Buying and selling real estate in Ukraine: procedure, stages, documents

Purchasing and selling real estate is a standard and commonplace process in life. However, it's evident that real estate holds significant value and is a substantial investment in today's context. As you approach the process of acquiring real estate, it's essential to engage highly skilled attorneys. This will help you avoid the common pitfalls and safeguard your personal or borrowed funds.

In this article, we will delve deeper into the intricacies of the real estate acquisition procedure, with a specific focus on apartments. We will explore the potential complexities that both buyers and sellers might encounter during property transactions. Our insights are based on practical experience, having facilitated numerous real estate deals.

We understand the practical dynamics, the challenges our clients may face, and, most importantly, how to proactively address them.

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Apartment Purchase: Procedure, Stages, Documents

The process of buying or selling an apartment entails the formalization of a property sale and purchase agreement, which is duly notarized by all parties involved. This agreement holds the status of a legally binding document that verifies ownership rights to the apartment. However, the sale and purchase agreement isn't the sole contractual mechanism for the transfer of property rights over real estate. This can also take the form of an exchange agreement, a gift deed, or various other types of agreements. Nonetheless, in this context, we will primarily explore the traditional procedure of property acquisition in Ukraine.

The complete process of purchasing real estate usually encompasses the following stages:

1. Client's Property Selection and Real Estate Audit.

Arguably one of the most crucial steps. During this phase, legal experts thoroughly examine the property, its documents, and the owner's status, meticulously identifying potential risks associated with acquiring the property or entering a sale-purchase agreement. The real estate assessment includes cross-referencing the property with available registries, reviewing its technical documentation, and evaluating any completed renovations. We once encountered a situation where, while inspecting an apartment for a client, we discovered an unregistered reconstruction. This change increased the property's area by 8 square meters, consequently affecting the price per square meter of the apartment. Importantly, this reconstruction had not been officially sanctioned. After notifying the client, we jointly decided to explore other real estate options for purchase.

2. Addressing Deficiencies.

Sometimes, the analysis reveals that the apartment is not ready for sale. This could be due to minors being listed as occupants, the absence of a technical passport, or other circumstances that objectively hinder the sale and purchase process for the apartment.

3. Preparing for Apartment Sale and Purchase in Kyiv

Once the apartment is deemed suitable for sale and purchase and the commercial terms of the transaction find agreement among all parties, we initiate the necessary preparations for the real estate deal. This phase encompasses:

• Negotiating the terms of the sale and purchase agreement.
• Coordinating a meeting between the parties at the notary's office for the signing.
• Collecting and verifying all required documents.

The effectiveness of this preparation phase is pivotal, ensuring meticulous attention to every detail and nuance. Occasionally, a sale and purchase deal may encounter obstacles at the notary's office or become intricate due to the absence of specific documents or non-compliance with certain obligations. We once encountered a situation where the seller was required to settle an income tax on the day of the apartment sale, and had funds distributed across two distinct bank cards, yet the bank's imposed limits obstructed the transfer of the necessary amount. Consequently, all parties needed patience while awaiting the seller's resolution of this issue.

4. Guiding the Apartment Purchase Transaction in Kyiv

After all, details have been agreed upon, our legal experts oversee the actual sale and purchase process at the notary's office. While facilitating the agreement's execution, our lawyers meticulously review documents, assist with the notary or other involved parties, and, most importantly, adeptly handle any unexpected issues that may arise. For instance, in one transaction, the seller decided to make changes to the sale and purchase agreement just before signing, after having reviewed the document beforehand. Thanks to the presence of a lawyer at the meeting, we successfully resolved this matter. Without legal representation, the buyer could have found themselves in an uncomfortable situation.

The transaction guidance concludes with modifications made to the property rights registry, and the new apartment owner takes possession of their coveted property. To fully complete the process, it's also advisable to consider changing the locks on the apartment door.

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What documents should be prepared for selling property in Kyiv?

When selling real estate in Ukraine, typically the following documents are required:

• Original proof of title document (such as a sale-purchase agreement, exchange, gift, or other document that establishes the owner's property rights to the real estate).
• Passport and TIN of the seller(s) and buyer(s).
• In the case of married parties, the original marriage certificate and notarized consent from the other spouse.
• Property appraisal report.
• Technical passport.
• Additional documents that may be necessary in specific situations.

Inspecting Property Before Purchase

The initial and most pivotal stage involves conducting a thorough property inspection prior to its acquisition. We offer this service and have garnered valuable insights from our own experience, highlighting areas where potential "hidden pitfalls" might exist. Our legal professionals execute a comprehensive assessment, encompassing meticulous audits of the property, scrutinizing its owner, and identifying other potential complexities that could arise during acquisition, or even result in financial losses.

Property Verification

Our process entails examining property using authentic title documents, cross-referencing information from public registries, reviewing technical passports, and gathering any other relevant data available. Furthermore, we strive to reconstruct the property's transaction history, delving into how the present owner legally obtained the property. This aspect holds significant weight, though it's often overlooked by the majority of legal practitioners. Should we come across property-related legal disputes or have reasons to suspect unlawful property acquisition, we cannot endorse proceeding with the purchase of such property.

For instance, let's consider a real-life scenario from our experience. Through meticulous property inspections, we unearthed that a previous property seller (who was the owner before the current one) was embroiled in a legal dispute over ownership rights to multiple properties. These represent genuine risks for our clients. Our objective is to shield anyone who seeks our legal support during the acquisition of apartments, offices, houses, and more, safeguarding them against unforeseen adversities.

Verification of Seller/Buyer

We also conduct checks on the seller and buyer (depending on which side we represent) to ensure there are no restrictions, arrests, ongoing legal actions, and so forth. There should be no grounds for contesting the agreement.

Examining Other Influential Factors

This stage is rife with intricacies and nuances. For instance, in one transaction, the seller was represented by a proxy holder. Upon reviewing the power of attorney, we uncovered an issue – the document's number did not match the actual power of attorney. Consequently, the power of attorney was deemed invalid. Another example: during a review, it came to light that minors were registered as residents on the property. This could have been grounds for a notary to refuse to authenticate the property sale agreement. The seller had to deregister the minors from the property. Moreover, our examination revealed outstanding utility payments. In this instance, the parties agreed on compensation.

Completing the Property Transaction at the Notary's Office

Perhaps the simplest yet undoubtedly the most crucial moment. Parties often experience nervousness while signing at the notary's office due to the significant investment involved. As legal representatives, we strive to ensure that the agreement is executed smoothly and without complications.

Typically, at the notary's office, the parties sign the purchase and sale agreement, conduct financial settlements, and pay taxes. After all, calculations are finalized and documents are signed, the notary updates the property rights registry and issues copies of the relevant documents to the new owner. The previous owner hands over the keys, and the legal team's involvement concludes.

However, there are cases when the transaction becomes more intricate, such as when transferring funds from abroad to the seller's bank account. Such a transaction might take a considerable amount of time, and patience is necessary in this situation. Alternative options to consider include using a letter of credit, wherein the buyer transfers the funds to a designated account, and the seller can access them only upon the occurrence of a specific event (e.g., presenting the purchase and sale agreement).

In any scenario, ensuring a smooth agreement signing at the notary's office requires thorough preparation and careful coordination of all details. Only by doing so can all parties involved in the process be content.

Engaging in the buying and selling of real estate is a responsible endeavor accompanied by potential risks and legal prerequisites. It's certainly wise to enlist the support of a qualified specialist. Here's why:

• The foremost reason is your legal security. This also translates into savings in terms of finances, time, and emotional stress during the property transaction. A lawyer comprehends the procedural intricacies, and potential pitfalls, and will consistently champion the client's interests.
• A lawyer will authenticate the property, synchronize all details, and offer sound advice — essentially serving as your partner throughout the process.
• In the event of an unforeseeable situation arising during the transaction itself, the lawyer will take charge of its resolution.

Our team offers a comprehensive range of services for buying or selling property in Ukraine:

• Property verification
• Remote property sales (from abroad)
• Preparation of property transaction contracts
• Support for land purchase and sale
• Assistance with commercial property transactions
• Arrangement of transactions with reputable notaries, and more

Get in touch with our team of legal experts, and we will be delighted to become your trustworthy partner, providing comprehensive legal assistance throughout the entire property buying or selling process. Submit your inquiry today to start a successful and secure agreement!

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