Quick checks on the Internet before the real-estate contract has been concluded

Quick checks on the Internet
before the real-estate contract has
been concluded
practical hints
“Yur Bureau” LLC
tel.: +7 495 6259524; www.yurbureau.ru; E.Kazankova@yurbureau.ru

«YurBureau» Company
“Yur bureau“ LLC
tel.: +7 495 6259524; www.yurbureau.ru;
E.Kazankova@yurbureau.ru
• More than 7 years of successful law practice;
• Close-knit team, consisting of the alumni of
the leading Russian universities;
• Real-estate consulting and litigation is one
of our main focus-areas;

• Please note that the majority of the print-
screens were made with the use of google-
translator, since almost none of the web-
sites have full English versions yet.
• Whenever you need any assistance with
language matters you can rely on us.
ООО "Юридическое бюро"
тел.: +7 495 6259524; www.yurbureau.ru;

Issues arising when dealing with real
estates contracts
3 main categories:
Ties between the real estate object and the
party to the contract (title)
 The state of the real estate object
 Legal capacity of the party

Legal ties between the subject matter
and the party
Before the agreement is concluded it is essential to make sure the vendor has
a right to dispose of this real property.
One can check it the following way:
1) Get 3 types of extracts from Uniform State Register of Rights to Real
Estate and Transactions: the Standard extract on the rights to real estate,
the Statement on persons who received data on a real estate object, the
Extract on real estate transactions;
2) Get the extract from Uniform State Register of Rights to Real Estate and
Transactions in electronic form at www.rosreestr.ru
3) Get the basic information about the real estate object at www.rosreestr.ru
(Public services- List of Services – additional features– Background
information on real estate on-line).
It is possible to search for an object on-line by its cadastral number,
reference number or address. You can get the information about the
recorded title and its limitations (attachments) ON-LINE AND FOR
FREE.

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Evident difficulties with the real estate
objects
Types of objects:
• Apartments
• Land with or without constructions
• Rights (co-investment in housing construction)
Main obstacles:
1. Attachment of the estate
2. Persons registered or entitled to live in the apartments
3. Alterations
4. Technical state of the real estate object
5. Communal area transactions
6. Nullity of one of the previous transactions (simultaneous chains of
titles to one and the same object)

Attachments
First of all one can find the information about the attachments in the Extract from Uniform State Register of
Rights to Real Estate and Transactions or on-line at www.rosreestr.ru.
However there might be a situation when the court has ruled to attach the estate but the registering authority has not yet
done it. An agreement concluded in between the decision of the court and the attachment itself can lead to
undesirable consequences for the purchaser (the court can consider him a mala fide purchaser since the
information on the judicial cases is public).
How can one check whether the court decided to attach the estate?
• Decide on the court jurisdiction (exclusive jurisdiction – district courts; territorial jurisdiction – at the location of
the estate). List of the district courts of Moscow is at www.mos-sud.ru
• Check at the official page of the court (for example http://dorogomilovsky.msk.sudrf.ru/) the availability of the legal
proceedings, connected with the particular estate and its owner.
• It is possible to search at section «Court records» - «Case search», for example by name of the owner.
• Check the other common jurisdiction databases:
• http://судебныерешения.рф/
• http://rospravosudie.com/
• http://actoscope.com/
• http://www.gcourts.ru/
• http://docs.pravo.ru/
One can also check on-line whether the enforcement proceedings have been initiated in relation to the vendor. The web
page of the Court Bailiffs Service provides public with such an opportunity http://www.fssprus.ru/.
If the sum to be executed is significant it is quite possible that the estate has been attached.

тел.: +7 495 6259524; www.yurbureau.ru; E.Kazankova@yurbureau.ru

____________

Registered people or people entitled to live in the
apartments
Precautionary measures before the transaction:
It is necessary to get the extract from the house register. One can take it at local
residents' registration office. All the people who live or have lived in the
apartments are named there. Currently it`s not possible to get this
information on-line but in the nearest future it will be possible at
www.gosuslugi.ru. It will also be possible to find out the address of an
individual there if he agrees that such information will be available about
him.
It is important to make sure the guardianship authorities have approved
the disposal of the real estate so as to preclude the possibility of a
situation when any minors claim rights to the estate you are going to buy.
• A person that used to live in the apartment but whose registration was
temporarily terminated for a period of time (due to army service, work in
foreign countries or custody) retains the right to live in the apartments or to
privatize it and can therefore vindicate his rights. In this case it is important
to get his or her written waiver of the rights to the real estate in advance.
• If the apartment was acquired under the annuity agreement with life
tenancy of the ex-owner, then it is important to get his death certificate,
since the new owner can sell the apartment even when he is alive, but the
ex-owner will retain the right to live there.

People registered at the address
Several enterprises can be registered at one address. In case you buy such object –
some inconvenient matters such as receiving of their mail or telephone calls
can emerge.
In order to avoid this situation it is helpful to check the address at nalog.ru.

Technical state of the real estate object,
cadaster and alterations of the apartments.
Technical state of the real estate object is important when it comes to the
secondary real estate market.
Documents in this connection can be requested at administering company or at
housing cooperative. The information about such entities can be found at
www.dom.mos.ru . It is also possible to check there information about the
utility services and the maintenance of the house or the certificate of the
house etc.
The real estate object can be also checked on public cadastral map at
www.maps.rosreestr.ru and www.wikimapia.org (the underground lines are
marked there in relation to buildings).
If the apartment was illegally alienated then Moscow Housing Inspection on
the basis of the requests of the tenants may claim for restoration in court.

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Credibility of the data contained at
Public cadastral map
Public cadastral map does not ensure the credibility, accuracy, completeness and timeliness of the
information contained there, nor does it guarantee the correspondence between the requests and desires of
the User and the Information (par. 5.3. of the Agreement on the usage of the Public cadastral map
http://maps.rosreestr.ru/PortalOnline/terms.html)
However it is worth notifying that among one of the grounds for which Federal Service for State Registration,
Cadastre and Cartography may suspend state registration of the title to a building is overriding the land lot,
according to the data from Public Cadastral Map.
This situation does not correspond to the main purpose of Public Cadastral Map, since it was created as an
information service.
For instance, should one choose “Map of Russia (Rosreestr) in section «Map management» on the web-site,
the abovementioned building does overrides the land lot № 77:05:0001004:66 and is partially situated at the
land №77:05:0001004:70. However should you choose “Satillite data (Esri)” in section “Map management” the
abovementioned building fully marches the land lot № 77:05:0001004:66.

Unreliability of the data contained at
Public Cadastral Map
There are land lots which parts are situated within the territory of reservoirs according to the Public
Cadastral Map. This neither complies with Land Code nor with Water Code.

Nullity of a transaction in the chain
In case a transaction in the long chain of resales is acknowledged invalid because the property
was disposed of without the intention of the vendor, the real property might be
vindicated from a bona fide purchaser.
Therefore before the transaction has been concluded it is essential to get as much
information on all the transactions already made in relation to the property, as possible
(it is possible to get this information from the Extract on real estate transactions).
The following should be noted:
• The transactions were concluded under the co-investment agreement. The co-investment
participant may assign his rights to a third party (p.1 art.11 Federal Law № 214-FZ). As for
example in case № А40-134182/10 Ministry of Defense of RF vs. «494 Office of Chief
Resident Engineer» OJSC on recognition the agreement as void.
It is possible to find out whether the co-investment agreement has been recognized void at
commercial courts web-site kad.arbitr.ru. «Electronic Guard»,service is available at
guard.arbitr.ru It enables to follow the cases you are interested in.
• In case the apartments were received under the deed of gift, especially if this deed was
signed between next to kin, the reasons for this gift should be examined with attention. If
it was purchase formalized by the gift agreement, then this transaction will be deemed
fraudulent and void.
• Agreement of purchase of communal facilities in apartment block may be recognized
void, notwithstanding the fact that the registration has been formally completed.

Nullity of a transaction in the chain
The chosen remedies are of the utmost importance
• In case there are no contractual relations or relations emerging due to application of consequences of
invalidity of a transaction between the persons, the case on recovery of the property shall be dealt with in the
procedure of replevin. In case the parties do have contractual obligations the restitution shall be applied.
According to the Joint Decree of the Plenum of the Supreme Court of Russia and Higher Commercial
Court of Russia № 10/22 it is at court`s discretion to determine the essence of the dispute. In case there are
claims for vindication in the restitutionary claim, the Court shall apply articles 301, 302 of the Civil Code of
Russia.
• The person who claims his rights were violated may recover the damages from the Defendant.
It requires special remedies of the bona fide purchaser.

Party issues
1. Decedent's estate.
2. Authority to conclude transactions.
3. Inability to understand the nature of the act and
to appreciate its possible consequences
4. Spouse`s or ex-spouse`s claims.
5. Legal entity is a party to the transaction
(including a foreign off-shore company).

Decedent's estate
• It is necessary to check whether the vendor has any devisees. It is
quite difficult to find out this information since it is not public. If one
still manages to do this – it is important to find out the reasons for
their non coming into inheritance.
• Privatization. It is essential that the owner`s children (underage at
the moment of privatization) state in the written form in advance
that they are aware about the violation of their rights and of
expiration of the limitation period provided for challenging the
transaction on privatization.
• It is quite possible that after the inheritance had been released the
devisee who was unable to find out that the inheritance had been
released emerges. Moreover, there are certain groups of individuals
who are entitled to their portion in any case, even if the apartments
were devised to someone else.

Authority to conclude transactions
Authority.
If the owner makes a transaction via agent it is essential to
check whether the agent`s authorities have been properly
drafted. The Power of Attorney shall be signed in the
presence of a notary public. It is important to check the
validity term of the Power of Attorney and the authorities
specified therein. The principal might claim later that he
did not grant the power of Attorney or that he was unable to
realize the consequences of his acts.

Intention to make a transaction
Inability to understand the nature of the act and to appreciate its possible consequences.
A transaction may be challenged if it is proved that the person was unable to realize the
consequences of one`s own acts while concluding it.
If a man of advanced years is the owner of the apartment or a person is a subject to regular
medical check-up at psychoneurologic dispensary or an alcohol addicted person the
vendor might be recognized as incapable or impaired or unable to understand the nature of the
act and to appreciate its possible consequences, and the transaction might be therefore
recognized void. In this case it is necessary to get a statement from psychoneurologic dispensary
and narcological dispensary in relation to competence of the owner of the property. It is not
possible to receive such a statement by Power of Attorney, only the person himself may get it.
It is possible to carry out medical certification at the moment of signing the agreement. Retrospective
examination might also be done (that is after the death). It is accomplished on the basis of the
documents in relation to the clinical history.
Since it is only in court where it is possible to restrict the capability of the person or to recognize him
incapable, one may check whether such statements were filed in court in relation to the owner.
Limitation period for challenging a transaction on these grounds starts from the date of death, not
from the date when the person found out or should have found out about the transaction. However
sometimes Courts decide that the 3 years start from the moment the inheritance was released.

Spouse`s or ex-spouse`s claims
Possible spouse`s or ex-spouse`s claims should be taken into
consideration if the apartments we acquired in the course
of marriage.
Even if the owner is not married at the moment of signing
the agreement, it is necessary to check whether he was
married at least for the last 3 years preceding the moment
of transaction. It can be revealed by means of checking the
stamp at his passport, but what even more reliable is the
owner`s statement signed in the presence of notary public
that he has not ever been married or is not married for the
moment. In case he is married It is necessary to get the
other spouse`s waiver of rights to the property.

Legal entity is a party to the transaction
(including a foreign off-shore company).
1. Find the Russian legal entity at www.egrul.nalog.ru. Paid or free of charge
Check whether there are any risks for your business:
• Information on the legal entities and sole proprietors in whose relation the documents for state registration
(including the registration of the amendments to the Charter) were submitted.
• Notifications of the legal entities published at “State Registration Reporter” about the decisions on liquidation,
reorganization, decreasing of the charter capital, on acquiring by a limited liability company of 20% of the charter
capital of another company and other notifications that shall be published therein in accordance with the Russian
legislation.
• Information published in “State Registration Reporter” about the decisions taken by the registering authorities on the
oncoming exclusion of a legal entity from Unified State Register of Legal Entities
• Legal entities which executive bodies include disqualified persons
• Addresses, stated as registered seats by different legal entities for state registration
• Information on persons who relinquished to manage the company in court or in whose relation this fact was proved in
court.
• Information on the legal entities, whose contacts at the stated in Unified State Register of Legal Entities address are
missing.
Moreover, one may check the existence of any information about himself or his counterpart in Database of Enforcement
Proceedings of State Bailiffs Service www.fssprus.ru
2. Get the Extract from Unified State Register of Legal Entities, check who is the director and the participant For
example with the use of http://www.k-agent.ru, you can also check whether the director is a mass director,
or the founder is the mass founder.

Contacts:
• www.yurbureau.ru
• Facebook: www.facebook.com/yurbureau
• Tel: +7 495 625 95 24
• Fax: +7 495 625 95 24
• E.Kazankova@yurbureau.ru

Thank you!

Quick checks on the Internet before the real-estate contract has been concluded

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Quick checks on the Internet before the real-estate contract has been concluded