Many people prefer to buy apartments at the construction stage of an apartment building. This allows you to buy objects at a reduced cost. Such a process is called equity participation in construction. In order for the shareholder to be reliably protected from loss of funds, one should correctly approach the choice of the developer, as well as study the carefully drawn up contract. This document provides protection of the rights of buyers of unfinished objects.
The essence of equity
The process assumes that multi-apartment buildings are being built at the expense of future buyers of apartments. They invest their money in building a house, and after putting it into operation, they can draw up ownership of the apartment.
The process is regulated by special law Federal Law No. 214 “On shared construction”, and various changes are regularly introduced into it, guaranteeing protection of the rights of equity holders. The main features of equity participation in construction include:
- the rights and obligations of each party appear exclusively after signing the contract;
- in the DDU, all the nuances of cooperation are indicated, and it possesses the signs of various agreements, which include an investment and contract agreement, as well as the provision of services and sale;
- an apartment is bought under such an agreement, which is located in an unfinished house;
- under such conditions, numerous interest holders are attracted, which makes it possible for the builder to build an object with minimal own investment of money;
- not only an individual, but also a company can become a shareholder;
- participants can not influence the change of the project, technical specifications and other conditions for the construction of the house.
Often, citizens who buy apartments in houses under construction are faced with fraud or bankruptcy of developers. In this case, the rights are protected by the interest holder by the provisions of the DDU. In difficult situations, the transfer of the rights of equity participation in the construction to other companies or persons involved in the recovery of funds may be carried out.
Legislative regulation
When buying a home in an unfinished object, you should pay attention to the provisions of the main law of the Federal Law No. 214. It was adopted back in 2004, and it is he who regulates all relations arising between developers and interest holders. Many changes and amendments have been made to this legislative act. It is divided into numerous parts and paragraphs, each of which has its own purpose. Key changes and provisions include:
- the rules for drafting and terminating the contract of shared participation in construction are indicated;
- the possibility of transferring rights to third parties is prescribed;
- criminal liability is imposed for developers if they do not fulfill their obligations by agreement;
- developers must certainly open special accounts for the transfer of funds by equity holders, and money can be used exclusively for the construction of an object;
- developers must have their own official website, which discloses all information about their work, which includes projects, permits and other documents.
Now all developers open an escrow account designed to transfer money to equity holders. The Federal Law on participation in shared construction indicates that such an account is closed only after the full use of funds. Such conditions cannot become an obstacle to the transfer of rights.
Additionally, the legislation provides for the need to create a compensation fund. It is represented by insurance for equity holders, since if for some reason the developer does not fulfill his obligations, then losses are covered by equity holders at the expense of funds from this fund.
Advantages and disadvantages
Using a remote control for buying a home has many advantages for each home buyer, but it is important to consider certain disadvantages of such a decision. Participation in shared construction of real estate is considered risky, since there is always the possibility that the developer for various reasons will not cope with its responsibilities.
pros | Minuses |
Installed on objects low cost, which is much less than the price of finished apartments in the primary or secondary market | We'll have to wait long enough for the housing to be completed, so this opportunity is used by people who already have a place to live. |
Many developers offer installments for the entire duration of the construction of the house, which allows you to buy an apartment without having the originally needed amount of funds when drawing up a DDU | Often, equity holders have to deal with a delay in the completion of the facility, so there is a need to recover a penalty through the court |
Guaranteed housing by law, so equity holders can still rely on an apartment or a loss | If for various reasons the apartment will exceed the previously agreed size in terms of quadrature, then a certain amount of funds will have to be paid |
The law imposes stringent and numerous requirements on developers, so you can be sure of the reliability of the company | Often you have to deal with fraud, for example, the developer sells one apartment to several interest holders or other schemes of circumvention of the law are used, which leads to the need for legal proceedings |
If the company does not rent out the house by the appointed time, then interest holders can count on a good penalty, calculated for each day of delay | Often a company declares itself bankrupt, which leads to the transfer of the house to another developer, and all this negatively affects the construction period |
Due to the above pluses and minuses, each person must independently determine whether shared participation in the construction is appropriate and beneficial for him.
How to buy housing for DDU?
The process is not considered to be too complicated, but in order to be convinced of its profitability and effectiveness, potential buyers must perform certain sequential actions.
Before contacting the developer, it is important to get feedback on it, study the official documentation, and also check how quickly the construction of a particular house is carried out.
Getting company information
Initially, you need to make sure that the apartments for sale on DDU are really reliable, verified and officially registered organizations. The Federal Law on participation in shared construction indicates the need to obtain information about the developer:
- it must be represented by an officially registered company;
- it is desirable that the company already had completed and completed facilities;
- There should be no open litigation regarding the organization;
- all past homes must be commissioned in a predetermined time frame;
- all documents presented on the organization’s website are carefully studied, and these include projects, work permits, declarations and other papers;
- the company must have rights to the site where the construction process is ongoing.
If these documents and permissions are missing, then it is not recommended to draw up a DDU with the developer.
What information is contained in the declaration?
Particular attention is paid to studying the declaration of construction. It should be located in open sources 14 days before the conclusion of the first agreement with equity holders. This document should contain important information for each construction participant. It refers to:
- name and legal address of the developer company;
- permits for work are listed;
- previously obtained licenses are indicated;
- the license validity period is entered;
- All founders of the company are listed;
- the past constructed facilities for three years of the company’s operation are given;
- financial results of work are indicated;
- given payables and receivables;
- other transactions are indicated on the basis of which funds were raised for the construction.
An agreement on shared participation in construction with equity holders is concluded only after the developer buys out or leases the land where the construction of the house is planned.
What should the project documentation include?
It is considered an important document for each participant in the construction. The documentation should be generated and published 14 days before the moment when the first contract with the interest holder will be concluded. The main information from the project includes:
- information about the developer;
- information about all founders;
- data on the financial condition of the company;
- building permits and licenses;
- the period during which it is planned to erect the facility;
- location of the house being built;
- company property;
- construction costs and involved contractors.
It is allowed to change the information in the project documentation if the financial condition of the company for one quarter changes. Moreover, all these adjustments should be published in open sources.
The nuances of drawing up an agreement
As soon as all information about the builder is verified, it is possible to draw up a DDU with it if it is reliable and verified. Equity participation in construction necessarily involves the drawing up of this particular document, since other securities will not protect equity holders on the basis of the provisions of Federal Law No. 214.
By all means, this document contains information:
- the subject of the agreement by which the apartment is presented, and its quadrature, number of storeys, number of rooms, size and availability of a balcony or loggia, exact address, the presence of various communications, as well as many other technical parameters should be indicated;
- real estate price;
- settlement procedure;
- the period when the house should be commissioned;
- the duration of the warranty period, which should not be less than five years;
- the way in which the finished apartment will be transferred to equity holders;
- conditions on the need to complete the decoration of residential premises.
With the correct preparation of the document of equity participation in the construction, equity holders will be reliably protected from fraud on the part of the developer or from his bankruptcy. Some developers offer the opportunity to pay an installment plan.
Contract registration
After the conclusion of the agreement, it is required to be officially registered. Only under such conditions is shared construction legally carried out. The conditions of participation suggest that it is necessary to prepare a DDU, an object plan, a project declaration and personal documents of the buyer, after which this documentation is transferred to the Rosreestr.
The registration process takes about 10 days. For this, citizens will have to pay 350 rubles.
What rights do equity holders have?
Based on the DDU, home buyers have many different rights. These include:
- if the deadlines for putting the facility into operation are delayed, then a penalty may be required by citizens under an agreement on shared participation in construction;
- after the contract is registered with the interest holders, the territory itself and the object being built on it are pledged;
- it is allowed to draw up a contract for the transfer of the right of claim by agreement;
- a finished apartment is accepted only when drawing up a special transfer deed;
- if significant violations are revealed during the inspection of the housing, then an act may not be signed, after which the shareholder may require correction of the deficiencies.
If various problems are identified after the start of the use of housing, then, on the basis of the warranty period, the buyer may demand that they be fixed by the developer.
How is terminated?
The terms of termination of this contract are specified directly in its paragraphs. There may be different reasons for this. Most often, the termination of the contract for participation in shared construction is required if the developer does not cope with his obligations, for example, the house is not ready for use in time, there are significant violations or the quadrature of the property does not correspond to the previously established size.
The termination process is certainly registered officially.
Conclusion
Thus, the participation of citizens in shared construction is considered a popular way to acquire inexpensive and high-quality real estate. At the same time, it is important to correctly choose the developer, with whom the DDU is then compiled. This document must have the established form and contain all the necessary information about the participants.
Based on the DDU, a home buyer is endowed with many rights that he can uphold in a claim or court order.