paid for goods in parts, people are more willing to make purchases. This helps increase sales volumes.

But here many buyers confuse installment plans with the similar term “lending”. These are similar, but quite different concepts.

Buying on credit is the process of purchasing goods when the buyer does not pay for it immediately, but in parts. In this case, there are 3 parties involved in the transaction: the seller, the buyer and the banking institution. The buyer, in addition to the cost of the product itself, pays interest on the loan, that is, overpays.

Installment purchase is a transaction in which 2 parties (seller and buyer) take part. In this case, the buyer does not pay interest; the cost of the goods is simply divided into a certain number of payments.

You can sell anything in installments. This can be household appliances, children's goods, movable and immovable property (apartments, houses, cars).

But there are situations in life when a person urgently needs a certain amount, but there are no buyers on the horizon. Then you can find a person who wants to make a purchase, paying gradually.

How to sell goods in installments

If you have opened your own store and decided to offer your customers the “Goods in installments” service, then you must be an individual entrepreneur or a legal entity.

Individuals cannot sell goods in this way. Of course, if you sell your refrigerator in installments without being an individual entrepreneur or legal entity, you will not be sent to prison. But you will remain defenseless if the buyer refuses to pay the remaining amount.

In order to sell a product, you will need:

1. Find a buyer;
2. Ask him to provide documents confirming his solvency (this item is optional);
3. Conclude an agreement for the purchase and sale of goods in installments. According to this document, the seller undertakes to transfer the goods and the buyer to pay its cost. The contract must contain the following information:

• Full cost of the goods;
• Installment repayment terms;
• Minimum payment amount;
• The conditions under which the product is sold;
• The amount of the penalty in case the buyer stops making payments;
• The amount of the down payment.

1. Receive an advance payment. This amount must be at least 25% of the total cost of the goods.
2. After this, the seller is obliged to transfer the goods to the buyer.

At first glance, everything seems easy and simple, but when selling goods in installments, you need to know some rules that will help minimize risks:

1. The goods are purchased in installments in the locality where the buyer actually lives.
2. In this way, goods can be sold at the prices indicated on the day of sale.
3. The minimum down payment must be at least 25% of the cost of the goods. If the purchase amount is above 50 tax-free minimums, then at least 50%.
4. Installment plans are provided to citizens if the purchase price does not exceed their three-month income.
5. The buyer must pay all installment payments within 6-12 months. If the cost of the goods is above 50 tax-free minimums, then the maximum repayment period is 24 months. Domestic cars are offered in installments for up to 5 years.
6. The purchase and sale agreement is drawn up in 3 copies (1 for the seller, 2 for the buyer, 3 for the company where the buyer works).
7. If the buyer evades installment payments for 3 months, the seller can sue him.

How to sell a car in installments

When selling your vehicle on an installment plan, you need to know that there are many risks associated with such a transaction. For example, the car may be damaged before the money for it is paid to you, or the buyer will flee in your car in an unknown direction.

However, if you urgently need to sell your car, you can do it in installments. But to do this, take all the paperwork seriously.

Competent execution of the transaction minimizes risks for the seller and buyer.

There are 3 ways to sell a vehicle in installments:

1. Having drawn up a purchase and sale agreement.
2. By concluding a loan agreement.
3. Having made a receipt.

Now let's look at each of the options in more detail.

Drawing up a purchase and sale agreement

The essence of the transaction when drawing up a purchase and sale agreement is as follows. You and the buyer draw up and sign an agreement, which specifies all the terms of the purchase. After this, the keys and necessary documents are transferred to the future owner. You do not re-register the vehicle until the last payment has been paid.

When selling a car, you must understand that regardless of who exactly you are selling your vehicle to, the transaction must be completed in the presence of a notary.

By law, you may not have the contract notarized, but then you risk being left without a car and without money. Therefore, even if the buyer is your relative, neighbor or good friend, demand that the purchase and sale agreement be concluded with the participation of a notary.

The contract should contain as much information as possible about the terms of the transaction.

Please pay attention to the following points:

• “Contract price and procedure for installment payments” - must contain information about the full cost of the car, a clear debt repayment schedule has been developed and the conditions under which the installment plan is provided must be specified;
• “Responsibility of the parties”, “Final provisions” - all possible nuances related to installment plans are discussed here. The responsibility of the parties for failure to fulfill obligations, the buyer’s responsibility for late payments and methods of collection, force majeure, etc. are prescribed;
• Include a clause according to which the buyer will not be able to sell and re-register the car;

Under no circumstances include the buyer in the vehicle passport. This can only be done after final settlement with you.

Often drivers who have not yet paid the installments get into accidents or violate traffic rules and receive fines. To ensure that there are no claims against you, add an appropriate clause on road accidents and fines to the contract.

In addition, force the future owner to insure the car by taking out CASCO insurance. This procedure, although expensive, will save you from possible problems in the future.

Registration of a loan agreement

The essence of executing such a transaction is as follows: you lend an amount equal to the cost of the vehicle, after which the buyer simply repays you the debt.

This is a more complex procedure, but it is considered more reliable than the previous one. According to it, a purchase and sale agreement with installment payments is replaced by promissory notes.

To complete such a transaction, it is necessary to draw up and sign 3 documents.

• Contract for the purchase and sale of a vehicle (there is no need to indicate that the goods are purchased in installments).
• The loan agreement is the main document of the transaction. Based on it, you will receive the agreed payments. This document specifies all the points regarding installment plans that were discussed earlier in the previous version.
• An agreement on the basis of which a car acts as collateral . This document is drawn up as insurance. After signing it, the car being sold becomes collateral.

The loan agreement and the pledge agreement must be notarized.

Selling a car by receipt

This is the most risky way. It is better to resort to it in extreme cases (for example, you have problems with documents for a car). Nevertheless, he has the right to life.

Using this sales option, you transfer the right to drive your car to the buyer, taking a receipt from him that he agrees to pay for his purchase within the specified period.

In order to sell a car in installments against a receipt, you must prepare the following documents:

1. A receipt confirming the buyer's financial obligations . This document must contain the following information:

• Passport details of both the seller and the buyer;
• Detailed characteristics and data of the car;
• Terms of the transaction;
• Payment schedule;
• Sanctions for failure to fulfill obligations.

1. Power of attorney to drive a car . Based on this document, you grant the buyer the right to drive your vehicle.

After signing all the documents, the receipt remains with the seller, and the power of attorney remains with the buyer.

After the buyer pays the entire agreed amount, you can draw up a sales contract and enter the buyer into the vehicle passport.

How are payments made?

The buyer can pay off the debt in 2 ways.

1. Personally transfer the agreed amount to you monthly . In this case, each time you will have to write a receipt that will confirm the fact of transfer of money.
2. Using non-cash payment . You provide the buyer with a bank account number to which they will transfer funds. Each of you will collect checks independently.

Buying a car is a major purchase. Sometimes a buyer pays money for a car for more than one year. But money has the ability to depreciate. In this case, many sellers calculate the final monthly payments as follows.

Amount of monthly payments under the agreement * Coefficient of change in the ruble exchange rate.

Rate change coefficient = Exchange rate as of today / Exchange rate on the day of purchase.

How to sell an apartment in installments

In order to sell a house in installments, an apartment or other real estate, you need to remember that often the maximum period for an installment plan for real estate is 12 months. Sometimes, by agreement of both parties, the debt can be repaid within 24 months.

The deposit you must take from the buyer is 50% of the cost of the apartment.

When selling a plot in installments, or other property, you must draw up and sign a purchase and sale agreement, which will stipulate the following conditions:

• Payment terms;
• Minimum monthly contributions;
• Amount of down payment;
• Circumstances that will be considered force majeure;
• Encumbrances on property (the buyer will not be able to resell it until full settlement with the seller).

Selling any property in installments is a rather complicated process. If you have never encountered such procedures, you can easily be confused and deceived. In order to avoid becoming a victim of scammers, we recommend seeking help from lawyers. They will accompany you at all stages of the transaction and protect you in every possible way.

Risks associated with installment sales

Installment plans involve certain risks for both the buyer and the seller. But still, the person who sells the product risks more.

Let's look at the main problems that arise after applying for an installment plan and possible solutions to solve them.

Problem	Solutions
Lack of payments due to buyer's financial difficulties	In this situation, we advise the seller to show humanity and figure everything out. Maybe you can offer a more flexible payment schedule or give a deferment
The buyer somehow resold your property without paying for it in full	In this case, you need to go to court. If all the documents were drawn up properly, then there is a high probability that your property will be returned to you.
Serious defects in the purchased goods have been revealed or, for example, your apartment burned down because of the buyer, and he refuses to pay money for it	In this case, the deed of transfer of property will come to the rescue. Or you can invite an independent expert to resolve the controversial issue. With evidence in hand, you can go to court
The buyer has disappeared, does not communicate and does not make required payments	In this case, the person must be put on the wanted list.

Conclusion

Regardless of whether you want to sell a plot of land in installments, a garage, your house or a washing machine, you need to protect yourself by correctly drafting and signing the purchase and sale documents. It’s better not to rely on people’s decency, because there are cases when even relatives deceive.

We advise you to thoroughly understand this issue or seek legal assistance from specialists. Then the risks will be minimal.

Selling an apartment with installment payment, the pros and cons of this transaction

Selling an apartment in installments is a good way for the seller to sell his own apartment in the shortest possible time, and the buyer can avoid a dangerous adventure with a mortgage loan.

Sale of residential space between citizens without the mediation of a bank

Any seller of real estate often observes cases when the buyer does not have the required amount of funds to pay immediately, but he does not want to count on the most suitable buyer, and there is no time left for this. This is where installment plans come to the rescue. Moreover, it applies both to an agreement between citizens and to the purchase of housing from an organization.

The new term “mortgage” has long been firmly rooted in the understanding of Russians, but not everyone realizes that there is a difference between a mortgage loan and a mortgage. In the first situation, the agreement is concluded by three parties, where in addition to the two parties, a third party will also participate. This is a banking organization that allocates funds for a transaction for an extended period of time and at an unsustainable interest rate.

In the second situation, a mortgage is a type of pledge where real estate is given for the disposal and use of the purchaser, but it cannot be sold or bequeathed until the final payment of the entire cost for the residential premises.

The advantage of a mortgage agreement is that the banking organization is the security, and the buyer will not be left without funds.

The disadvantage is that you need to rely only on your own strength and the help of an experienced specialist to complete the purchase and sale transaction of the property.

How to make a contract correctly

The use of this payment method is allowed when purchasing housing on the real estate market. Any seller, sooner or later, inevitably faces the question of how to draw up an agreement.

Two methods of concluding a transaction can be used. The most popular is the purchase and sale agreement. In this situation, the contract is concluded when drawing up an ordinary contract with an installment plan.

Ownership of the living space can be registered only after payment of its full cost. The buyer must have a complete description of the apartment in this document.

ATTENTION !!! When concluding an agreement, the buyer must have with him only an identification document, and the seller must have a set of papers confirming his ownership of the property he owns, and in addition, an extract from Rosreestr, which indicates the absence of a burden on real estate under agreements that were ever created.

A certificate of state registration of ownership is the main act that can confirm the right of ownership of this property. But, depending on different situations, other papers may be required: gift agreement, court orders, and others.

When studying the housing plan and itself, you need to make sure that illegal changes to the layout have never been made;

Agreement on participation in shared construction. This situation occurs when purchasing real estate from an organization, for example, from a developer.

In accordance with established standards, the developer is obliged to present the purchaser with a certain set of documents: constituent regulatory documents that define the legal specific features of the organization, and in addition information about the building being built.

IMPORTANT !!! The main agreement is drawn up in the usual form, and additionally a description is made of the amount of the initial payment, the installment period, the payment method and penalties for non-compliance with the payment procedure.

In addition, this agreement may indicate that acceptance of the residential premises is carried out after the final payment of the debt. It is possible to draw up this agreement only on the condition that the building was not in use.

The purchase and sale agreement must include: 

Data that is used to represent the property - the exact address of the apartment, the name and type of the property, the actual size and purpose of use. The determination of information is carried out by following the norms of the Civil Code of the Russian Federation.

• Exact cost. The price can be indicated for the full living space or per square meter (taking into account all the documentation that determines the size of the living space, the full price of the property is calculated);
• Information about all owners and registered citizens in the residential premises;
• Information about the persons entering into the agreement, and also the agreement of the spouses, which requires certification.

An agreement under which a citizen takes part in shared construction must include the following information:

• Subject of agreement;
• Definition of the seller and buyer entering into an agreement;
• Obligations of the parties;
• The price of construction work, and in addition details related to the installment plan;
• Date and conditions of housing acceptance;
• Guarantees for real estate.

When making an agreement, the purchaser must take with him an identification document, a marriage certificate and an officially certified consent of the husband or wife to carry out the transaction.

Risks when selling an apartment in installments

Selling an apartment in installments between individuals with monthly payments poses both risks for the seller and for the buyer in some situations.

When concluding an installment purchase agreement between individuals, it is necessary to take into account all possible risks. Most often, incidents occur when a malicious acquirer deliberately delays making payments in order to find a new acquirer under more convenient conditions.

If a new purchase and sale agreement is implemented, then it will be pointless for the previous owner to apply to the judicial authority and the debt will no longer be able to be returned.

The acquirer will be protected from bankruptcy only by the inclusion of a provision according to which the transfer of collateral is predetermined under specific circumstances.

ATTENTION !!! The acquirer's risks can only be connected with the secrets of the past of a given residential area, and in addition with the provision on the transfer of real estate into ownership only after full payment of the debt.

It is possible to assess the “biography” of a residential property by requesting the required papers during the period of drawing up the agreement, but in another situation it is somewhat more difficult, since the owner has the right to do whatever he wants with his property. But not everyone will go for the purchase of living space with encumbrances in the form of debts or previous residents who did not manage to check out.

Selling housing in installments through a housing cooperative

Buying an apartment through a housing cooperative is one of the options for purchasing residential property.

Such an organization presupposes a community of individuals whose collective work is aimed at acquiring living quarters.

Such an association is formed through the approval at a meeting of a charter document, which outlines all the main details of the work of the future organization.

From a practical point of view, there are several types of such organizations, the task of functioning of which is aimed at acquiring residential premises:

• housing (purchase of residential premises);
• housing construction (building a home);
• housing-storage (construction of residential premises is carried out in different buildings);
• consumer mortgage (residential premises are encumbered with collateral obligations - mortgage);
• consumer credit (citizens take out a loan to purchase residential space).

Paying taxes when selling an apartment in installments

Citizens who have received profit from the sale of real estate, which belongs to these citizens by right of ownership, and property rights, except for situations that are allowed by paragraph 17.1 of Article 217 of the Tax Code, where profit is not taxed, have an obligation to accrue and pay personal income tax.

At the same time, the income that the taxpayer receives from the sale of an apartment may be exempt from tax if such an object was owned by the person paying the tax for the shortest period of ownership of the property or more.

Moreover, the shortest period of ownership of a real estate object, the profit from the sale of which is exempt from paying tax, is three years in a situation where the person paying the tax acquired the right of ownership of the real estate object upon entering into inheritance rights or it was donated by another individual who is a member of the estate. relationship with the taxpayer, in accordance with family law.

IMPORTANT !!! At the same time, when assigning the amount of taxation for personal income tax, the taxpayer can receive a tax deduction on real estate in the amount of profit that was received by the person paying the tax during the period of time from the sale of real estate that was in the taxpayer’s possession for less than the shortest permissible period of ownership real estate, which does not exceed a million rubles.

Things to remember

From a legal point of view, the requirements of civil law apply to the sale of an apartment in installments.

Failure by the purchaser to fulfill obligations under the established constant payments gives the owner the right to cancel the agreement and return his real estate back (when the first payment was less than 50 percent of the total price of the property).

For each day of delay in payments, a penalty is calculated, unless other conditions are specified when signing the contract.

In a situation with an owner who is under eighteen years of age, it is additionally necessary to obtain confirmation from the competent authorities. When concluding an agreement on behalf of the owner by a third party, he must present a power of attorney certified by a notary.

When the purchaser is going to cover part of the price of the residential premises with money from maternity capital, the owner of the real estate needs to understand that the changes made in the law allow the Pension Fund to make payments on this capital only after concluding an agreement on the transfer of ownership of housing.

By agreeing to a contract, both the seller and the buyer have the danger of entering into an agreement with a swindler, who could be either party.

The assistance of a qualified lawyer with extensive experience in concluding agreements for the purchase and sale of real estate in installments can help to provide all the details and display them legally correctly in the agreement.

  When accepting an advance or deposit, you must write a receipt to the purchaser for receipt of funds. If he wishes to make changes to the terms of the agreement, he may lose the deposit, and the seller will have the right not to return them.

How to sell an apartment in installments to a private person without risk

Summary: [show]

When there is not enough personal finance to buy a home, many people think about taking out a loan. But it is not necessary to contact the bank, since there is an installment plan. Real estate sellers may be wary in this case because of possible risks, but selling an apartment in installments to a private person is not difficult.

Mortgage between individuals

A transaction that involves the purchase of real estate with a mortgage without banks is possible both between individuals and between an individual and a developer.

There are several types of such a transaction:

• Payment of a deposit, plus a one-time payment. 
• Deposit and monthly payments. Similar to a bank loan.
• Monthly payment.

In any case, the seller risks:

• In cash, in case of non-payment.
• The value of the property if the transaction is canceled and does not take place.
• Legal expenses if the contract is declared invalid.

To minimize all risks, it is necessary to carefully engage in legal registration.

It is necessary to understand that there is a difference between an advance and a deposit. Selling an apartment in installments to an individual without risk involves the transfer of a deposit. The deposit is non-refundable. Moreover, if the buyer refuses the transaction, the money remains with the seller. But the seller, if he changes his mind, must return the amount in double amount.

Registration process

An agreement for the sale of an apartment on credit between private individuals is not much different from a standard purchase and sale document. First of all, the parties must agree on payment.

For an installment plan document, be sure to take a closer look at the dates. The more accurately the payment schedule is specified in the document, the less risk that payments will be delayed. The schedule is certified by a notary.

Payments must also be made through a receipt with a notary.

When registering the transfer of rights in Rosreestr, both parties must declare that there is an encumbrance on the apartment. This reduces the risk that the buyer will resell or donate the property again before all obligations are fully paid. When receiving an extract from the Unified State Register of Real Estate, there must also be a note about the encumbrance.

To complete the transaction you will need the following documents:

• Real estate registration certificate.
• Cadastral passport.
• Extract from the house register.
• Certificate of absence of debts on utility bills.
• Payment of state duty.

The best option would be to contact a professional lawyer. He will help you draw up the right contract, without problems for the seller. All transactions must be completed through a notary and the document must be read carefully when signing.

Apartment in installments: agreement between individuals

You can carry out mortgage transactions, including real estate, without a credit institution. This requires a buyer, a seller, and terms of agreement. Mortgages concluded between private individuals are not yet very common due to the lack of awareness of citizens, but they can become quite popular in conditions of low demand in the secondary market.

Mortgage between private individuals: what is it?

The fact is that some people confuse the concepts of “mortgage loan” and “mortgage”. The second term is much broader. A mortgage loan requires a third party - a financial institution - to issue a secured loan.

A mortgage is a type of collateral in which the mortgaged property is transferred for the use or ownership of the debtor, and a third party is not at all necessary for this.

Thus, the essence of a mortgage is the sale of an apartment in installments, executed under an agreement between individuals. The terms of stage-by-stage payment are specified in the purchase and sale agreement. According to Russian laws, this transaction is also called a mortgage, although it is carried out without the participation of a creditor institution.

Mortgage between individuals: what are the benefits?

The issue of buying an apartment in installments is relevant for the secondary market.

On the one hand, such real estate, despite fixed prices, is in low demand, the exhibition period is delayed, and it is still very difficult to buy a secondary apartment in Moscow cheaply.

It is problematic to take out a mortgage loan for a secondary home from a bank. It turns out that sellers and buyers of real estate are simultaneously at a disadvantage.

And then, to solve this problem, you can resort to selling the apartment in installments. If the seller does not need money urgently, but wants to sell the home urgently before the price falls, he makes such a deal. This type of collateral is beneficial for the buyer if he needs this particular apartment, and large financial income is expected soon, which will help him quickly pay off the debt.

Apartment in installments: what are the risks of the parties to the transaction?

An apartment purchased on a mortgage between private individuals is registered as an object purchased for cash, with the only difference being that the terms of the installment plan must be displayed in the section of the agreement on the cost and procedure for paying funds for the object.

As for the risks, in addition to the usual ones for secondary housing (illegal redevelopment, encumbrance, etc.), there are additional pitfalls here.

Seller's risks

How to sell an apartment in installments without risk? The seller runs the risk of not receiving his money in full.

But the certificate of ownership states that the apartment is under an encumbrance, and until it is removed, the new owner has no right to do anything with the object.

The seller takes the buyer to court, which usually issues a decision to terminate the transaction. Returning the money received to the buyer, of course, is unpleasant, but the possibility of being left without money and an apartment is excluded.

Buyer's risks

The main pitfall for the buyer may be the seller’s delay in removing the encumbrance after the amount has been paid in full. And here, reliable evidence will be receipts for repayment of debt on time, certified by a notary. And it is best to register the participation of a notary in acts of transfer of money when making a transaction, in the section of the agreement concerning the payment procedure.

You can sell an apartment by assignment at any stage of construction of the house

The agreement for the assignment of rights of claim, or as it is often called “assignment,” is very common in the primary real estate market. Deputy General Director of the NDV-Real Estate company for sales, Yana Sosoreva, told Novostroy-M whether it is possible to sell an apartment purchased with a mortgage within the framework of this scheme.

What is an assignment of claims in the new buildings market?

As is known, before the registration of ownership rights of a real estate object as such, it does not exist, therefore housing in unfinished houses is sold not under a sales and purchase agreement, but through an agreement on the assignment of rights of claim. This is a type of transaction in which, in exchange for money, the seller transfers to the buyer the rights and obligations he has to the developer.

Is this scheme widespread or not today in the housing construction market? Is it used often?

This scheme is used by individuals who, for various reasons, need to resell a purchased apartment without waiting for the construction of the house to be completed. On average, 15-20% of buyers do this, and the majority of them are investors (almost 70%), who make money from the increase in the value of real estate under construction.

The fact is that tax obligations arise after registration of ownership of housing.

So investors are trying to sell an apartment in a new building before registration of real estate ownership begins.

The remaining 30% are people who changed their choice in favor of another object. They sell the purchased apartment and use the proceeds to buy another home they like.

Is it possible to sell an apartment on a concession basis at any stage of construction of a new building?

According to 214-FZ, an assignment agreement can be concluded before the apartment acceptance certificate is signed, that is, at any time and at any stage of construction. Once the title deed is received, the purchase and sale agreement is executed.

How should a shareholder act if he decides to sell his home under this scheme?

What participation does the developer take in the sale and purchase transaction regarding the assignment of rights of claim?

The developer coordinates the assignment, checks whether the apartment has been paid for, and enters the new buyer into the sales register. The realtor’s task is to organize advertising of the property being sold, find a buyer and complete the transaction itself quickly and comfortably for the buyer.

Are there any pitfalls in this scheme?

I would not say that there are any pitfalls in this scheme. The only thing that can be recommended to buyers is to check whether there are any underpaid amounts hanging on the apartment. In other words, find out the status of mutual settlements between the seller of the right and the developer, so that subsequently there will be no claims regarding payment for the real estate.

Is it possible to sell a home this way if it was bought with a mortgage or installments?

You can sell housing purchased in installments or with a mortgage under an assignment of claims. In the first case, 214-FZ provides for the possibility of assigning apartments that have not been paid in full, so that the new owner of the square meters assumes the debt. It is also possible to assign housing under a mortgage - simply the loan obligations are transferred to the buyer of the apartment.  

I note that the assignment cannot be carried out without the consent of the bank from which the loan was originally taken, therefore it is necessary to obtain approval of the transaction from the credit institution. It also happens that sellers first close their loan and then transfer the apartment.

Is it possible to sell by assignment of rights of claim if the new building is sold not under the DDU, but under the housing cooperative?

Such a sale is possible upon registration of a share assignment. A person who wants to sell an apartment leaves the cooperative and resells his share to a new buyer, which is decided at a general meeting of members of the housing cooperative.

What advice would you give to a person who is planning to sell or buy an apartment on a concession basis? What should you pay attention to?

First of all, you need to pay attention to whether the apartment has been paid for or not, in order to prevent possible misunderstandings.

What forecast would you give for the development of this scheme on the new buildings market? Will it become more popular or not?

This scheme will be in demand in the future just as it is now. Firstly, due to the large number of investors who invest in housing at the early stage of building a house, and then resell the apartment. Secondly, there will always be buyers who change their minds about purchasing real estate due to changed life circumstances.

Publication date May 24, 2013

Seller's risks when selling property in installments - Pravoved.RU

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Good afternoon, dear lawyers.

The question is the following: The situation has not yet arrived, but perhaps such a situation will develop, I am writing this to make it clear that for now there is an opportunity to do one way or another.

It is planned to sell non-residential premises; money for it is not immediately paid; by agreement of the parties, a period has been established during which they must be paid. Why this is so is our internal question, there is no point in discussing it.

Can I provide in the contract a clause with approximately the following content: “The Buyer is obliged to pay the money for the premises being sold upon the first demand of the Seller, and if there is no demand, then by 1111111.

, otherwise (further as it is more correct to formulate) the contract is terminated or the contract is considered invalid or the Buyer undertakes to return the premises to the Seller and draw up all the necessary documents to re-register the premises in the name of the Seller,” and the Buyer undertakes to transfer to the Seller the funds (income) received by him during the use of the premises?

• Further, after registering the right to the new owner, he begins to rent it out and receive a monthly profit.
• At some point, the new owner has financial problems and creditors are going to go to court to seize this person’s property and income.
• At the same time, the Seller, having learned about such problems of the Buyer, sent him a demand for payment of funds under the previously concluded purchase and sale agreement.
• Does the Seller have any risks in terms of loss of the premises or do the Buyer’s obligations to the Seller in this case take priority and the premises and income received from it cannot be foreclosed on?

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Lawyers' answers (5)

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Does the Seller have any risks in terms of loss of the premises or do the Buyer’s obligations to the Seller in this case take priority and the premises and income received from it cannot be foreclosed on?

Oleg

Hello. In general, until payment is made, the property in question is legally mortgaged.

 If the purchase and sale agreement for a property states that the Buyer makes payment after the transfer of ownership of the property to the Buyer, then in accordance with clause 2 of Art.

20 of the Law on Mortgage, state registration of a mortgage is carried out simultaneously with state registration of property rights.

Accordingly, since the specified property is pledged to the seller until payment is made, his interests in terms of receiving money under the contract are protected by this.

In this case, it may make sense in the contract to indicate the sale in installments. Then, in case of non-payment of the part specified in the contract, it can be terminated:

Civil Code of the Russian Federation Article 489. Payment for goods in installments

1. An agreement on the sale of goods on credit may provide for payment for the goods in installments.

When the buyer does not make the next payment within the period established by the contract for the goods sold in installments and transferred to him, the seller has the right, unless otherwise provided by the contract, to refuse to fulfill the contract and demand the return of the sold goods, except for cases where the amount of payments received from the buyer is exceeds half the price of the product.

This may therefore allow you to back out of the contract and return the premises if the amount paid by the buyer is less than half of what was contractually due.

Oleg, hello!

 To the seller the funds (income) received during the use of the premises?

In this case, the best option for the seller is that payment will be made according to the established schedule, and then how he will earn money is the buyer’s problem. 

You have the right to prescribe the conditions for terminating the contract, since in this case the principle of freedom of contract applies (Article 421 of the Civil Code of the Russian Federation), according to which the parties themselves establish conditions that should not contradict the law. 

Does the Seller have any risks in terms of loss of the premises or do the Buyer’s obligations to the Seller in this case take priority and the premises and income received from it cannot be foreclosed on?

In such circumstances, until the buyer pays for the purchase of the property, it will be held as collateral by the Seller by force of law.

You can additionally stipulate such a condition in the contract so that the Buyer knows that you can always foreclose by turning over the collateral, since according to Part 1 of Art.

348 of the Civil Code of the Russian Federation, foreclosure on the pledged property to satisfy the demands of the pledgee may be filed in the event of non-fulfillment or improper fulfillment by the debtor of the obligation secured by the pledge .

Good luck in resolving your issue!

With respect to you , lawyer Dmitry.

Hello, dear Oleg! 

Risk for the seller: the buyer may not pay the full price of the property and will stop making payments as scheduled. Accordingly, you will need to file a claim in court. If the buyer pays more than half of the amount specified in the contract, the court may oblige the buyer to pay the remaining amount of the principal debt, interest, and penalties.

It is necessary to provide in the contract for the transfer of ownership from the seller to the buyer.

  In cases where the purchase and sale agreement stipulates that the ownership of the goods transferred to the buyer is retained by the seller until payment for the goods or the occurrence of other circumstances, the buyer does not have the right to alienate the goods, real estate or dispose of them in any other way before the transfer of ownership rights to him, unless otherwise provided for by law or contract or does not follow from the purpose and properties of the goods (Article 491 of the Civil Code of the Russian Federation). In cases where, within the period stipulated by the contract, the transferred goods are not paid for or other circumstances do not occur in which the ownership right passes to the buyer, the seller has the right to demand that the buyer return the goods or real estate to him, unless otherwise provided by the contract. It is necessary to indicate in the contract that the property will be pledged to the seller until full payment under the contract, and ownership will pass to the buyer after full payment. The property will be encumbered, and the buyer will not be able to resell it until the debt is paid off. All the best to you. Successful resolution of your issue.

Hello! 

Does the Seller have any risks in terms of loss of the premises or do the Buyer’s obligations to the Seller in this case take priority and the premises and income received from it cannot be foreclosed on?

The non-residential premises will be pledged. But the buyer will receive income and can use it. foreclosure was applied to fulfill obligations to creditors.  

As an alternative to a purchase and sale agreement secured by property, you can conclude a preliminary purchase and sale agreement and a lease agreement with the right to sublease (Article 615 of the Civil Code of the Russian Federation).

 Under a preliminary agreement, the parties undertake to enter into a future purchase and sale agreement on the terms and conditions provided for in the preliminary agreement.

  The preliminary agreement specifies the period within which the parties undertake to conclude the main agreement. (more details about the preliminary agreement in Article 429 of the Civil Code of the Russian Federation)

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Have a nice time, Oleg!

I will complement the advice of my colleagues... As I understand, in principle you are familiar with the scheme for registering the transfer of rights with installment payment under the contract... of course the right to the property passes to the buyer and is considered to have arisen from the moment the entry is made in the Unified State Register... from the same moment a mortgage (pledge) arises by virtue of law... and the subsequent disposal of this property from the new owner is possible only with your consent (this point must be fixed in the contract) until the termination of obligations under the contract... However, this is your only priority...

creditors are going to go to court to seize this person's property and income.

Oleg

Arrests and bans can be imposed not only by the courts (in this case, these can be interim measures until a decision is made on the case, i.e.

Your mortgage will be on par with arrests and bans ... Well, this is the answer to your question...

Or are the Buyer’s obligations to the Seller in this case priority and they cannot be foreclosed on the premises and the income received from it?

Oleg

They can and I repeat, they will not ask for permission... Since the buyer, from the moment of making an entry in the Unified State Register, becomes the owner and this explains everything (the right of ownership, use, disposal). 

But, you, as a mortgagee, can always foreclose on the pledged property in court... In addition, according to Article 353 of the Civil Code of the Russian Federation, Article 32 of the Law on Pledge and Article 38 of the Law on Mortgage, the pledge remains valid if the ownership of the pledged property passes from the mortgagor to another person as a result of paid or gratuitous alienation of this property (except for cases of sale of this property in order to satisfy the claims of the mortgagee in the manner prescribed by law).

The position of the Supreme Court of the Russian Federation on this issue is that such a basis for termination of a pledge, such as the acquisition of the pledged property by a person who did not know about its encumberment with a pledge, is not specified in Article 352 of the Civil Code of the Russian Federation, which regulates the termination of a pledge.

Consequently, the transfer of ownership does not terminate the right of pledge, since the legal successor of the pledgor takes his place.

At the same time, no exceptions are provided that allow the person who acquired the pledged property to be released from the obligations transferred to him from the pledge agreement on the basis that when concluding the purchase and sale agreement he did not know about the encumbrances imposed on the property: http://www .consultant.ru/docum…

Oleg, if you have any questions or doubts, I’m always ready to answer them...

With respect and best wishes, Alina Puchko.