[BUYING AND SELLING REAL ESTATE IN RUSSIA]
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agrees otherwise. Should the seller violate said obligation, the purchaser has a right to: − unilaterally terminate the SPA; − claim for decrease of the purchase price. Should the property be seized from the purchaser on grounds that existed before entering the SPA, the seller shall compensate damages to the purchaser unless they can prove that the purchaser knew or should have known about these grounds. The purchaser’s liability Should the purchaser fail to accept the real estate item, the seller has a right to: − request the acceptance of the real estate item by the purchaser; − unilaterally terminate the SPA. Should the purchaser fail to pay the purchase price the seller has a right to: − request the payment of the purchase price; − unilaterally terminate the SPA. Contractual liability The seller and the purchaser can agree upon contractual liability for violation of particular provisions of the SPA. 6. Share deal Another method for acquiring real estate is a share sale – acquiring a share in a company holding title to real estate. A share deal can be performed by acquiring shares in a Russian joint stock company or by acquiring participatory interest in a Russian limited liability company. In a share deal, the purchaser acquires the target company with all its rights, obligations, and liabilities. Real estate acquisition through a share deal may be preferable for the purchaser due to tax and other advantages of such a transaction.
− the condition of the real estate item does not have any quality defects and does not need any repair works; − there are no pending court proceedings in respect of the real estate item; − all governmental approvals and permits for construction of the real estate item have been obtained; − the seller has obtained all corporate approvals for acquisition and disposal of the real estate item; − there are no third parties’ claims in respect of the real estate item. 5. Parties’ liability under the SPA The seller’s liability Should the seller fail to transfer a real estate item to the purchaser, the latter has a right to: − unilaterally terminate the SPA; − request the transfer of the real estate item through a court order; − claim for reimbursement of damages. Should the seller transfer the real estate item of inadequate quality to the purchaser, the latter has a right at its own choice to: − claim for pro rata decrease of the purchase price; − demand the seller removes the defects at its own expense within a reasonable term; − claim for compensation of the purchaser’s expenses resulted from removal of defects. In case of substantial non-compliance with the quality requirements, the purchaser has a right to unilaterally terminate the SPA and claim for repayment of the purchase price from the seller. The seller shall transfer the real estate item free of third pa rties’ rights unless the purchaser
ILN Real Estate Group – Buying and Selling Real Estate Series
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