Buying an apartment in a new building by assignment of rights

The transfer of real estate rights is carried out before the house is put into operation. The assignment is concluded with the participation of 3 parties – the primary investor (buyer), the developer and a new investor who expressed a desire to buy an apartment. The form of the contract depends on the investment scheme, but in any case it is in the form in which the contract was concluded with the primary investor. If the contract with the primary investor was concluded in simple written form, the contract of transfer of rights will also be concluded in simple written form, if the contract with the primary investor was concluded in notarial form, then, accordingly, the contract of transfer of rights shall also be subject to notarization. From practice, the analogue of the contract of transfer of rights is the contract on making changes to the contract with the primary investor, in which the clause with the data of the primary investor is set out in a new version with the data of the new investor. At the same time, the rest of the text remains unchanged, since the new investor is assigned the same rights and obligations that were assigned to the primary investor.

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It follows from practice that most often apartments in new buildings are sold under a contract of transfer due to the fact that the new building will be put into operation with a low probability, or there are other risks for obtaining ownership of an apartment in such an object. Then we recommend to carry out Check of Legal Cleanliness of Real Estate.

List of documents for concluding the purchase of an apartment under the assignment agreement:

• passport, tax code of the new investor, consent of the spouse to conclude the contract, divorce certificate
• documents of the builder’s company (Excerpt, Extract from the Unified State Register of Legal Entities, Individual Entrepreneurs and Publicly Formed Persons (EGR), Certificate of Registration, Statute, Order of Appointment the signatory-representative of the developer, if the developer is a physical person-entrepreneur – Extract or extract from the EGR). If the developer is a physical person – passport, tax code, consent of the spouse to conclude the contract, marriage certificate
• contract concluded with the primary investor (original)
• a document confirming the amount of funds deposited by the primary investor (original)
• obtaining the investor’s consent to conclude an agreement on the transfer of rights (depends on the policy of the developer’s company, i.e. if necessary)

Important! Before concluding the contract, we strongly recommend checking the documents with a real estate lawyer on the land plot, construction, documents of the developer, the presence of arrests, legal disputes, etc., since the conclusion of an agreement on the transfer of rights carries the same risks and negative consequences as the conclusion of an agreement with the developer and the primary investor.

The cost of concluding the purchase of an apartment under the assignment agreement

Developers in Kyiv and the Kyiv region usually charge a percentage of 1-5% for the certificate of the agreement on the assignment of rights, but some do not have interest rates. All this should be spelled out in the contract of the primary investor. Often, the interest rate is absent or significantly lower if the primary investor assigns his right to close relatives. If the transfer agreement is concluded without a notary certificate, nothing is required for the transfer agreement except for the above-mentioned percentages. In general, payment of the above percentages and remuneration for the services of real estate agencies is the responsibility of the primary investor, but in any case, payment is possible by the primary and final buyer in half or only by the final investor, if they have agreed on this.
If the contract with the primary investor was concluded in notarial form, the transfer of rights will also be certified by a notary and amounts to 1% + notary services (about UAH 3,500).

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For a new investor, the contract of transfer of rights is not the final stage of obtaining ownership of an apartment. After putting the house into operation, the new investor’s ownership right is registered either immediately in the State Register of Property Rights in the registration service (or from 2016 with a private or public notary), or the basic contract for the purchase and sale of the apartment is concluded.