Property checks and transaction support

What is happening

A company is buying premises or a building from another company. The seller is in a hurry and the register extract is clean, but the seller itself faces enforcement proceedings and tax claims. If it becomes insolvent in the next few years, an insolvency practitioner may challenge the sale.

The property has changed hands several times in a short period, and the former owners include heirs and married individuals. Every link in that chain can give rise to a dispute, and it has to be checked against the documents, not just the current extract.

The parties have agreed the price but not the mechanics: who pays and when, what happens if registration is suspended, when the keys are handed over, and who clears the utility arrears. These are the questions that make deals fall apart after signing.

What the law says

• Information on the property, the right holder, restrictions and encumbrances is held in the Unified State Register of Real Estate (EGRN), and the procedure for registering a transfer of title is set by Federal Law No. 218-FZ of 13 July 2015 "On State Registration of Real Estate". An extract shows the current position, not the full history.
• Under the Civil Code a contract for the sale of real estate is made in writing as a single document, and the transfer of ownership is subject to state registration: until then the buyer does not become the owner.
• A sale of real estate by a company may require approval as a major transaction or a related-party transaction under Federal Law No. 14-FZ of 8 February 1998 "On Limited Liability Companies"; without approval the transaction may be challenged.
• Where an individual seller is married, the Family Code requires the spouse's notarised consent to dispose of jointly owned property. Without it the spouse has grounds to challenge the sale.
• Transactions of a seller that is declared bankrupt soon afterwards may be challenged under Federal Law No. 127-FZ of 26 October 2002 "On Insolvency (Bankruptcy)", including as made at an undervalue or to the detriment of creditors. That is why the seller's financial position is part of checking the property.
• For secure payment, a letter of credit, an escrow account or a notary's deposit is used: the seller receives the money only after the transfer of title is registered.

What we do

• We obtain and analyse register extracts, the history of title transfers, and the title and technical documents for the property.
• We check the seller: the signatory's authority, corporate approvals, enforcement proceedings, litigation and signs of insolvency; for individuals, also marital status and inheritance history.
• We compare the actual condition of the property with the documents: alterations, extensions and whether the permitted use of the land fits.
• We give you a short opinion: buy, buy with caveats, or do not buy, and why.
• We draft the contract around the risks identified: seller's warranties, payment procedure, handover terms and what happens if registration is suspended.
• We support signing, payment and filing for registration, and respond to notices from Rosreestr, the registration authority.
• We oversee the physical handover of the property and the settlement of utility and other charges.

What we will need from you

• The address of the property and its cadastral number, if known.
• The seller's documents for the property: the basis of acquisition, the technical or floor plan, and details of any alterations.
• Information on the seller: for a company, its constitutional documents and the signatory's authority; for an individual, passport details and marital status.
• The draft contract or the parties' agreement on price, timing and payment procedure.
• How the purchase is financed: own funds, a loan or leasing, since that shapes the mechanics of the deal.