[BUYING AND SELLING REAL ESTATE IN UKRAINE] 259
or other alternative means of identification of a person, or in paper form. In some cases, in order to verify title to real estate, it is also necessary to examine other documents related to such real estate such as a sale-purchase agreement of such real estate by which it was initially acquired by the seller, 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:
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 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.
• 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.).
ILN Real Estate Group – Buying and Selling Real Estate Series
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