Legal support of purchase and sale of real estate at auction

Currently, buying and selling real estate at auction is a fairly common way to acquire property. This is due to the attractive price of lots put up for auction, since it can be reduced during the auction.

It is necessary to distinguish between buying and selling real estate at auction, under which a contract for the purchase and sale of real estate is concluded with the buyer, and buying at auction the rights of claim under credit and mortgage agreements and concluding an assignment agreement. Since in the first case, the buyer receives ownership of the real estate, and in the second – the right to claim funds unpaid by the debtor or the collateral (usually real estate). The moment and procedure for transferring ownership of the property in these cases are different.

Current articles:

– Residential Complex “Vash Dobrobut” Irpen, Kiev region – a brief legal audit (review) of construction
– Legal support for the assignment of rights of claim under a loan (debt assignment agreement)

– Agreement of sale and purchase of property rights

You can learn more about buying rights of claim under credit and mortgage agreements at an auction from the article Legal support for the assignment of rights of claim under a loan (debt assignment agreement). And further on we will talk about the purchase and sale of real estate at an auction for which a contract of sale of real estate is concluded with the buyer.

The sale of property takes place in the form of auctions (with the personal presence of participants) or auctions in electronic form (electronic trading). Each of these forms of auction is legal.

List of documents required to participate in a real estate auction:

• passport, participant identification number;
• if the participant is married: passport, spouse’s identification number, marriage certificate;
• if the participant is divorced: divorce certificate, court decision;
• if the participant is a widow/widower: marriage certificate, death certificate.

Information:

• contact phone number;
• e-mail address;
• certificate with bank account details.

For legal entities:

• statute;
• passport, identification number signatory;
• power of attorney or protocol and order on the appointment of the director;
• target protocol for participation in the auction and conclusion of agreements on the assignment of rights of claim under the loan and mortgage agreement;

Information:

• contact phone number;
• e-mail address;
• certificate with bank account details.

A written agreement for the provision of legal assistance must be concluded with the auction participant. Payment is made in 2 stages: 50% upon signing the contract for the provision of legal assistance, 50% after fulfilling the obligations under the contract (conclusion of the purchase and sale agreement and registration of ownership with a notary).

Cost of the service: 6,000 UAH.

Additionally, the participant pays:

• Guarantee fee for participation in the auction 10% of the initial price;
• Site commission: 3% of the amount of the purchase of the object (at an electronic auction) or the amount of the registration fee set by the auction organizer (at an auction with personal presence);
• Cost of notary services for registration of the transaction: 6,000 UAH.
• Notarized consent of the spouse: 500 UAH.

Power of attorney for representation of interests for an employee of our company in notary office for signing documents and a real estate purchase and sale agreement and registering the buyer’s ownership rights in the State Register of Property Rights – 500 UAH.

List of services included in the TURNKEY auction support package:

• consulting from the moment of concluding the contract for the provision of legal services until the conclusion of the purchase and sale agreement (regarding the bidding/risks/prospects/further actions after signing the purchase and sale agreement (judicial and enforcement proceedings to remove encumbrances (pledge, mortgage, arrest);
• calculation of the cost of paperwork and the procedure for participating in the auction;
• checking the lot and the owner for risks and negative consequences with the provision of information about the check to the customer (auction participant);
• assistance in registering for the auction and filling out all participant documents, submitting an offer, participating in the auction (from 09.30 to 17.00);
• monitoring the payment and crediting of the security deposit, site commission or registration fee;
• assistance in obtaining and monitoring the signing of the Auction Protocol by all parties (the winner of the auction, the organizer of the auction, the customer of the auction);
• coordination of the date and time of signing the purchase and sale agreement with the notary;
• collection of the package of documents required for the transaction;
• drawing up/checking (proofreading) the purchase and sale agreement offered by the notary for signing, making amendments and their subsequent approval;
• visit to the notary to register the ownership of the buyer in the State Register of Property Rights;
• transfer/free sending of documents by Nova Poshta across Ukraine to the customer (participant) (if necessary) and final payment.

Related services:

The following risks and difficulties may arise during the verification of documents and information on the lot:

• information about the land plot is not registered in the State Land Cadastre of Ukraine;
• there are encumbrances on a specific property and/or there are arrests on all property in the State Register of Property Rights, arrests and encumbrances of third parties;
• information on ownership rights is not entered/registered, or is registered with errors, etc.;
• the presence of open court proceedings or court decisions on real estate that is put up for auction or enforcement proceedings are opened on this decision.

Non-standard cases may also arise, such as the one that occurred in our practice: the seller of real estate at an auction was the consulate of a certain country. In this case, our company’s specialists checked the seller’s authority and the compliance of such a sale of real estate with the norms of both Ukrainian legislation and the legislation of another state, in connection with which legal protection of the transaction was ensured. As a result of the professional actions of our company’s employees, the client successfully purchased real estate.

Why is legal assistance necessary in supporting the purchase and sale of real estate at an auction?

Purchasing real estate at auction by concluding a purchase and sale agreement is a complex procedure that has many technical, legal and time nuances. In order to successfully conduct an auction and obtain ownership of real estate, it is necessary to comply with all established rules, since even the slightest mistake made in preparation for participation in the auction (registration of a participant, late payment of a security deposit, submission of an offer, late signing of the protocol) or the absence of the necessary documents and applications may be grounds for disqualification of the Auction participant. However, this mechanism is real and works in practice.

Our company has many years of experience in conducting auctions, since it has certified specialists of the State Enterprise “PROZORRO” of the Ministry of Economic Development and Trade of Ukraine, as well as licensees certified by the State Property Fund of Ukraine on its staff (persons who have the right to conduct auctions). In this regard, our company positively provides legal support to clients in acquiring real estate through purchase and sale at auctions.

If you want to purchase a real estate property at an affordable price, but do not dare to do this through purchase at auction due to the complexity of the procedure, then the specialists of our company will consult you and, if necessary, provide comprehensive support for the transaction of purchase and sale of real estate from the moment of registration as a participant until the signing of the contract of purchase and sale of real estate.