When purchasing housing at the construction stage, you need to make sure of the reliability of the builder a thousand times. How to check the company and understand whether you can trust it? After all, the value of real estate today is so high that most citizens have to take multi-million dollar mortgages and pay them for more than one year, so it is important to exclude even minimal risk. You will learn from the article how to check the developer, what information and documents you need to pay close attention to.
Why you can’t rely on luck
There are several ways to check the reliability of the developer when buying an apartment at the stage of excavation or construction. Trust your money should only be a construction company with an impeccable reputation. Good faith and experience in construction are important, but not the only indicators of a firm’s reliability. In addition to them, financial stability is important, that is, the availability of various sources of financing and administrative capabilities. The buyer’s risks, the likelihood of a “freeze” of the construction, or a delay in the commissioning of the finished object, directly depend on these criteria.
The activities of the developer as a legal entity or individual entrepreneur are influenced by various economic factors, changes in legislation, trends in the market for real estate, exchange rates and other conditions that are independent of the construction company itself, its reputation and integrity. Difficulties and unforeseen circumstances may arise in the work of a company with many years of experience and a solid image. However, such a company, in contrast to the less well-known and untested developer, will be able to find a way out of difficult situations without causing damage to the end user. That is why it is extremely important to know how to check the developer. This will help to understand whether you can trust him with your hard-earned money.
Information on the site
The first and easiest way to get acquainted with a construction company is to go to its official website. Typically, the basic information about the developer is contained in the "About Us" or "About the Company" section. It contains information about the period of existence in the market, the history of development, achievements, awards. There, some companies publish information about the managerial level and composition of the board of directors.
Information and analytical articles on independent specialized resources (“Real Estate Market Indicators”, “RBC Real Estate”, etc.) will be useful. You can get information about the developer through any search engine. But to implicitly trust what is written on the site in the “Media about us” or “Reviews” section is definitely not worth it.
You can not miss the page "Projects". In this section, the company places already completed projects, if any. By the way, their absence may indicate that the developer is a beginner in his field. It would be wrong to objectively judge the experience of the company by those objects that are at the implementation or planning stage, because the so-called “paper projects” only indicate the ambitions of the developer, no more.
In the presence of the leased real estate submitted for review on the official website, you should pay attention to the region in which they were built. This fact will help verify the developer. As a rule, the presence of several successfully completed projects indicates that the developer has good relations with the authorities of the municipality, which means that any problems associated with obtaining permission, coordinating technical conditions, and energy supply are unlikely.
Collaboration with partners
Assessing the reliability of the developer, you should pay attention to its key partners. If they include large banks with state participation, and the leading construction companies act as general contractors, there is no doubt in the correctness of their choice.
There is another method, how to check the developer. It consists in studying the investment policy of the company. In addition, if the main investor of the company is a giant financial corporation, then you certainly can not worry. Before investing huge amounts of money in a business, large investors thoroughly study development projects, conduct numerous checks on the activities of the developer and only if they have no questions, sign a contract. In turn, the developer, pointing to a partnership with a leading corporation, demonstrates the integrity of his reputation to the entire market.
Information on sources of financing is contained in the project declaration. This document can also be found on the website of the developer. In addition to it, the name of the bank or other organization that finances the construction is indicated. This moment is of particular importance, since cooperation with a small or unknown company may actually be affiliated. Other sources are the funds of end customers transferred under agreements DDU.
To check the reliability of the developer in shared construction, as a rule, pay attention to the presence of currency risks. They appear if the developer makes all calculations in dollars or euros. The slightest fluctuations in the exchange rate will lead to serious losses for investors. If all operations associated with the project are carried out in rubles, this eliminates the risks of investors.
Financial opportunities of the developer
Signs of investment stability include an independent sales strategy. It implies the implementation of the project by the developer by investing its own or credit funds, without equity participation of buyers. Typically, such objects are sold at the finish of the construction process, when they are almost ready for commissioning. If the developer has started selling apartments, but even the foundation pit has not yet been prepared, it is necessary to study the project declaration, which indicates the sources of financing. If they are predominantly those who have entered into an equity agreement, it is better to carefully weigh your decision to purchase again.
Adequacy of pricing policy is another argument in favor of the developer. How to check when buying an inexpensive apartment, what is the catch? The sheer cheapness of the offer does not always indicate its benefits. Most often, apartments that are sold at a price much lower than market prices indicate a lack of company resources. However, a moderate decline in prices during seasonal promotions is quite normal in the real estate market.
The financial well-being of a company is often expressed by its publicity. The placement of own shares in the public domain on the domestic or foreign stock market confirms the fact that the developer has passed numerous verification procedures and received high expert ratings. This fact indicates that exchange investors trust the company, support its model of corporate governance and financial policy.
Real estate portals on which ratings of Russian construction companies are published is a place where you can check the developer by its quantitative indicators. The top, as a rule, are firms with a significant amount of commissioned housing and the proceeds of profit for the calendar year.
Project implementation rates
How to check the reliability of the developer when buying an apartment, if the house is under construction or excavation? In this case, you can rely on the pace of each stage of construction work. Already implemented projects of the developer are taken as a basis. Often, developers specifically publish photo and video reports, thereby trying to justify the trust of investors. Thanks to webcams installed on the premises, future residents have the opportunity to observe the workflow online, to evaluate the dynamics and coordination of the process.
But how to check the reliability of the developer during shared construction and how to understand that the construction of a multi-story building is too slow? With a normal working process, an apartment building under construction should increase by 2-3 floors per month. Panel buildings, unlike brick and monolithic ones, are built faster: on average, a month a concrete box grows on 4-5 floors. However, these calculations are theoretical in nature, and often even leading construction companies deviate from the norm.
Before buying housing under construction from the developer, it is advisable to spend several hours of your personal time and visit a couple of finished objects. Inspection of the courtyards, building facades, the entrance to the residential complex will allow to draw a preliminary conclusion about the quality of the houses. You also need to take into account the year of construction and the reviews of residents. Even those buildings that are visually free from defects can subsequently present new-made owners with not the most pleasant surprises in the form of freezing walls, high audibility, low-quality interior decoration, etc.
What documents to ask
Federal Law No. 214, which governs participation in shared construction, sets out the obligation of the developer to provide several documents for review to any interested person. These include:
- the latest edition of the charter of the construction company and other constituent documents;
- certificate of state registration of the developer as an individual entrepreneur or legal entity;
- certificate of registration as a taxpayer;
- financial statements for three calendar years;
- Auditors report on the activities of the company.
These are general documents that you need to check with the builder for a new building in the first place. The company is obliged upon request to provide their originals or notarized copies. But on the other hand, familiarization with these documents can not be called a wholly-owned option, which will verify the reliability of the developer when buying a new building. As a rule, this information is formal in nature and is available to each developer, therefore, the ordinary buyer will not give any special information. The only value for potential investors is the audit report, according to which specialists will be able to draw conclusions about the financial condition of the company.
Much more important is to familiarize yourself with the design documentation. In addition to the main package of securities, the presence of:
- land tenure agreements;
- conclusions of state experts;
- building permits from regional authorities;
- extracts from the register.
Asking the question of how to check the developer when buying a new building, one should not forget about the documents that need to be requested directly at the time of conclusion of the contract. Before you put your signature on an equity agreement, you need to make sure that the company is acting within the law. So, what kind of developer documents do you need to check? Be sure to make sure that the person who represents the interests of the company has the authority to complete the transaction. If the contract is signed by an employee of the company, he must have a corresponding power of attorney from the general director. In those cases when a party to the contract is a person who does not have these powers, the agreement is invalidated, and all obligations under it are canceled, despite the fact of the transfer of money. You need to pay attention to the name of the person who issued the document, the period of validity of the power of attorney and the right to carry out what operations it gives.
What else may indicate the reliability of the company
Most users collect information about the developer of interest in various forums that are devoted to discussing projects, the cost of new buildings, the advantages and disadvantages of apartments, etc. Here you can’t check the developer’s documents, but you can find out about the complaints of real estate investors, understand what inconsistencies and underwater stones in the process of registration of real estate. If there are more complaints than positive reviews, you should again weigh the purchase decision. In the event that dozens of equity holders accuse the developer of frankly fraudulent actions, constant violations of the deadlines for delivery of objects or, for example, refusal to provide documents on the legality of construction on a particular land plot, it is better to find another company.
Many are interested in which documents to check with the developer so that you can find out about his current lawsuits. But even if the information confirming the existence of certain disputes between the construction company and co-investors, contractors or equity holders were publicly available, it would not mean anything. Litigation is a common practice in the real estate market, especially for large firms that commission hundreds of thousands of square meters of housing annually. Dispute resolution is handled by a staff of lawyers, therefore, these issues have nothing to do with the course of the construction process and the technical aspects that accompany it.
How to check the developer for bankruptcy
In 2014, a federal law was passed, which obliged all construction companies to insure their liability to interest holders through bank guarantee, insurance policy or the conclusion of an agreement with the Mutual Insurance Company. And in 2017, new amendments to the aforementioned Federal Law were again introduced, according to which developers should now transfer funds to a single compensation fund for shared construction. The purpose of this state organization is to direct the budget to finance long-term construction and to pay off debt to equity holders in the event of bankruptcy of the developer.
How to check if a company has become officially insolvent before concluding an equity agreement? Special registers will help in this matter. To use one of them, you must go to the official website of the arbitration court. In the “Single file cabinet” section, through the search filter, set the parameters in the “Member of the case” column, designating “Respondent”, then enter the name of the developer and select the active Bankrupt button. All archived and pending cases of insolvency of legal entities and individuals will be displayed on the screen.
Housing commissioning: basic formalities
Finally, the deal was completed and all the deadlines for the delivery of the property to tenants who were looking forward to the day to celebrate the housewarming party approached. But, as it turned out in practice, many do not know how to check an apartment from a developer.
Deadlines for construction work are prescribed in the DDU. If the developer does not have time to deliver the property on time, then he must inform the buyers two months before the expiration of this period and offer to amend the relevant provision of the contract. Moreover, it is also important to separate the concepts of the commissioning period and the transfer of keys to owners. As a rule, new settlers will be able to enter new apartments no earlier than the day after the state commission accepts the property. Moreover, the moment of transfer of keys to residents should also be prescribed in the contract. Usually it occurs after 4-6 months from the moment of obtaining permission for commissioning.
Developers are obligated to all shareholders to send a notification of the readiness of the object by registered mail no later than one month before the date of transfer of the keys. However, more often buyers are told the good news over the phone and invited to come to the office to verify documents. You need to come there with your passport and a copy of the transaction agreement. If the purchased housing is issued to several owners, each of them needs to be present, and in the absence of such an opportunity, a power of attorney should be issued to its representative.
Often, developers offer to sign an acceptance certificate right at the office, and only after that go on site inspection, citing time savings, but by taking this step, the buyer exposes himself at great risk of being left with all the defects in construction and finishing works one on one. The developer is obliged to carry out the delivery of the object according to certain rules, and the new owner has the right not to accept it in the presence of marriage, defects. -, , . , , , .
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Inspection of the apartment
Before you go to the reception-transfer of the apartment, the owner must once again open his copy of the share agreement and carefully study the chapter that describes the characteristics of the object ready to move in. All types of work that the developer undertakes to perform are indicated here. At the inspection, it is advisable not to let the DDU out of hand, in order to be able to immediately indicate to the representative of the developer on the identified inconsistencies.
So, what to check when accepting an apartment from the developer? We list all that you need to pay attention to:
- Entrance door. It must be properly mounted and open freely, fitting snugly against the opening. Pay attention to the functionality of the embedded lock.
- Walls. Not even a minimum deviation from the vertical is allowed, while local irregularities can be within 5 mm. You should also measure the area of ​​the apartment and make sure that the placement of the walls corresponds to its schematic layout.
- The floors. There should not be air voids or bundles. You can detect them by tapping a few fragments with a hammer.
- The ceilings. Differences and gaps at the joints, the discrepancy between the actual height of the ceilings declared is a reason for refusing to accept an apartment. However, if the buyer plans to install suspended ceilings, you can close your eyes to minor defects.
- Window. The constructions of the brand indicated in the DDU by the developer must be installed. You need to check on your own the integrity of the double-glazed windows, the functionality of the fittings, the degree of sealing of the gaps, the presence of a visor on the loggia (if any).
- Electrical wiring. Using special testers, you can check the operation of all switches and sockets. If their presence is not provided for by the contract, make sure that there are all wires for further connection.
- Engineering Communication. The heating, drainage and ventilation systems, all shutoff valves, tees, drain pipes, sink, toilet bowl, heating radiators, etc. are subject to verification. To test the hood, it is enough to bring a piece of paper to the ventilation hole, which should stick under normal traction.
- Finish. Pay attention to the quality of the materials used, their brand. There should not be any cracks, chips, or open seams.
Finally, you should also record the readings of the meters that are installed in the apartment and beyond. It is desirable to save and verify the data of accounting devices with those indicated in their passports. In addition, you can contact the developer with a request to show the basement or upper technical floor. Interest holders have the right to access any part of the building to make sure that no pipes or roof are leaking, or if there are any odors.
Final stage
If the owner has no complaints about the finished apartment, an acceptance certificate is signed. Otherwise, if defects are discovered, a defective act is drawn up. It indicates the entire list of customer complaints, as well as the address, apartment number, details and information about the developer.
The developer invites the shareholder to re-view after fixing the shortcomings. If the buyer has no serious complaints, but for some reason he refuses to accept the apartment, the developer has the right to unilaterally hand over the object.