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[BUYING AND SELLING REAL ESTATE IN UKRAINE]
certificate on ownership title to such real estate, etc. V. Sale and purchase of real estate Due diligence Before execution of a real estate sale-purchase transaction, it is usually recommended to undergo a real estate due diligence procedure to verify possible risks or consequences related to the acquisition of certain real estate which may have a material adverse effect on the transaction. Due diligence usually includes verification of the following aspects:
conclude a main sale and purchase agreement in the future based on the terms and conditions established by the preliminary agreement. The preliminary agreement shall contain conditions which allow the determination of subject matter as well as other essential terms and conditions of the main sale and purchase agreement and be concluded in the form established for the main sale and purchase agreement. The obligations established by the preliminary agreement shall be terminated if the main sale and purchase agreement is not concluded within the period established by the preliminary agreement, or if neither party sends a proposal to the other party to conclude it. The party who unreasonably evades the conclusion of the main sale and purchase agreement provided for by the preliminary agreement, shall reimburse the other party for damages caused by delay, unless otherwise established by the preliminary agreement or legislation. Contrary to the preliminary agreement, the agreement of the parties on intentions (protocol of intentions, etc.) is not considered as a preliminary agreement and does not entail legal consequences. Sale and purchase agreement (SPA) Under the SPA for real estate, one party (a seller) shall transfer a real estate property (plot of land, building, etc.) to the ownership of the other party (a purchaser), and the purchaser shall accept the real estate property and pay for it a certain amount of money.
• validity of a title to real estate property;
• existence and details of other proprietary rights to real estate property (lease, easement, etc.); • existence and details of encumbrances (mortgage, tax lien, etc.);
history of title transfer;
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• unrestricted right to transfer of the real estate property; • disputes, litigations in respect of real estate property;
permitting situation;
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• other details related to real estate (designation purpose of the plot of land, etc.). Preliminary agreement Before entering into the main sale and purchase agreement for real estate, the parties may be interested in concluding a preliminary agreement. By concluding such preliminary agreement, the parties undertake, within a certain period (but not later than within 1 year from the moment of conclusion of the preliminary agreement), to
The form of the SPA As a general rule, an SPA for real estate shall be concluded in written form and is subject to notary certification.
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ILN Real Estate Group – Buying and Selling Real Estate Series
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