[BUYING AND SELLING REAL ESTATE IN RUSSIA]
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conclusion of the SPA by the other party within 6 months from the date of non-fulfillment of the obligation to conclude the preliminary agreement. The party failing to conclude the SPA shall reimburse damages resulting from such failure to the other party. 2. SPA Under an SPA of real estate, a seller is obliged to transfer a real estate item (land plot, building, construction, apartment, or other real estate) to the ownership of a purchaser, and the purchaser is obliged to accept the real estate item and pay a certain sum of money (price) to the seller.
If payment of price under the SPA occurs after the transfer of real estate to the purchaser (sale on credit), additional provisions such as method, terms, and amount of payment should be provided for in the SPA. In case a real estate item is sold “on credit,” it shall be considered mortgaged in favor of the seller until the full price is paid by the purchaser, unless otherwise provided by the SPA. − Provisions in respect of real estate transfer The seller is obliged to transfer the real estate item to the purchaser, and the purchaser is obliged to accept the real estate item from the seller. The transfer of real estate by the seller and its acceptance by the purchaser should be evidenced by a transfer and acceptance act sighed by the parties. The parties to SPA may also stipulate a certain provision in the SPA that the SPA itself constitutes the transfer and acceptance act. The risk of loss of the real estate item passes to the purchaser at the moment when the transfer and acceptance act is signed; until then, the real estate item is at the seller’s risk. Form of the SPA: The SPA should be executed in writing by means of drawing up one document signed by the parties, otherwise the SPA is deemed invalid. Obligatory notarization of the SPA of real estate is not provided for in the law. The parties can notarize the SPA at their own will. The SPA is subject to state registration and the title is considered transferred from the moment of such registration. Rights to land plot when the building/constructions is being sold: Under the SPA of building, construction, or other real estate item, the purchaser along with the title to such real estate item simultaneously acquires rights to a land plot where such
Material terms of the SPA: − Subject matter of the SPA
The SPA should provide for the data uniquely identifying the real estate item that is subject to transfer to the purchaser under the SPA, including cadastral number, data on the location of real estate on a land plot or as a part of another real estate item. If no such data are specified, the SPA should be deemed not to have been concluded. − Price The SPA should provide for the price of the real estate item; otherwise, the SPA should be deemed not to have been concluded. − Specific provision for sale of residential premises An SPA of residential premises should provide for list of persons retaining rights to use such premises after transferring them to the purchaser under the SPA with specification of such rights. Other important provisions: − Payment conditions
ILN Real Estate Group – Buying and Selling Real Estate Series
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