What Is A Contract Of Equity Participation In Construction

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What Is A Contract Of Equity Participation In Construction
What Is A Contract Of Equity Participation In Construction

Video: What Is A Contract Of Equity Participation In Construction

Video: What Is A Contract Of Equity Participation In Construction
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The contract of equity participation in construction is the main document confirming the rights of a person who has invested money in the construction of a residential building to receive an apartment after the completion of construction.

What is a contract of equity participation in construction
What is a contract of equity participation in construction

Share agreement

Federal Law No. 214-FZ of December 30, 2004 "On Participation in the Shared Construction of Apartment Buildings and Other Real Estate Objects and on Amendments to Certain Legislative Acts of the Russian Federation" is the main regulatory legal act governing the relationship between the developer and the investor in the process construction of an apartment building and after the completion of construction.

In particular, Article 4 of this regulatory legal act provides that such relations must be formalized by a document of the established form - an agreement for participation in shared construction (DDU), which contains all the basic conditions of a transaction concluded between an investor and a developer.

So, paragraph 4 of this section of the current legislation clearly establishes which sections should contain each contract that is valid. These include a detailed and clear description of the object, that is, the apartment that the investor must receive upon completion of construction, the period of its construction and transfer to the investor, the price of the apartment and some other information. In this case, if at least one of the listed conditions is absent in the agreement, such a document from the point of view of legislation will be considered invalid.

At the same time, if the developer violates its obligations under the contract, for example, delaying the delivery date of the object, the investor can recover from him a forfeit, which will be 1/300 of the refinancing rate of the Central Bank of the Russian Federation for each day of such delay. For example, with an apartment price of 2 million rubles and the current value of the refinancing rate equal to 8.25%, the penalty for the day of delay in the delivery of the apartment will be 452 rubles.

Registration of the contract

In fact, the contract of equity participation in construction is a document designed, first of all, to ensure the observance of the legal rights and interests of the investor, since in the situation under consideration he is in a vulnerable position: by investing his own money or attracting a mortgage loan to implement the plans of the developer, he remains without money for the period of construction without an apartment, and therefore is at risk until the moment the housing is put into operation.

Therefore, the current legislation, in addition to the very fact of the conclusion of such an agreement, provides for additional tools to protect the interests of the investor. These include, in particular, the state registration of agreements on equity participation in the justice authorities, provided for in paragraph 3 of Article 4 of Law No. 214-FZ. At the same time, in accordance with the instructions of this clause, the contract is considered concluded not from the moment of its signing by the parties, that is, the developer and the investor, but from the moment of state registration.

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