How to check a developer: what you need to know when buying an apartment?
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The real estate market in Ukraine attracts investments both from residents and non-residents. Thousands of new residential buildings are built in Ukraine every month. As of winter 2021, there are about five hundred developers in total on the market and each of them has its own history and business reputation.
Everyone who is going to make such an investment wants to know: How to buy an apartment safely? Can I rely on the property developer and trust it my money?
However, in order to understand whether the developer is reliable, it is not necessary to study all its data in detail. It is important to pay attention to the key points that will help you assess the safety of your property purchase. In order to save your time and money, it is better to contact lawyers who can do all the work for you in the shortest possible time.
Today we will elaborate on key points you need to pay attention to, when buying an apartment and how to make your real estate transactions safe.
How to choose a property developer: Things to remember
Due to the peculiarities of the real estate market, there is a practice when several companies from different spheres participate in construction. They may include general contractor, developer, customer, investment fund, etc. It is important to know who to pay attention to when checking all the information.
In order to save your time, we decided to gather key information you should pay attention to, when buying real estate, regardless of its location and construction phase.
It is important to use open registers and various services for monitoring companies’ activities. They can be the main mechanism in such cases. However, it is not easy to understand how they function and how to use them to their full potential.
A good example is the Register of Court Decisions, where you can check decisions on different companies. But you should understand the functions of the Register and meaning of the court decisions. And it is especially important to understand the practice of functioning and implementation of court orders in some cases.
The court decision does not always negatively affect the developer or any other company that participate in the construction.
As an example, we can use a case from from our practice, when during the inspection we discovered that the property developer lost the case against the Ministry of Culture of Ukraine.
Case: The Court issued an order to obtain a permit, since the construction took place close to a place protected by UNESCO. However, this does not mean that the company must stop its construction works, since the Ministry of Culture does not have the necessary powers to do so.
You must check whether the company has the necessary permits. Any construction works require a license with appropriate class of consequences and a list of works.
Interesting! Since 2015, most licenses are no longer issued in paper form, so it is important to be able to find them in the registers. But the Internet resources of the State Architectural and Construction Inspection of Ukraine do not function correctly at the moment and usually do not display all the necessary information.
Developers may be required to obtain other permits, as in case described above (the Ministry of Culture), when it was necessary to obtain a permit for the construction of buildings next to the world’s cultural heritage.
A lawyer can help you to understand what documents the developer should have in your personal case.
Related article: Construction License: Procedure For Obtaining A License, Challenges, Practical Experience
It’s important to know how to communicate with a property developer. This stage is important, if you haven’t checked out the property yet.
The right approach to the conversation with the developer and the specific legal knowledge of our lawyers in this area will help you to immediately understand whether it is worth to continue the conversation.
In addition to information about the company, you should also check the information on the directors or owners (founders) of the company. They may also be under investigation, on the wanted list or have a criminal record or debt.
Of course, it’s not easy to check such things, as different persons may be registered under the same name. In addition, not all people know where they can look for such information. It is better to contact specialists, who know how to correctly assess the facts and connections between the persons or companies involved in order to avoid self-deception.
It is important to get legal support and thoroughly analyze agreements, which the investor (buyer) is going to sign with the other party.
You should learn:
- What is the company?
- Who is the director and the owner of the company?
- How long has it been operating in the real estate market?
- What business reputation does the company have?
It’s also worth noting that owing to the specifics of our work, we often communicate with the employees of state authorities, whose opinion is usually as valuable, as the inspection of the registers and its legal assessment, when analyzing a real estate.
Cost of the Real Estate Due Diligence
So, you are faced with the question: How to buy an apartment? Remember that investing in any property is an important step, you shouldn’t neglect security in this regard, no matter what you want to invest in.
It does not matter whether this is a land plot, unfinished construction project or commissioned residential complex. The safety of your money and time depends only on your decision and desire to make a safe investment.
The cost of our services for real estate due diligence starts from USD 540. Think about whether it is worth cutting corners, when you may lose thousands or even tens of thousands of dollars, if something goes wrong.
Consultation with a real estate inspection lawyer
If you want to understand the real estate inspection process, contact our lawyers for an introductory consultation. A specialist will answer the following questions:
- How does the property inspection take place?
- How long does it take?
- When can I start buying a property?
If you book a property inspection with our company, its cost will be included in the price of the service.
Read more about how the property inspection is performed here.
If you want to get legal advice on the safe purchase of an apartment or other real estate, or order legal support of your transaction - call us!
