Buying an apartment from a legal entity: buyer’s risks

Compared to purchasing real estate from an individual, the procedure for purchasing an apartment from a legal entity is more complex. Such a transaction involves additional risks borne by the buyer. Alienation of real estate owned by an organization requires the collection of a larger set of documents and compliance with the existing nuances of this procedure. To avoid becoming a victim of fraudulent activities, you will need to carefully check the history of the living space, as well as make inquiries about the seller.

Features of concluding transactions

First of all, an individual who has decided to purchase living space from an enterprise should become familiar with the main features of concluding such transactions. These include:

1. The need to study a voluminous package of documentation. To minimize the chances of becoming a victim of fraud, you will need to familiarize yourself with the papers of both the object of the transaction and the seller. Before executing the contract, you must ensure the existence of the institution acting as the seller. It will also be necessary to exclude the possibility of bankruptcy or liquidation of the institution. Additionally, it is recommended to study the reputation of the seller’s company.
2. The need to confirm the authority to carry out the procedure for the alienation of company property by a person acting on behalf of the organization.
3. To eliminate the buyer’s risks and not to suffer from dishonest sellers, it is necessary to understand the specifics of maintaining documentation by legal entities. Often, an individual may need professional help.

In addition to the indicated features, the buyer needs to know that the law regulates the procedure for the sale of property by legal entities. According to the provisions of No. 14-FZ dated 08.02.

1998, if the value of a real estate property sold by a legal entity exceeds 25% of the total value of all property of the organization, such a transaction is classified as a large transaction.

Such transactions require approval from all shareholders of the organization. The decision to sell an apartment owned by a legal entity is made at a meeting of shareholders or the board of directors. Before concluding a transaction, the buyer must be given the minutes of the meeting, confirming the consent of all participants in the institution to alienate the living space.

The nuances of purchasing real estate from a legal entity

An institution can sell a variety of living space. It could be:

• an apartment in a building under construction or a finished building;
• secondary market real estate;
• purchase of housing under a mortgage loan agreement.

Each of these situations has its own subtleties, which it is recommended to learn about before completing the transaction.

New building

Purchasing apartments in new buildings that are under construction always involves certain risks. There is a possibility of stopping construction work, delaying the commissioning of the building, as well as difficulties with paperwork. All these phenomena threaten the buyer with loss of money and waste of his nerves.

Before agreeing to enter into such a transaction, it is recommended to carefully study the developer’s documentation. It would also be a good idea to check his reputation by familiarizing himself with the objects already delivered.

Help: to reduce the risk of being deceived, it is recommended to verify the legality of the construction and personally check at what stage the work is at.

If the organization is not a developer, but acts as a construction investor, then an agreement must be concluded between the parties confirming the existence of the right to claim one or more apartments.

In the case of purchasing living space in a new building from a company that is not a developer, the buyer needs to find out what agreement gives the seller the right to the real estate being sold.

The right of claim can be confirmed:

• equity participation agreement (PAA);
• any other agreement (for example, investment).

If the property belongs to the seller on the basis of the DDU, then the right of claim to it must be registered with Rosreestr. Having received an extract from the Unified State Register of Real Estate, the buyer can make sure that he is purchasing an apartment from a company that legally owns it.

If the seller owns an apartment on the basis of any agreement other than the DDU, then his rights to this living space are not secured at the state level, but are conditioned by the existence of certain agreements with the developer.

When concluding such a transaction, you will need to seek the help of a lawyer to clarify the grounds for the seller’s right to claim a specific apartment.

Buying housing on the secondary market

After studying the extract, the buyer will need to find out on what grounds a specific legal entity acquired ownership of this apartment. It is also necessary to familiarize yourself with a number of documentation of the company acting as the seller.

After reading and checking all the papers, you can proceed to preparing documents, concluding and registering the transaction. The algorithm of actions here is the same as when concluding a policy agreement between individuals.

Purchasing housing from a legal entity with a mortgage

The bank will not approve the purchase of an apartment under construction from a legal entity that is not a partner of the lender. Purchasing secondary housing with a mortgage is allowed, but concluding such a transaction will take more time, since the bank will need more documents, and their verification will be carried out more thoroughly.

Make a deal

Registration of a real estate purchase and sale transaction between a legal entity and a citizen is practically no different from undergoing a similar procedure by individuals. Only the preparatory stages are different.

To purchase an apartment and organization you must:

1. Checking the seller and the living space being sold. It is recommended to familiarize yourself with the constituent papers of the legal entity, extracts from the Unified State Register of Legal Entities and the Unified State Register of Legal Entities, as well as other documents for real estate.
2. If the information received does not cause concern to the buyer, you can begin to draw up a purchase and sale agreement (SPA). To properly prepare the document, you can hire a lawyer or notary.
3. Before signing the DCP, you will need to make sure that the person representing the seller’s interests is vested with the appropriate powers. This may be permission to conduct a specific transaction or a general power of attorney.
4. Draw up an apartment acceptance certificate and sign the agreement.
5. Make a partial payment (if provided for by the terms of the contract).
6. Register the transaction in Rosreestr.
7. Perform residual calculation.

If all stages of the procedure are completed correctly, the parties will not have grounds to challenge or cancel the transaction.

What documents will be required

The list of documents may differ depending on the category of the transaction (major or not). The standard set includes:

1. Passports of the parties to the transaction.
2. Power of attorney addressed to the representative of the organization signing the DCP.
3. Papers confirming ownership of the apartment.
4. Technical documentation for real estate.
5. A document confirming the absence of debts for housing and communal services.
6. Certificate of absence of registered persons in the apartment.
7. Documents of a legal entity.
8. Consent of all founders of the organization (minutes of the meeting), if necessary.

You will also need to request fresh extracts from the Unified State Register and Unified State Register of Legal Entities from the seller.

Payment

Payment between the parties can be made in any convenient form. It is not prohibited to pay in cash. In this case, it is necessary to ensure that the seller gives the buyer a check or other document indicating the receipt of funds.

A more reliable method of payment is a non-cash transfer to the bank account of a legal entity. You can also use a letter of credit for payments. In any case, payment must be made according to the conditions specified in the contract.

Buyer's risks

When purchasing an apartment from a legal entity, the buyer should become familiar with the possible risks inherent in this transaction. A person wishing to purchase real estate from a company should be wary if he discovers the following facts:

• the seller’s company is not in the unified register (USRLE);
• the organization is undergoing liquidation or creditors have filed claims leading to bankruptcy;
• the rights of a legal entity to the apartment are not registered;
• the company representative cannot confirm his authority;
• the power of attorney issued to the seller’s representative has expired;
• the company did not provide a complete set of documents confirming the seller’s decision to alienate the property;
• providing false documents;
• identifying cases of financial fraud on the part of the seller.

It is recommended to entrust the verification of these points to a professional lawyer. It is easy for a person who does not have special knowledge and skills in this area to become confused by the volume of documentation to be studied.

How to reduce risks

In addition to carefully studying the documents of a legal entity and papers for alienated real estate, it is recommended to make an attempt to get to a meeting of the organization’s participants dedicated to making a decision on the sale of housing.

If the seller refuses to give the buyer an extract from the Unified State Register or promises to present it at the time of concluding the transaction, it is recommended to order this document yourself by contacting Rosreestr. If the extract contains information about frequent transfers of ownership rights, this should alert the buyer.

When purchasing housing on the secondary market, it is recommended to obtain a certificate of registered residents a few days before concluding the transaction. Registration of citizens in an apartment after a verbal agreement with the seller is also a cause for concern.

Conclusion

The law does not prohibit citizens from buying real estate from legal entities. Such procedures require more preparation and caution due to the presence of various subtleties when working with documents. To protect yourself, it is advisable to conduct a transaction accompanied by qualified specialists.

If you have any questions, you can ask them free of charge to the company’s lawyers in the form provided below. An answer from a competent specialist will help you make the right decision.

Buying an apartment from a legal entity: buyer’s risks

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When purchasing an apartment from a legal entity, the buyer’s risks cannot be discounted. To secure your purchase, you need to know exactly how the transaction is carried out and what pitfalls there are. This will allow you to take a more conscious approach to choosing a developer and insure yourself against possible fraud.

How to buy an apartment from a legal entity

The cheapest housing is in a new building. Moreover, the sooner you get involved in construction, the less you will have to pay per square meter. When a house is at the foundation pit stage, housing can be purchased 30-40% cheaper than on the secondary market. Until the house is completed, prices are 10-20% lower, depending on the completion of construction .

At this stage, it will not be possible to conclude a purchase and sale agreement for an apartment with the developer - a legal entity, since in fact the residential property itself does not exist. Therefore, most often the parties sign a share participation or investment agreement.

The essence of both of these types of agreements is that the future tenant is actually sponsoring the construction. According to the agreement, he transfers money to the developer, who uses it to build a new building. It is beneficial for an investor to join at an early stage of construction, when the company most needs an injection of funds.

As soon as the construction is completed, the legal entity registers the housing as its own property, and then, upon assignment of rights, in the name of the shareholder.

Thus, by entering into share ownership, the tenant actually acquires not the housing itself, but the right to claim his apartment from the developer when he completes construction.

Transaction options

An example of mortgage programs from a large developer PJSC PIK Group of Companies.

It is clear that an ordinary person is unlikely to have several million rubles at once to pay for the purchase of housing, even if it is still under construction. Therefore, developers offer several calculation options:

• in installments - the shareholder pays the amount to the developer’s account in installments (agreed or arbitrary);
• by selling shares - the future tenant actually acquires securities of the housing cooperative, which he will subsequently exchange for an apartment;
• in a mortgage through the bank that accredited the developer.

Each method has its own advantages and disadvantages. The most convenient way for the borrower is, of course, installments. There is no overpayment here, as with a mortgage, and there is no risk of a sudden depreciation of the shares of the housing cooperative.

But this method has a significant drawback: if you do not save evidence of payment, the developer may cheat and underestimate the amount of investment or even deny the fact of transferring money .

Features of buying a new building with a mortgage

Mortgage calculator in Sberbank for a new building.

Most often, home buyers take out a mortgage to pay off the developer. A loan is usually obtained either from a payroll bank or from an institution with which the construction company has established a partnership.

Key points to consider:

• To obtain a mortgage, you will need to make a down payment - usually 15-20% of the exhibited price of the home;
• funds are transferred to the developer’s account, the individual does not receive access to them;
• a tripartite agreement is concluded between the developer, the bank and the borrower, according to which the property is transferred to the bank as collateral after completion of its construction - the buyer will be able to remove the encumbrance only after the mortgage is fully repaid.

The greatest risk when purchasing a new building with a mortgage is that the developer will delay delivery of the house. As a result, the borrower will be forced to continue renting a home or live somewhere with relatives, while simultaneously paying off the mortgage and not being able to move into his own apartment.

What risks accompany the transaction?

The main risk that a buyer should take into account when purchasing an apartment from a legal entity is possible fraud on the part of the developer. The most common options:

• selling the same apartment to two or even three different buyers - in this situation you have to find out in court who paid for the housing first, and the rest have to wait for compensation from the developer;
• deliberately delaying the construction or delivery of a finished house;
• refusal to transfer ownership under any pretext;
• provision of an apartment for living that is not of the size or layout specified in the contract;
• cancellation of a contract based on forged documents.

In addition, some unscrupulous developers initiate deliberate bankruptcy proceedings. As a result, shareholders are left without money and without an apartment, albeit with the right to demand compensation from the bankrupt enterprise. Since, by law, shareholders are third-priority creditors, in fact they rarely wait for compensation.

If a developer sells his apartments through a representative - another legal entity, then he does not even have to declare bankruptcy.

There are precedents when a housing cooperative or a representative of a developer who sold shares on his own behalf declared bankruptcy.

The result is a legal conflict: the developer formally promised nothing to anyone, and the shareholders cannot get him to fulfill his obligations.

What to pay attention to when signing documents

Knowing about the pitfalls mentioned above, the future shareholder can take a more balanced approach to choosing a developer and preparing documents. Please pay attention to the following points :

• what is the reputation of the developer, how many properties has he delivered, whether buyers have had problems buying a home and registering the transaction;
• what condition is the property in, is the house being built now and at what pace;
• does the developer have a construction permit, license, or membership in an SRO;
• analyze the housing tenure regime - the ideal option is when the land is purchased, but if the plot is leased, then the term should not expire in a couple of years.

Particular attention should be paid to the analysis of the contract. It must indicate :

• layout, number of rooms, project area and other parameters of the apartment;
• degree of delivery of housing - finishing, roughing or turnkey;
• liability of a legal entity for failure to deliver housing on time;
• options for resolving the situation if the developer declares its financial insolvency;
• settlement of disputes.

It is also advisable to enter into an equity participation agreement (EPA), which stipulates the right to claim the apartment after completion of construction, and not an investment agreement or purchase of shares. This way the likelihood of cheating will be much lower.

Some experts advise paying only 50% of the cost of the apartment before handing over the house, and the rest - after drawing up a contract for the sale and purchase of living space in Rosreestr. But this works if only the developer meets halfway, and the buyer has the entire amount in his hands.

Unfortunately, even the developer’s impeccable reputation and good financial condition do not guarantee that the process of transferring an apartment from a legal entity to a private buyer will go without complications..

At the same time, the builder does not necessarily turn out to be a fraudster - sometimes the delivery of the house may be delayed due to disputes over the ownership of the land or regulatory authorities will not give permission to put the house into operation for some reason.

What will change from 2023

To protect the rights of shareholders, the Government has developed a new payment scheme for private home buyers in new houses.

From July 1, 2023, the usual DDUs will no longer exist; instead, project financing through the intermediation of a bank will be introduced . The new scheme does not involve transferring money directly to the developer, as was the case before, which reduces the chances of misappropriation of funds and the risks of fraud on the part of the construction company to almost zero.

In general, purchasing an apartment in a new building from a law firm will look like this:

• the developer or a specially created company opens an escrow account with a partner bank;
• the investor (acquirer) enters into a tripartite agreement with the bank and the legal entity representing the developer, and deposits the required amount into a bank account or arranges a mortgage there;
• the funds are in an escrow account and serve as collateral against which the developer takes out a bank loan for the construction of buildings;
• Once the house is completed and put into operation, funds from the escrow account will be transferred to the company, with the exception of loan servicing costs.

If for some reason the developer declares bankruptcy, he will be liable with his property to the bank - the main creditor. The failed shareholders will receive their money back.

Thus, many of the buyer’s risks when purchasing housing from a developer in a new building will be removed.

Of course, the new rules will lead to higher housing prices, as well as the squeezing out of small construction companies from the market, especially since the requirements for these same companies will also be tightened. But shareholders will find themselves in a privileged position.

Features of purchasing an apartment from a legal entity on the secondary market

Legal entities sell housing not only in new buildings. Real estate companies and real estate agencies can sell apartments on their own behalf. Developers, after completing the house, sell the housing as a secondary housing project - with a higher markup.

Official website of the FSSP of Russia

What should a buyer be prepared for and what risks are possible?:

• sale using forged documents, including by power of attorney - the company may not actually own the apartment, so the true owner of the property will have every right to evict new tenants through the court;
• sale of a seized or mortgaged apartment - to avoid this, request an extract from Rosreestr, and also “run” the address on the websites of the court and the bailiff service;
• sale under an expired power of attorney - such a transaction can easily be considered void, since the legal entity did not have the right to sell the living space;
• conducting a transaction with an overpayment - just pay attention to the middle price segment, it is possible that they are trying to make money from you.

What should you be wary of?:

• the seller is in a hurry to conclude a deal, not allowing him to think and carefully check the documents;
• the apartment is sold at a price significantly below the market;
• not all documents have been provided;
• the transaction involves children and incapacitated persons, and there is no permission for the sale from the guardianship authority;
• the apartment recently changed owner (died, moved, was declared missing);
• the apartment changed owners too often (look at the extract from the Unified State Register of Real Estate).

It may turn out that the apartment is the subject of a dispute, for example, between heirs. Or it has undergone illegal redevelopment. Therefore, if the actions of a representative of a legal entity are of a strange nature, it is better to refrain from buying a home.

Universal protection against risk is the registration of title insurance - i.e. loss of property insurance. As a rule, the price of such a policy is 1-2% of the cost of housing.

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Buying an apartment from a legal entity

Transactions for the purchase (sale) of housing are not always carried out between individuals. Various organizations can also act as its seller . Purchasing an apartment from a legal entity carries certain risks for buyers, so it is important to know how to enter into such a transaction correctly. We will tell you further about the nuances of registering the purchase of an apartment from an organization.

Sale of an apartment by a legal entity to an individual - features

The legislator allows the conclusion of transactions for the sale of housing between different persons. It is possible for a legal entity to purchase an apartment from an individual. Organizations can also act as sellers of housing.

Most often they offer apartments for sale in housing under construction. Intermediaries usually handle the sale of apartments in new buildings on behalf of the developer. The sale of housing on behalf of legal entities can also be found on the secondary market.

Sale of an apartment legal. face to individual has a number of features.

• Firstly, before completing a transaction, buyers will have to study a large volume of documents. After all, in order to protect yourself, you should familiarize yourself not only with the documentation for the apartment itself, but also for the person selling it. It is important that at the time of signing the contract the seller organization is active and not in the process of bankruptcy or liquidation. It’s also a good idea to study the reputation of the future counterparty.
• Secondly, when alienating housing by companies, it is necessary to check the consent of its participants to the transaction and the authority of a specific person to sign papers. If the transaction is large in value for the company, then it may require the approval of its participants. Otherwise, the sale may be subsequently challenged. The person concluding a transaction on behalf of the organization must have appropriate valid authority.
• Thirdly, when making transactions with legal entities, buyers face more risks. It is often difficult for ordinary citizens to understand the documentation of organizations, so they are not always able to recognize fraudulent activities. Agreements may be signed by the wrong persons or without the consent of company participants. And this entails the invalidity of the concluded transactions.

The procedure for purchasing an apartment from a legal entity is in many ways similar to purchasing housing from individuals.

This includes:

• selection of a property suitable for personal requirements;
• checking the apartment and documents of a legal entity;
• drawing up and signing an agreement;
• transfer of money as payment;
• property registration.

Depending on the specific case of purchasing real estate, the previously stated procedure may be slightly modified or supplemented, and such cases will be discussed in detail below.

In a new building

At its core, buying a home in a new building is almost always a transaction with a legal entity - a developer or a real estate agency.

For this reason, the procedure has a standard form for such cases, but it is recommended to pay special attention to the nuances:

• when purchasing a home during the construction stage, carefully check all the necessary documents and permits from the organization acting as the seller;
• make sure that the developer already has successfully completed and commissioned projects behind him, read reviews from real home buyers;
• pay for the transaction only after the concluded agreement for the purchase of an apartment is officially registered in the Unified State Register of Real Estate.

Be aware of possible fraud and risks, which increase significantly when purchasing real estate from a legal entity in new buildings. Save your time and money.

On the secondary market

• Buying an apartment on the secondary market, owned by a legal entity, is a less risky operation.
• The main key to success is a thorough check of the seller’s documents and a realistic assessment of the purchased property.
• Then everything follows a familiar pattern:

• collection of documents;
• signing a purchase and sale agreement;
• mutually secure transaction payment;
• registration of ownership by the buyer.

To minimize possible risks, you can contact the services of a professional real estate agency or a realtor experienced in such matters.

For a mortgage

1. Purchasing real estate from a legal entity with a mortgage is practically no different from a regular transaction - here it is also necessary to collect and submit to the bank a certain set of documents, evaluate the property and send an appraisal certificate to the bank.

2. The main difference is that the money issued by the bank will not be sent to the account of an individual (as in the usual case), but to the current account of the organization from which the property is purchased.

3. In some cases, a legal entity may require a down payment before completing a transaction, which is normal practice.

Registration procedure

The procedure for completing the transaction is similar in the case of purchasing an apartment from a private person. At least for the buyer, the principle remains the same: signing the contract, settlement and registration of ownership.

A legal entity will need:

• obtain permission from all founders;
• collect the necessary documents.

The list of documents for both parties is presented below.

Documentation

The buyer will need the following documents to complete the transaction:

• passport;
• consent of the spouse to purchase property (if the transaction is made during marriage);
• documents confirming solvency (when taking out a mortgage).

A legal entity will have to try to collect the following documents:

• a document base;
• technical and cadastral passports of the property;
• tax certificate;
• certificate from the management company;
• copy of personal account;
• constituent documentation of the organization.

The basis document is a paper whose purpose is to confirm the route of transfer of an apartment into the ownership of a legal entity from the previous owner.

Calculation

Payment for a transaction with a legal entity can be made in one of the following ways:

• non-cash payment to the organization's current account;
• bank letter of credit.

Cash payments cannot be made in a transaction with a legal entity - this also applies to the case of the acquisition of real estate. This should be taken into account before making a transaction.

Taxation issues

When selling real estate, a legal entity is subject to taxation, which in this case has its own characteristics and depends on the category to which the person belongs.

Thus, it is known that transactions for the sale of residential property are exempt from VAT. In this case, the legal entity will only need to pay tax on the profit received.

Common scams

• minutes of the founders' meeting;
• written consent of the founders of the organization, drawn up in any form.

It is not uncommon for these documents to be falsified in order to save time or personal enrichment. Due to such actions, the transaction may be declared invalid by the court, for example, in the case where one or more founders filed a lawsuit due to their disagreement with the sale of the property. The decision of such a court usually orders the return of funds to the buyer. However, in practice, such a procedure may be delayed for a very long time or not performed at all.

Particularly noteworthy is a power of attorney , which confirms the authority of the person signing the agreement.

It must be drawn up either for a specific transaction, indicating its parameters, or a general one, which involves the possibility of alienation of the assets of the enterprise.

A power of attorney can be one-time (for a specific transaction with an indication of its parameters) or general (implies a wide range of powers, including the alienation of enterprise assets).

Underwater rocks

Buying an apartment from a legal entity is one way or another associated with numerous risks.

In practice, the following situations may arise, during which time, money and ownership of the purchased housing may be wasted:

• selling real estate using fake documentation: taking on such a risk is very dangerous, since if the court declares the transaction invalid (which is most likely what will happen), the buyer will be left without an apartment and money - there will be no one to return them;
• sale of an apartment by a person with limited legal capacity: as in the previous case, there is a risk of termination of the sales contract if the seller proves his own limited legal capacity in court, resulting in wasted time and money;
• sale of an apartment inherited using forged documents: there is also a risk that the purchased property will be claimed by heirs who, for whatever reason, did not enter into the inheritance and will go to court to terminate the transaction.

In practice, other unpleasant situations may occur, as a result of which, at best, time will be wasted.

You should beware of scammers and carefully check all the details.

Risks

The main risk when concluding a transaction with a legal entity is selling using forged documents. However, it is much easier to prepare false documentation here:

• If the meeting of founders is punctured, it is not possible to verify the authenticity of the signatures of all its participants, whereas if there is a forged document, the transaction will be declared invalid.
• A power of attorney to conduct transactions is issued by the director and can be forged.
• Even if the power of attorney is genuine, there is a risk that permission to carry out this type of activity is not stated in it (you must carefully study all points of the document).

Other possible risks:

• Declaration of a legal entity as bankrupt at the time of the transaction.
• Liquidation of the legal entity at the time of conclusion of the contract.

✔ Possible fraud

The most common fraud schemes when purchasing an apartment from a legal entity:

• Creation of a one-day company, the purpose of which is to conclude a purchase and sale transaction and subsequent liquidation.
• A general power of attorney giving the right to perform any transactions can be obtained under pressure, which will lead to the recognition of the transaction as invalid.
• Lack of privatization of housing, which also leads to the recognition of the transaction as void.
• Indication in the contract of the estimated value of the BTI instead of the market value, which is several times less. The rest of the money is transferred in cash, which ultimately affects the amount of the tax deduction and the amount to be returned if the transaction is declared invalid.

✔ Overpayment

In transactions with a legal entity, the buyer may overpay for:

• Opening a letter of credit (concluding an agreement is paid).
• Bank transfer fee.
• Hiring a notary to certify certain documents.

However, all these financial expenses are justified because they increase the reliability of the transaction.

Required documents

Buying an apartment from a legal entity. person is carried out on the basis of certain documents.

Depending on the type of housing purchased and its cost, the amount of required paperwork may vary. In general, their list looks like this:

• passports of persons signing the agreement;
• power of attorney (other document) for the person signing the agreement on behalf of the organization;
• documentation for real estate (title and technical);
• information about the absence of debts for payment of housing and communal services;
• certificate confirming the absence of registered residents in the apartment;
• legal documents face;
• consent to the transaction from the founders (if required).

When purchasing an apartment in a new building, you should make sure whether there is a permit for this construction, and whether the intermediary’s rights to sell the home are properly registered.

How is payment carried out?

Payment for an apartment purchased from an organization can be made in various ways.

It is not prohibited to pay in cash. In this case, the buyer must be given a check or other document confirming receipt of funds. But this method is considered less reliable.

Another option is to transfer funds to the company account by bank transfer. Another way is to use a letter of credit. Its peculiarity is that the bank opens a special account, debiting funds from which is possible only under certain conditions.

For example, the seller can receive funds upon presentation of documents confirming the transfer of rights under the transaction to the buyer.

Features of purchasing with a mortgage

The easiest way to purchase an apartment with a mortgage from a legal entity is to purchase housing from a development company that has a partnership with the bank.

Such companies sell apartments both in already built buildings and in those at different stages of construction.

The undoubted advantage of such a transaction is that it reduces the risk of fraud on the part of the seller to a minimum, since the bank conducts a thorough check of them.

Purchasing an apartment from a legal entity requires more care and preparation than purchasing it from an individual. This is explained by the large presence of various nuances and subtleties in the documents. Therefore, it is better to prepare for such a transaction with a specialist.

Video about purchasing real estate from a legal entity

How to minimize risks when signing transactions with legal entities

Transactions with apartments legal. individuals require greater caution from buyers.

The buyer's risk of being caught by scammers is very high. Therefore, before purchasing, you should conduct a thorough check of the organization's rights to exercise it. A person wishing to purchase housing from a legal entity. individuals should pay attention to some points:

• you need to check whether the organization itself is active, for this you can request an extract from the Unified State Register of Legal Entities;
• Next, it is important to check what rights the organization has to the property being sold and how they are confirmed;
• It is also necessary to find out whether the procedure for making a decision on sale by the organization has been followed;
• you need to check the authority of the person who is going to sign documents from the organization;
• it is worth establishing that there are no debts for housing services and tenants in the apartment;
• It is advisable to consult an experienced lawyer before entering into a transaction.

When purchasing an apartment registered in the name of a legal entity, you should also be attentive to payment issues under the transaction.

If the seller’s representative simply asks to give him money on a receipt, then you should think about the legality of his actions. It is better to avoid cash payments when making transactions with organizations.

Buying an apartment from a legal entity: the buyer’s risks - About the garden and the house

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It should be remembered that purchasing an apartment from a legal entity is a procedure associated with increased risks for the buyer.

Our expert, a lawyer by training, Ivan Lukin, understood all the existing pitfalls and nuances of the procedure.

Legislative justification

Legal entities are organizations that have separate property and are liable to them for their debt obligations, as well as having the authority to acquire, exercise and change their civil rights and obligations (Part 1 of Article 48 of the Civil Code of the Russian Federation).

Legal entities must have an organizational and legal form (PJSC, NJSC, Federal State Unitary Enterprise, Municipal Unitary Enterprise, LLC, etc.). The specifics of the activity are regulated by relevant laws, for example:

1. Federal Law No. 208 of December 26, 1995 “On Joint Stock Companies...” (hereinafter referred to as Federal Law No. 208);
2. Federal Law No. 14 of February 8, 1998 “On Societies...”, etc. (hereinafter referred to as Federal Law No. 14).

Transactions for the purchase and sale of real estate with legal entities are regulated by:

• Paragraph 7 of Chapter 30 of the Civil Code of the Russian Federation;
• Housing complex of the Russian Federation;
• RF IC;
• Federal Law No. 214 of December 30, 2004 “On participation...”;
• Federal Law No. 218 of July 13, 2015 “On State...”;
• other legal documents.

Features of transactions with legal entities

The main feature is that transactions involving the alienation of property of a legal entity can be considered major.

To complete such a transaction, the general director of the company needs to coordinate it with other participants of the legal entity. Therefore, the sale of real estate will require either a decision of the board of directors or minutes of the shareholders’ meeting.

In addition, the buyer needs to check the authority of the person carrying out the purchase and sale on behalf of the company.

As a rule, the organization’s Charter may contain a provision that the general director or chief accountant has the right, without a power of attorney, to act on behalf of the legal entity, sign all documents, etc.

However, another member of the company can also be given this right - in this case, he must have a power of attorney.

Possible options for transactions with a legal entity

An individual can enter into exactly the same contracts with companies as with citizens. That is, you can purchase real estate:

The procedure itself is also little different. That is, as in the case of a transaction between individuals, you will need:

• find a suitable option (advertising sites, newspapers, magazines, television, radio, etc.);
• carry out all kinds of checks on the “legal purity” of the property being sold and check the seller’s documents;
• draw up and sign the purchase and sale agreement in 3 copies (1 for the seller, 1 for the buyer and 1 more for Rosreestr);
• receive an apartment under a transfer deed;
• register the DCP in Rosreestr.

What documents must the seller-legal entity provide?

The company selling the property is required to collect and prepare the following package of documentation:

1. a document confirming the powers of a person acting on behalf and in the interests of the company (not required if the corresponding powers are specified directly in the Charter or other constituent document);
2. passport of a proxy or other document confirming identity;
3. cadastral and technical passport for the property;
4. the basis document confirming the emergence of the legal entity’s ownership of the relevant object (DCP, trust management agreement, etc.);
5. the seller's constituent documentation;
6. decision of the general meeting of participants (or the sole founder), if the transaction is large;
7. an extract from the Unified State Register of Legal Entities (required to verify by the buyer that the legal entity was not closed due to bankruptcy or for any other reason);
8. a document containing the details of a legal entity for the transfer of funds (if settlements between the parties will be carried out by bank transfer);
9. a certificate from the management company confirming that there are no debts on utility bills.

The buyer will need only 3 documents:

• general passport;
• power of attorney (if the transaction is not carried out by the buyer himself personally, but by his representative);
• written consent of the spouse (if the buyer is in a registered relationship).

What risks does the buyer have?

Basically, the buyer’s risks lie in the fact that the transaction can be terminated in court at the request of interested parties or declared void without a court decision at all, if:

1. the legal entity at the time of signing the agreement was liquidated, reorganized, etc.;
2. the person who signed the DCP did not have the appropriate authority;
3. the collegial body of the organization did not approve the completion of a major transaction;
4. Forged documents were provided, which may include the Charter, a copy of the decision of the general meeting, and a power of attorney confirming the powers of the representative.

To some extent, you can protect yourself from possible problems in the future as follows:

1. By independently requesting an extract from the Unified State Register of Legal Entities

In this case, no state fee is charged for the provision of the corresponding service (clause 36 of the Administrative Regulations approved by Order of the Ministry of Finance No. 5n dated January 15, 2015 “On approval...”).

However, a fee is charged, the amount of which is established by Government Decree No. 462 of May 19, 2014 “On the amount...” - 200 rubles. However, this fee will only apply if you order a paper statement. If you order electronically through the Tax Office website, you do not need to pay anything (Letter of the Federal Tax Service No. GD-4-14/14094@ dated August 11, 2015).

• 2. Check the power of attorney
• Since the power of attorney is certified by the head of the company, the only way to verify its authenticity is to contact the general director directly with a corresponding request.
• You should also pay attention to the type of power of attorney:

• general – gives the right to perform any actions with property over a long period of time;
• one-time – only one transaction can be made on its basis;
• special – used for representation in the judiciary.

The power of attorney must contain the following powers:

1. right of sale;
2. the right to receive cash (if payments are made in cash);
3. the right to sign official documents.

3. Order an extract from the Unified State Register of Real Estate in relation to the property being purchased

The extract can be ordered both in paper and electronic format (clause 4 of Order of the Ministry of Economic Development No. 968 of December 23, 2015 “On establishing...”). Its form is approved by Appendix 1 to Order of the Ministry of Economic Development No. 975 of December 25, 2015 “On approval...”.

You will have to pay to provide such an extract. From individuals:

• 300 rubles – for an extract in electronic form;
• 750 rubles – in paper form (Order of the Ministry of Economic Development No. 291 of May 10, 2016 “On the establishment of...”).

It is important that the extract from the Unified State Register does not contain information about restrictions (encumbrances) on ownership rights - that is, about the apartment being under arrest, in collateral, etc. You should also check that the legal entity is really the owner.

4. See if bankruptcy proceedings have been launched against the legal entity

You can check it through the Unified Federal Register of Bankruptcy Information.

5. Engage a qualified lawyer.

If you have doubts about your own abilities or do not want to engage in the selection of real estate and checking the apartment for “legal purity,” you can involve an experienced realtor or lawyer in the case, concluding an agreement with him for the provision of legal consulting services.

So, when concluding a purchase and sale transaction, where one of the parties is a legal entity, you should pay attention to the authenticity of all documents provided - power of attorney, decision of the general meeting, Charter. You should also check the company through the Unified State Register of Legal Entities, and the apartment itself through the Unified State Register of Legal Entities.

Read also: Buying an apartment in a housing cooperative: pitfalls in 2023

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Risks when purchasing an apartment from a legal entity

Purchasing real estate from a legal entity is accompanied by risks for the buyer who is not familiar with the nuances and features of the procedure for selling and concluding a transaction, so we will analyze them in detail in the article and ways to protect against the danger of losing property or money.

The acquisition of square meters from a legal entity is not so common, but it is characterized by a large set of necessary documents, therefore it is worth approaching the execution of procedures with increased care. There are many nuances for which a transaction can be declared invalid.

When making such an acquisition, it is possible to obtain primary housing or square meters on the secondary market, including obtaining a mortgage loan.

Read: apartment with a mortgage risks

Buying an apartment from a legal entity: risks

1. Forgery of papers. This is a common case of fraud when the merchant is shown a forged document authorizing the sale. In the future, the legal owner will demand the return of his property through the court.
2. Incorrect power of attorney.

   If the person representing the seller has a power of attorney in violation of the formalization rules, the transaction will also be declared invalid. It is worth studying it as closely as possible.

3. Company bankruptcy.

   In some cases, a legal entity is formed specifically for the sale of property, after which it is immediately liquidated, and bankruptcy proceedings begin in its respect.

4. Non-privatized housing cannot be sold by the corporation, therefore, if such real estate is sold, all actions will be considered invalid.
5. Loss of tax deduction.

   Often, companies include in the purchase and sale agreement the cost of housing according to the BTI assessment, with the buyer paying the difference from the market price in cash. Accordingly, the tax deduction will be issued only for the amount from the contract.

This is interesting: buying an apartment from a bank risks

Reducing risks when purchasing an apartment from an organization

• To reduce the risk of encountering problems when purchasing an apartment from an organization, you should pay attention to a number of points, some of which are typical for purchasing housing in general.
• Getting to know the history of the home, its owners, title documentation and the presence of encumbrances on the property is a standard procedure for any purchase.
• It is necessary to get acquainted with the constituent documentation of the company itself, the presence of a certificate of registration and other mandatory papers confirming the legality of the company.

You will also need to make sure that the person signing the documents has the legal right to do so, in particular, a correctly executed power of attorney.

It is worth checking the company itself to see if there are lawsuits against it.

The value of the property. If the value of the asset being sold is at least 25% of the total value of the legal entity’s property, the transaction is considered major, and a different procedure is required for its implementation, including the permission of shareholders.

1. For more reliable protection against fraudulent activities, it is advisable to contact several lawyers at the same time to check the documents provided by the seller.
2. Purchase and sale must be carried out only through a notary, and the transfer of funds must be carried out only in non-cash form, credited to the organization’s current account, and not personally to the manager.
3. In general, with a competent approach, you can significantly reduce the potential risks when purchasing an apartment from a company, making it a completely acceptable option.