How to Terminate a Contract with a Developer and Get Your Money Back?

Our client, a business owner based in Poland, approached us for assistance in remotely handling the sale of real estate in Kyiv. A few years ago, he had purchased an apartment on an installment plan and consistently made payments. However, with the onset of martial law, financial difficulties arose, preventing him from fulfilling his contractual obligations to continue payments to the real estate developer.

Eventually, the developer began threatening to terminate the contract for non-compliance and imposed significant penalties. The client had already paid a substantial portion of the contract and understandably did not want to lose that money. For this reason, he sought our legal assistance to assess the situation and find a solution to terminate the contract while recovering the maximum amount possible.

With our experience in similar cases and legal expertise, we were able to find a resolution that ensured the preservation of the client’s funds and peace of mind. Read on to discover how to handle such situations and mitigate risks when dealing with real estate transactions.

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Evaluating Solutions: Assignment of Rights and Contract Termination with the Real Estate Developer

Our legal team analyzed the terms of the contract with the real estate developer and provided a detailed assessment addressing the client’s questions, considering all potential risks and outcomes.

1.     Assignment of Property Rights: This option allows the client to recover the full amount paid, minus a percentage of the contract price and an additional deduction based on the forward contract execution value.

To sign the assignment agreement, the client must either travel to Ukraine to sign the agreement in person or issue a power of attorney to a representative authorized to sign the agreement in Ukraine. It is important to note that an assignment of rights is only possible before the building is officially commissioned.

Our lawyers contacted the real estate developer and confirmed that the building had already been commissioned. As a result, the assignment of rights was no longer a favorable option for our client.

2. Contract Termination: This procedure can be carried out either personally or through a power of attorney.

- a notarized power of attorney granting authority to perform all necessary actions;

- notarized copies of the internal passport and tax identification number, or the originals of these documents;

- a residence registration extract from Ukraine.

Please note! If the individual is married, additional formalities must be completed to terminate the contract with the real estate developer.

Following our consultation, considering the client’s specific circumstances, we recommended initiating the contract termination procedure.

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Remote Termination of a Contract with a Real Estate Developer and Refund to the Client

Our legal team prepared a draft power of attorney for the client to sign with a foreign notary. Since the signing was conducted in Poland, we informed the client that an apostille was not required in this case. Additionally, the client obtained notarized copies of their documents and sent the complete package to our office. In turn, we arranged for the notarized translation of these documents into Ukrainian.

Acting under the power of attorney, we:

• Initiated the contract termination procedure with the real estate developer.
• Signed all required documents on the client’s behalf.
• Facilitated the refund process, ensuring the client received their funds within a week of completing all necessary procedures.

The refund from the real estate developer was processed via a bank transfer to the client’s account. We carefully calculated and negotiated with the developer’s legal team to secure a refund with minimal penalties deducted for the client.

Each situation is unique, but our approach is consistent: we thoroughly analyze all possible options, choose the most optimal solution, and implement it with minimal risks for our clients. This case once again proved that remote legal support can be efficient, effective, and successful.

If you need help resolving complex legal issues, we are always here to assist. Contact us today for a consultation.

Learn more about legal services for real estate here.

Read about remote real estate transactions here.