Survey results from the Ministry of Finance confirm that real estate investment remains one of the main alternatives to deposits. By investing savings in square meters, Ukrainians hope not only to protect them from depreciation, but also to earn. Buying an apartment in the early stages of construction is also a viable option for buying a property to improve living conditions, or making money on capitalization, due to the rise in price after commissioning.
However, life is unpredictable and there is a risk not only that the developer will fail, a heated economic crisis or loss of employment, but also all people – mortal.
In this article, we will look at the exact case when an investor individual dies and property rights are included in the inheritance. What if the construction of the house is not completed and the real estate rights are not fully completed? The heirs face legal problems of re-registering property rights to themselves. To resolve the complex issues of inheritance of investment rights, you must first consult a qualified lawyer who can find a profitable solution to his client’s problem.
First, let’s give a little help with the definition of terms by law. According to Part 2 of Art. 5 of the Law of Ukraine “On Investment Activity” investors are subjects of investment activity, who make decisions about investing their own, loan and attracted property and intellectual values in objects of investing.
According to Part 5 of Art. 7 of this Law the investor has the right to own, use and dispose of objects and results of investments, including reinvestments and trading operations in the territory of Ukraine, in accordance with the legislation of Ukraine. The objects of investment activity may be any property, as well as property rights (Article 4 of the Law). Article 9 of the above Law provides that the main legal document that regulates the relationship between the subjects of investment activity is a contract (agreement).
In the situation of inheritance and division of investment rights for construction, there are options to resolve both in the line of peace law and in the course of litigation.
As a general rule, the inheritance includes all rights and obligations that belonged to the heir at the time of the inheritance opening and did not terminate as a result of his death. The apartment is an object of investment in the construction object, which after completion of construction becomes a separate property. The property rights to the property belong to the investor prior to the completion of the construction and its commissioning. If during the lifetime the heir has not acquired ownership of the real estate, then the heir will also not be able to issue the property in the manner of inheritance. Only certain property rights that belonged to the heir at the time of opening the inheritance are transferred to the heir.
Civil law provides that the objects of civil rights are things, including money and securities, other property, property rights, results of works, services, results of intellectual, creative activity, information, as well as other tangible and intangible goods. Civil rights entities may be freely alienated or transferred from one person to another by succession or inheritance, or otherwise, unless they are removed from the civil turnover, are not restricted in circulation, or are not inalienable from a natural or legal person.
In its judgment of October 2, 2013 in Case No. 6-98css13, the Supreme Court of Ukraine stated a legal position according to which the fulfillment of monetary obligations under the investment agreement, namely full payment of the cost of the investment object (one hundred percent prepayment), indicates the act, aimed at the emergence of legal facts necessary and sufficient to obtain the right to request the transfer of ownership of the construction object or the acquisition of property rights to the object.
Now let’s try to explain this in a life-giving example, to make it easier to understand what these legal rules mean.
One of the options for investing in construction is the conclusion of a contract of purchase and sale of property rights (hereinafter – the contract) for the purchase of an apartment in a dwelling house. Consequently, the deceased person has entered into such an agreement, but the house is still under construction, and the payment of property rights will only take place after full payment of contributions. Payment for property rights was made under the terms of the contract on a monthly basis, for example, for three years.
The solution to this situation is possible in two ways, depending on the circle of heirs, their goals and capabilities. Yes, the contract may be terminated due to the death of the investor, that is, the testator. In this case, the developer must return to the heirs already paid for the apartment. If the contracting authority does not intend to repay the funds, then the protection of the rights of the heirs can be exercised in court.
Alternatively, the rights and obligations under the contract may be transferred to the buyer’s successor. As for the desire of the developer to “cooperate” with new buyers or the buyer, of course there is no clear answer here. As practice shows, each time the same situation can be solved completely differently, depending on the level of reliability of the builder over a specific period of time, current relationships of the parties, the ability of the buyer (his successors) to fulfill their obligations, the intentions of the parties for solving a problem situation, etc.
The heirs should pay attention to the terms of the investment agreement, including what documents confirm the full payment for the object and whether the costs in favor of the developer, if the investor is replaced by his successor. Typically, contracts indicate that it will terminate in the event of the buyer’s death. As a rule, the procedure of succession is not regulated at all. According to the law of civil law, the obligation is terminated by the death of the debtor, if it is inextricably linked to his person and can therefore not be fulfilled by another person. Also, according to the said article, the liability is terminated by the death of the creditor, if it is inextricably linked to his identity. Under the contract, the buyer acts both as a debtor (on his own obligation to pay the value of property rights), and as a lender (on the obligation of the developer to transfer the property rights to the buyer of the apartment and the apartment itself).
An additional successor agreement is a developer’s right, not a duty. However, upon requesting such a proposal, he must terminate the contract and return the heir to the investor, or enter into an additional succession agreement on the basis of inherited property rights. The developer can do nothing, then it will be a gross violation of the rights of the heirs, in connection with which the latter may file a prospective claim with additional requirements for penalties for late repayment.
It should be noted that the practice of succession under such contracts in such situations is not new to domestic developers, as some of them have already encountered similar cases, have some experience and relevant experience. However, is redevelopment advantageous for heirs, how to get the developer to contract with the heirs and not sell the apartment twice?
Attorneys in Kiev will provide you with timely legal assistance, namely, analyze the terms of the contract, negotiate with your developer on a possible deferral of payments, decide for a client in a positive key for him and focus on his current situation. If necessary, they will go to court to seize property rights, which will prevent their double sale.
In parallel with the developer, you need to consult a notary in order to open the inheritance, start an inheritance and establish the composition of the inheritance. To do this, you need to file a notary at the place of residence of the deceased within 6 months from the date of death of the buyer and to make a claim for inheritance.
Therefore, upon receipt of a certificate of inheritance rights, including property rights under an investment agreement, the final step will be to provide a copy of such certificate to the builder to confirm the grounds for succession. And, of course, the formalization of the succession itself is the conclusion between the heir and the developer of the relevant contract, under which the assignee is legally transferred all the rights and obligations of the buyer under the contract.
Consider the case where there are several heirs by law, since it may also have several options. First, the heirs agree with each other and may file a notary’s declaration of abandonment of the inheritance in favor of someone else. Secondly, all heirs make declarations of inheritance and jointly inherit all the property (including rights and obligations) of the deceased – in which case further development of the case is complicated by the establishment of the order of use of the shared property. Thirdly, all heirs make inheritance claims and enter into an agreement on the distribution of hereditary property – in which case, each of the heirs may receive that share of the hereditary property that interests him. It should be noted that the conclusion of such a contract must take place before the notary’s certificate of inheritance is issued.
You also need to be mindful of some of the heritage features. In the event that any of the heirs within the prescribed 6 months has not filed a notary’s application for inheritance, he shall be considered as not having accepted the inheritance. The heir who, at the time of the deceased’s death, was permanently resident with the heir shall be deemed to have inherited the inheritance if he has not declared the inheritance within the said 6 months. If the heir is unable to personally arrive at the notary public, the application for acceptance of the inheritance or cancellation thereof (signature of the heir must be certified by a notary) may be sent by notary by means of postal communication.
In court, the right of ownership of hereditary property is subject to protection by its recognition in case such a right is contested or not recognized by another person, as well as in case of loss of a document certifying his ownership (Article 392 of the Civil Code of Ukraine) and is an exceptional way. protection to be applied if there are obstacles to the registration of inheritance rights in a notarial manner, including in the case of determining by the court on the claim of the heir an additional term for the inheritance.
To date, hereditary disputes occupy a fairly large proportion of civil litigation cases. Usually, difficulties arise when resolving conflicts between heirs. Quite often, such issues are resolved in court. Settling or helping to settle a dispute between heirs is also better entrusted to a competent lawyer. A lawyer will help you identify valid reasons to justify your position. Eventually, in a dispute with the developer, provided that the house is completed and the heir does not enter into a succession agreement and the real estate is not transferred by deed, the services of a lawyer in recognizing the ownership of the property will be required.
In the case of divorce and separation of an apartment in a new building under construction, it is also important to weigh all the legal nuances. Property rights to an apartment under an investment contract are classic property under civil law. As a rule, the investment contract is concluded for the benefit of the family, which is why the property is jointly jointly owned.
Here you can also find options for a peaceful settlement of the distribution of common property and court order.
The wife and the husband may, by mutual agreement, enter into an agreement for the division of the jointly acquired property. In such an agreement, consideration should be given to the fact that the funds invested as investment in construction had the legal status of personal private property. In parallel, you must contact the developer and replace the party in the contract of sale of property rights.
The jurisprudence on this category of cases is changing and new clarifications are constantly emerging. The key points to pay attention to are the timing of the payment of the investment contract and the source of the funds (personal or joint). When settling disputes between spouses about property, it is necessary to establish the amount of jointly acquired property available at the time of termination of joint management of the farm, to find out the source and time of its acquisition. The division of property also takes into account the debts of the spouses and legal relations under obligations arising in the interests of the family. Instead, some courts do not consider property rights to be jointly joint ownership and believe that the investment contribution is not subject to jointly owned jointly owned property in the sense provided for in Articles 368, 369 of the Civil Code of Ukraine, and may be shared from the time of state registration in the future.
Please note that in some investment and real estate purchase and sale contracts, developers state that the funds paid are personal private. This is due to the fact that in order for one of the spouses to conclude agreements requiring a notarization certificate as well as contracts concerning valuable property, the consent of the other spouse must be submitted in writing. In this case, the investment contract will be concluded with the legal entity, and therefore it must be in writing, his notarization is not required by law. If, however, the investor does not require such consent from the other spouse, and the contract states that the funds paid are personal private property, then the prospects that the property acquired under such agreement is not jointly jointly owned by the spouses are sufficiently large. However, there is another jurisprudence that, when concluding contracts, one spouse is considered to be acting with the consent of the other spouse. Obviously, such a contract does not fall under the small household transaction, and the funds were made during the marriage period. The wife, the husband has the right to go to court with a claim for the invalidation of the contract as invalid, concluded by the other spouse without her, his consent. Or file a claim for joint ownership of the property rights to the apartment. Satisfaction of such a claim will be the consequence of the transfer of the apartment to the developer after the completion of construction in equal time.
The purchase of real estate from the developer is also possible through the conclusion of a notarized preliminary contract of sale. In such a case, the notary must make the notarial consent of the other spouse to conclude it. It is interesting to note that the notary must in any case receive a written statement from the person who concludes the notarial agreement, that is, even if it is personal means (for example: donated, borrowed, inherited) that must be stated in the statement remaining with the notary. The absence of such a statement may give rise to the argument in the court that the purchased property belongs to the joint property of the couple.
However, the wife and the husband have the right to divide the property that belongs to them on the right of joint joint ownership, regardless of the divorce, that is, they can conclude a marriage contract and specify in it the legal regime of property. In the event of a dispute about the division of joint joint ownership, if the in-kind allocation of the share from the joint property is not permitted by law or is impossible, the co-owner who wishes the separation has the right to receive from the other co-owners financial or other material compensation for the value of his share.
Finally, an investment contract can be entered into by purchasing registered housing bonds, under which housing can subsequently be obtained. Spouses may be jointly owned jointly by: cash, bonds and other securities. As noted earlier, the courts hold that, when resolving disputes between spouses, it is necessary to establish the volume of all jointly acquired property available at the time of termination of joint farming. The property to be divided includes the common property of the spouse available to him at the time of the case and that of third parties. As a general rule, securities (bonds) can be recognized as jointly compatible property of the spouse. However, depending on the terms of the particular bond purchase agreement and the source of the money, family law attorneys know how to move away from equity and recognize such property rights in court as private. The division of property also takes into account the debts of the spouses and legal relations under obligations arising in the interests of the family.
So, there are no legal problems that cannot be solved, but in property rights cases there are many pitfalls that lawyers can use differently. All you need to do is involve an experienced lawyer who will analyze your case and develop the most effective rights protection strategy.