quick checks on the internet before the real-estate contract has been concluded

Quick checks on the Internet before the real-estate

contract has been concluded

practical hints

“Yur Bureau” LLC tel.: +7 495 6259524; www.yurbureau.ru; [email protected]

http://www.yurbureau.ru/

«YurBureau» Company

“Yur bureau“ LLC tel.: +7 495 6259524;

www.yurbureau.ru; [email protected]

• More than 7 years of successful law practice;

• Close-knit team, consisting of the alumni of the leading Russian universities;

• Real-estate consulting and litigation is one of our main focus-areas;

ООО "Юридическое бюро" тел.: +7 495 6259524; www.yurbureau.ru; [email protected]

• Please note that the majority of the print-screens were made with the use of google-translator, since almost none of the web-sites have full English versions yet.

• Whenever you need any assistance with language matters you can rely on us.

Issues arising when dealing with real estates contracts

3 main categories:Ties between the real estate object

and the party to the contract (title) The state of the real estate object Legal capacity of the party



Legal ties between the subject matter and the party

Before the agreement is concluded it is essential to make sure the vendor has a right to dispose of this real property.

One can check it the following way:1) Get 3 types of extracts from Uniform State Register of Rights to Real

Estate and Transactions: the Standard extract on the rights to real estate, the Statement on persons who received data on a real estate object, the Extract on real estate transactions;

2) Get the extract from Uniform State Register of Rights to Real Estate and Transactions in electronic form at www.rosreestr.ru

3) Get the basic information about the real estate object at www.rosreestr.ru (Public services- List of Services – additional features– Background information on real estate on-line).It is possible to search for an object on-line by its cadastral number, reference number or address. You can get the information about the recorded title and its limitations (attachments) ON-LINE AND FOR FREE.


http://www.rosreestr.ru/




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“Yur Bureau” LLC

tel.: +7 495 6259524; www.yurbureau.ru; [email protected]


Evident difficulties with the real estate objects

Types of objects:• Apartments• Land with or without constructions • Rights (co-investment in housing construction)

Main obstacles:1. Attachment of the estate2. Persons registered or entitled to live in the apartments3. Alterations4. Technical state of the real estate object5. Communal area transactions6. Nullity of one of the previous transactions (simultaneous

chains of titles to one and the same object)



AttachmentsFirst of all one can find the information about the attachments in the Extract from

Uniform State Register of Rights to Real Estate and Transactions or on-line at www.rosreestr.ru.

However there might be a situation when the court has ruled to attach the estate but the registering authority has not yet done it. An agreement concluded in between the decision of the court and the attachment itself can lead to undesirable consequences for the purchaser (the court can consider him a mala fide purchaser since the information on the judicial cases is public).

How can one check whether the court decided to attach the estate? • Decide on the court jurisdiction (exclusive jurisdiction – district courts; territorial jurisdiction

– at the location of the estate). List of the district courts of Moscow is at www.mos-sud.ru• Check at the official page of the court (for example http://dorogomilovsky.msk.sudrf.ru/) the

availability of the legal proceedings, connected with the particular estate and its owner. • It is possible to search at section «Court records» - «Case search», for example by name of

the owner.• Check the other common jurisdiction databases:• http://судебныерешения.рф/• http://rospravosudie.com/ • http://actoscope.com/ • http://www.gcourts.ru/ • http://docs.pravo.ru/ One can also check on-line whether the enforcement proceedings have been initiated in relation

to the vendor. The web page of the Court Bailiffs Service provides public with such an opportunity http://www.fssprus.ru/.

If the sum to be executed is significant it is quite possible that the estate has been attached.



http://dorogomilovsky.msk.sudrf.ru/










http://xn--90afdbaav0bd1afy6eub5d.xn--p1ai/




http://rospravosudie.com/

http://actoscope.com/






http://www.gcourts.ru/








http://docs.pravo.ru/








http://www.fssprus.ru/


ООО "Юридическое бюро" тел.: +7 495 6259524; www.yurbureau.ru;

[email protected]

ООО "Юридическое бюро" тел.: +7 495 6259524; www.yurbureau.ru;

[email protected]

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Registered people or people entitled to live in the apartments

Precautionary measures before the transaction: It is necessary to get the extract from the house register. One can take it at local

residents' registration office. All the people who live or have lived in the apartments are named there. Currently it`s not possible to get this information on-line but in the nearest future it will be possible at www.gosuslugi.ru. It will also be possible to find out the address of an individual there if he agrees that such information will be available about him.

It is important to make sure the guardianship authorities have approved the disposal of the real estate so as to preclude the possibility of a situation when any minors claim rights to the estate you are going to buy.

• A person that used to live in the apartment but whose registration was temporarily terminated for a period of time (due to army service, work in foreign countries or custody) retains the right to live in the apartments or to privatize it and can therefore vindicate his rights. In this case it is important to get his or her written waiver of the rights to the real estate in advance.

• If the apartment was acquired under the annuity agreement with life tenancy of the ex-owner, then it is important to get his death certificate, since the new owner can sell the apartment even when he is alive, but the ex-owner will retain the right to live there.


http://www.gosuslugi.ru/


People registered at the address

Several enterprises can be registered at one address. In case you buy such object – some inconvenient matters such as receiving of their mail or telephone calls can emerge.

In order to avoid this situation it is helpful to check the address at nalog.ru.




Technical state of the real estate object, cadaster and alterations of the

apartments.Technical state of the real estate object is important when it

comes to the secondary real estate market. Documents in this connection can be requested at administering

company or at housing cooperative. The information about such entities can be found at www.dom.mos.ru . It is also possible to check there information about the utility services and the maintenance of the house or the certificate of the house etc.

The real estate object can be also checked on public cadastral map at www.maps.rosreestr.ru and www.wikimapia.org (the underground lines are marked there in relation to buildings).

If the apartment was illegally alienated then Moscow Housing Inspection on the basis of the requests of the tenants may claim for restoration in court.


http://www.dom.mos.ru/

http://www.maps.rosreestr.ru/

http://www.wikimapia.org/


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Credibility of the data contained at Public cadastral map

Public cadastral map does not ensure the credibility, accuracy, completeness and timeliness of the information contained there, nor does it guarantee the correspondence between the requests and desires of the User and the Information (par. 5.3. of the Agreement on the usage of the Public cadastral map http://maps.rosreestr.ru/PortalOnline/terms.html)

However it is worth notifying that among one of the grounds for which Federal Service for

State Registration, Cadastre and Cartography may suspend state registration of the title to a building is overriding the land lot, according to the data from Public Cadastral Map. This situation does not correspond to the main purpose of Public Cadastral Map, since it was created as an information service.

For instance, should one choose “Map of Russia (Rosreestr) in section «Map management»

on the web-site, the abovementioned building does overrides the land lot № 77:05:0001004:66 and is partially situated at the land №77:05:0001004:70. However should you choose “Satillite data (Esri)” in section “Map management” the abovementioned building fully marches the land lot № 77:05:0001004:66.



http://maps.rosreestr.ru/PortalOnline/terms.html


Unreliability of the data contained at Public Cadastral Map

There are land lots which parts are situated within the territory of reservoirs according to the Public Cadastral Map. This neither complies with Land Code nor with Water Code.




Nullity of a transaction in the chain

In case a transaction in the long chain of resales is acknowledged invalid because the property was disposed of without the intention of the vendor, the real property might be vindicated from a bona fide purchaser.

Therefore before the transaction has been concluded it is essential to get as much information on all the transactions already made in relation to the property, as possible (it is possible to get this information from the Extract on real estate transactions).

The following should be noted:• The transactions were concluded under the co-investment agreement. The co-

investment participant may assign his rights to a third party (p.1 art.11 Federal Law № 214-FZ). As for example in case № А40-134182/10 Ministry of Defense of RF vs. «494 Office of Chief Resident Engineer» OJSC on recognition the agreement as void.

It is possible to find out whether the co-investment agreement has been recognized void at commercial courts web-site kad.arbitr.ru. «Electronic Guard»,service is available at guard.arbitr.ru It enables to follow the cases you are interested in.

• In case the apartments were received under the deed of gift, especially if this deed was signed between next to kin, the reasons for this gift should be examined with attention. If it was purchase formalized by the gift agreement, then this transaction will be deemed fraudulent and void.

• Agreement of purchase of communal facilities in apartment block may be recognized void, notwithstanding the fact that the registration has been formally completed.


http://www.kad.arbitr.ru/

http://www.guard.arbitr.ru/


Nullity of a transaction in the chain

The chosen remedies are of the utmost importance• In case there are no contractual relations or relations emerging due to application of

consequences of invalidity of a transaction between the persons, the case on recovery of the property shall be dealt with in the procedure of replevin. In case the parties do have contractual obligations the restitution shall be applied.

According to the Joint Decree of the Plenum of the Supreme Court of Russia and Higher Commercial Court of Russia № 10/22 it is at court`s discretion to determine the essence of the dispute. In case there are claims for vindication in the restitutionary claim, the Court shall apply articles 301, 302 of the Civil Code of Russia.

• The person who claims his rights were violated may recover the damages from the Defendant.

It requires special remedies of the bona fide purchaser.



Party issues

1. Decedent's estate.2. Authority to conclude transactions.3. Inability to understand the nature of the

act and to appreciate its possible consequences

4. Spouse`s or ex-spouse`s claims.5. Legal entity is a party to the transaction

(including a foreign off-shore company).



Decedent's estate

• It is necessary to check whether the vendor has any devisees. It is quite difficult to find out this information since it is not public. If one still manages to do this – it is important to find out the reasons for their non coming into inheritance.

• Privatization. It is essential that the owner`s children (underage at the moment of privatization) state in the written form in advance that they are aware about the violation of their rights and of expiration of the limitation period provided for challenging the transaction on privatization.

• It is quite possible that after the inheritance had been released the devisee who was unable to find out that the inheritance had been released emerges. Moreover, there are certain groups of individuals who are entitled to their portion in any case, even if the apartments were devised to someone else.



Authority to conclude transactions

Authority.

If the owner makes a transaction via agent it is essential to check whether the agent`s authorities have been properly drafted. The Power of Attorney shall be signed in the presence of a notary public. It is important to check the validity term of the Power of Attorney and the authorities specified therein. The principal might claim later that he did not grant the power of Attorney or that he was unable to realize the consequences of his acts.




Intention to make a transaction

Inability to understand the nature of the act and to appreciate its possible consequences. A transaction may be challenged if it is proved that the person was unable to realize the

consequences of one`s own acts while concluding it. If a man of advanced years is the owner of the apartment or a person is a subject to

regular medical check-up at psychoneurologic dispensary or an alcohol addicted person the vendor might be recognized as incapable or impaired or unable to understand the nature of the act and to appreciate its possible consequences, and the transaction might be therefore recognized void. In this case it is necessary to get a statement from psychoneurologic dispensary and narcological dispensary in relation to competence of the owner of the property. It is not possible to receive such a statement by Power of Attorney, only the person himself may get it.

It is possible to carry out medical certification at the moment of signing the agreement. Retrospective examination might also be done (that is after the death). It is accomplished on the basis of the documents in relation to the clinical history. Since it is only in court where it is possible to restrict the capability of the person or to recognize him incapable, one may check whether such statements were filed in court in relation to the owner.

Limitation period for challenging a transaction on these grounds starts from the date of death, not from the date when the person found out or should have found out about the transaction. However sometimes Courts decide that the 3 years start from the moment the inheritance was released.

Spouse`s or ex-spouse`s claims

Possible spouse`s or ex-spouse`s claims should be taken into consideration if the apartments we acquired in the course of marriage.

Even if the owner is not married at the moment of signing

the agreement, it is necessary to check whether he was married at least for the last 3 years preceding the moment of transaction. It can be revealed by means of checking the stamp at his passport, but what even more reliable is the owner`s statement signed in the presence of notary public that he has not ever been married or is not married for the moment. In case he is married It is necessary to get the other spouse`s waiver of rights to the property.



Legal entity is a party to the transaction (including a foreign off-shore company).

1. Find the Russian legal entity at www.egrul.nalog.ru. Paid or free of charge

Check whether there are any risks for your business: • Information on the legal entities and sole proprietors in whose relation the documents for state

registration (including the registration of the amendments to the Charter) were submitted.• Notifications of the legal entities published at “State Registration Reporter” about the decisions on

liquidation, reorganization, decreasing of the charter capital, on acquiring by a limited liability company of 20% of the charter capital of another company and other notifications that shall be published therein in accordance with the Russian legislation.

• Information published in “State Registration Reporter” about the decisions taken by the registering authorities on the oncoming exclusion of a legal entity from Unified State Register of Legal Entities

• Legal entities which executive bodies include disqualified persons• Addresses, stated as registered seats by different legal entities for state registration • Information on persons who relinquished to manage the company in court or in whose relation this

fact was proved in court. • Information on the legal entities, whose contacts at the stated in Unified State Register of Legal

Entities address are missing. Moreover, one may check the existence of any information about himself or his counterpart in Database of Enforcement Proceedings of State Bailiffs Service www.fssprus.ru

2. Get the Extract from Unified State Register of Legal Entities, check who is the director and the participant For example with the use of http://www.k-agent.ru, you can also check whether the director is a mass director, or the founder is the mass founder. “Yur Bureau” LLC


http://www.egrul.nalog.ru/

http://www.fssprus.ru/

http://www.k-agent.ru/



Contacts:• www.yurbureau.ru• Facebook:

www.facebook.com/yurbureau• Tel: +7 495 625 95 24• Fax: +7 495 625 95 24• [email protected]

Thank you!

