The assignment agreement on the real estate primary market
The assignment agreement is often used on the primary market due to the fact that most of the apartments in the early stages of construction have been bought by investors and they later sell their apartments . Because the building is not finished, the ownership of the apartment is not registered, we can not conclude a direct purchasing contract at the notary office.
The only option at this point is the assignment agreement. Under this agreement, the first buyer (a person who has purchased the apartment) sells its rights to a new buyer.
The assignment agreement requires to check next points:
1. All relationship between the new buyer and the construction company is governed by the contract that had been signed earlier between the construction company and the first buyer. It can be the preliminary purchasing contract, the contract for payment of shares in HBC, the contract of sale of property rights.
2. The assignment agreement should be concluded at the same form as the first contract. If the preliminary purchasing contract was notarized, the assignment agreement is also need to be notarized.
3. To conclude the assignment agreement it must be the consent of the construction company. In this case, such consent must be in writing. In our opinion, the сonstruction company should be the party of such assignment agreement.
4. Depending on the scheme of sale, the assignment agreement may require additional actions. For example, if there is the housing cooperative, the new buyer must become an associate member of the cooperative and pay the entry fee.
5. The new buyer must get the confirmation about the payments of first buyer to the construction company.
6. The funds of the assignment agreement is not the costs for apartment. This is the price for the assignment rights.
These are just some aspects related to the conclusion of the assignment agreement on the primary market. In any case, the assignment agreement only adds the risks of purchasing.
For receiving advice or legal support in purchasing apartments on the primary or secondary market, contact tel. 096-002-01-00.