Publications What’s the right way to sell the apartment?

You can find a lot of articles on the Internet about how to buy an apartment correctly and not get caught by crooks. But there is little up-to-date information on how to sell the apartment properly, get more money, and less possible problems.

In practice, real estate sellers often approach lawyers and transaction support lawyers with various questions.

The first set of questions relates to the estimated value of the apartment, as buyers are often asked to understate the value of the purchase. The motives for this understatement may vary, but for the seller the understatement of the estimated value does not carry significant negative risks. In such a situation, the seller even wins, because in case of avoidance of the contract the apartment is returned to its property and the buyer needs to return less money than the seller received (due to understatement of the official value of the transaction). However, there are situations where the seller needs to show the source of the money received (for example, to cross the border with the money). In that case, it would be better if the amount of cash and the price of the transaction specified in the contract coincided, since it would be easier to explain to the border guards the source of the money. It should be recalled that at present it is not possible to significantly underestimate the estimate, because the value is formed automatically and the assessor from whom you will order the estimate performs a technical role rather than having the power to influence the estimated value of the property. 

The second set of issues relates to the taxation of the income of a real estate seller and payment of other mandatory payments. If the seller owns a property for less than three years or has sold other property in the last year, he will have to pay 6.5 per cent of the tax on the amount of money received. Accordingly, if the seller has owned the apartment for more than three years and has not sold anything in the last year, the tax does not have to be paid. The remaining issue is the payment of the notary’s services (or a fee of 1 per cent of the amount of the transaction if the contract is concluded with a notary public). Most often this amount falls on the shoulders of the buyer, but all depends on the subjective agreement between the parties, possibly 50 by 50. Another type of expenditure is the manufacture of extracts from the real property register prior to the transaction (usually paid by the seller and amounting to a small amount of up to UAH 1,000).

The third set of questions relates to the need to prepare the documents for the apartment or house for sale. The transaction must have:

  • Title deed (sales contract, title deed, certificate of succession, etc.);
  • Technical passport for real property (expiry date not exceeding one year);
  • An extract from the Register of Property Rights, which confirms the registration of ownership.
  • Extraction from the State land register in case of sale of the house.

If a document of title is lost, a claim for recognition of ownership of the property should be filed with the court. 
More difficult issues relate to the lack of proper administration of inheritance after a deceased person.   In such situations, it is most often necessary to apply to the court for an extension of the time for the acceptance of the inheritance or for the recognition of the ownership of the inherited property.
A lesser problem is the lack of registration of ownership in the property rights registry, provided that the seller has all the documents. Such registration may be made by a notary immediately before the transaction. Its value varies from 800 to 3000 hryvnias.
With regard to the sale of land parcels, the main problem remains the lack of a cadastral number, which leads to the refusal of notaries to enter into a sale of land. Thus, before disposing of a plot of land or a dwelling house, the seller has to order the production of technical documentation on the land, which is the basis for assigning a cadastral number. The cost of assigning a cadastral number varies from US$ 400 to US$ 600, depending on the additional problem.

The fourth set of issues relates to the existence of unanticipated arrests at a property. Such arrests may be of a different nature, involving, for example, traffic offences or debt collection. Arrests are most often withdrawn by the courts, but it is often possible to arrest the executive more quickly. If a trial is initiated, the transaction can be postponed for six months, as trials often do not end in less than six months. We advise you to contact a lawyer as soon as possible to help resolve the issue of the withdrawal of the arrest.

The fifth set of issues concerns the seller’s failure to comply with the terms of the prior contract. There are situations where the seller does not have time to prepare the documents for the transaction or cannot appear to the notary at the scheduled time. The buyer and the real estate agency immediately start to fear that the money received by the seller ($1-2,000) is a deposit, and if the seller refuses the transaction he faces double the liability. Immediately reassure the seller, the deposit can take place only if there is a notarized contract, in 99% of cases a preliminary contract (or a contract of intent) is concluded between the seller and the buyer without a notarial representation, which is irrelevant, and the seller will only have to repay the advance money to refuse the deal.

The sixth cluster relates to the receipt of zero (no-debt certificates) charges for utilities. Such documents are most often obtained by an employee of a real estate agency in preparation for a transaction. If the realtor is reluctant to do so, and says that the seller must do so in person, the seller must be talked to more categorically, since it will receive a considerable amount of income from the seller’s information to the buyer. Remember that public service debts are not an obstacle to the conclusion of a contract for the sale of an apartment.

Finally, the last set of issues related to the transaction itself. Remember that you do not have to sign the deeds for the sale of the apartment until you have been fully paid. Only after receipt of the money and verification of its validity on the relevant technical equipment can a contract of sale be signed. During the transaction process, you do not receive any documents, because the original sales contract is issued only to the buyer. Don’t worry, in case of a dispute, you can always get the necessary duplicates from the notary.

Separate mention should be made of the persons registered in the property. The purchaser may withdraw all registered persons from the registration of residence after the purchase of the real estate. Except for children. If there are children, the notary will refuse to carry out the transaction without the consent of the guardianship authority. The consent of the tutelage and guardianship authority may be obtained only if the child is provided with another place of residence, and if the child is the owner of the apartment (or part thereof) only if that the child acquires a similar right with respect to another property. It’s much easier to resell a child before a deal. It is possible to resell with the consent of both parents, or only one of the parents if the child’s place of residence is determined with such parent.

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