What is construction in progress? In times of unstable economy, a number of objects being built under construction contracts are "frozen" at the construction stage. This happens for various reasons - lack of finance or building materials, etc. In such situations, we can talk about construction in progress.
Unfinished Construction - Definition
What are these objects? The current legislation does not contain a direct definition of this term. The Civil Code of the Russian Federation in its article number 130 (part 1) refers to real estate (real estate) everything that is connected with land (subsoil, land plots, etc.). The main feature of an immovable object is that it cannot be moved without causing disproportionate damage to its purpose. This also includes erected buildings and those very "incomplete" objects that will be discussed. There is only one conclusion - the currentthe legislation unequivocally classifies "work in progress" as real estate.
Thus, the Urban Planning Code of the Russian Federation interprets the concept of such an object as a building (or structure, structure), the construction process of which has not been completed. This does not include temporary buildings - we are talking about kiosks, sheds, etc. Judicial practice shows that in specific disputes, judges have to refer to the legal status of objects under construction, that is, their legal regime.
For example, if there is an already erected foundation with the walls of a building on a land plot, then it is impossible to move this object without causing disproportionate damage to it. This, by definition, refers to real estate. Conclusion: when determining the status of a disputed object, the court first of all takes into account its essential physical properties, and only then - the presence or absence of state registration of rights to it.
It's not that simple
At the same time, the judicial practice is full of disputes on this issue. The range of opinions on this issue is very wide. Some jurists consider as an object of construction in progress any building that is in the process of reconstruction or construction, yet does not have a permit for commissioning. This definition does not take into account the important circumstance that the process of building an object can sometimes be stopped or mothballed for a variety of reasons.
Based on the latest definition, these properties are alreadycannot be called examples of unfinished construction. At the same time, they cannot be attributed to the totality of building materials, since some of them, being used in construction, have lost their original properties.
Article number 219 of the Civil Code of the Russian Federation states that the right of ownership must be registered, including for newly created property, which can be classified as real estate. It is under this definition that objects "in progress" fall.
How to recognize "incomplete"?
Let's consider the basic requirements for an object under construction:
- Having a strong connection with the piece of land on which the object is being built (with the above impossibility of moving without causing damage).
- Individual object assignment.
- Presence of the fact of suspension, conservation or final termination of the process of construction of this building (structure).
Let's make a final decision: such an object can mean a certain unit of real estate, construction work on which has been stopped, suspended or mothballed.
Recognition of ownership of an object under construction
If previously such legislation was considered in the form of a set of building materials together with the invested labor and did not relate to the subjects of civil law transactions, then with the amendments to the Civil Code of the Russian Federation (in its article number 130) they were included in the list of things related to real estate. On the initial state registration of an object in progressconstruction, according to one of the most common points of view, one should speak from the moment of termination of the contract in respect of it.
It is this approach that most often prevails in the existing judicial practice. In the new version of the law, the registration of ownership rights to such objects is no longer conditioned by the need to make certain transactions with them. What is the conclusion from this? The degree of readiness of such an object refers only to descriptive criteria. After the implementation of the state registration procedure in accordance with the procedure established by law, such a building can legally be classified as an object of civil law with all the ensuing consequences.
That is, we can talk about the emergence of a completely new, integral and independent legal object. The rights to an object of construction in progress are registered by administrative procedure on the basis of a list of certain documents. In addition, such a right may be recognized by a court decision.
Legislative subtleties
Such cases refer to arbitration and courts of general jurisdiction. The most difficult issue in this category of disputes is to whom exactly to give the right of ownership - to the investor, customer or contractor. In this situation, there are many contradictions and legal nuances. When considering this category of cases, a number of documents are accepted as evidence, containing confirmation of ownership of a plot of land, the availability of a building permit, a set of design andother documentation for a capital construction facility, etc.
Unfortunately, the legal norms in this area of relations contain a number of contradictions, and therefore the legislation in this part can be interpreted in a fairly broad sense. This leads to abuse by various stakeholders. It should be mentioned that these legal relations need additional more detailed regulation in order to eliminate existing gaps in legal acts and achieve unity in existing judicial practice.
Let's talk about the unfinished lot
To be able to register an unfinished construction, the land plot where it is being carried out must be owned, leased, or its owner must have the right of inherited lifetime possession or perpetual use. According to the definition (recall, real estate includes everything that is firmly connected to the land and cannot be moved without causing disproportionate damage to the object), it follows that the possession of a capital foundation is an indispensable requirement for an object that claims such a title.
An object under construction, by definition, cannot be the subject of a contract of such a contract, the validity of which has not been terminated. Otherwise (Civil Code of the Russian Federation, article number 740), the contractor continues to have the right to continue work, that is, the rights of so-called third parties will take place. As law number 122-FZ states in its article number 25, the ownership of such unfinished constructionimpossible without a building permit, a project with a detailed description of the object and documents regulating the rights to a plot of land.
If all of the above conditions are met, the owner of the "in progress" has every reason to issue a capital construction object in the property. Until they are registered, any transaction related to the object will not be considered valid by law.
Another important point is to correctly formalize the right to the land plot that is occupied by "unfinished". Article number 222 of the Civil Code of the Russian Federation states that if real estate was built on a land plot not intended for this purpose, then it receives the status of unauthorized construction. Acquiring the right of ownership to such in this case is impossible, and the erected object is subject to demolition.
What documents are required for registration of construction in progress?
The package of necessary papers consists of:
- Application for registration of an object under construction (ownership rights to it).
- Identification document.
- Receipts for payment of state duty.
- Documents for a piece of land - evidence of ownership or lease agreement.
- Permits from relevant authorities to build on this particular site.
- Description received from the BTI authorities (technical plan of the construction in progress).
The entire package of documents is submitted to the registration chamber.
How aretransactions with such objects?
As already mentioned, a properly executed object of "work in progress" is considered real estate. That is why any transaction for the purchase or sale of construction in progress is similar to a transaction with any other real estate. A buyer wishing to purchase a "work in progress" should pay attention to the following points:
- availability of documents confirming the registration of the object;
- the presence of the decision of the authorities on the allocation of land for construction;
- the plan of the above-mentioned object of construction in progress;
- availability of all required documentation (technical and design estimates);
- documents that confirm the termination of the contract for the construction of the facility.
All data with the characteristics of the property, including its location on the territory of the site, must be indicated in the contract for the sale of real estate.
A similar agreement is drawn up according to a strictly defined model, which is obliged to be observed by all participants in the transaction.
Features of drawing up a contract for the sale of "incomplete"
- It must be drawn up in writing with state registration. If the form of the contract is not observed, this leads to its invalidity.
- As with any transaction, the details of the parties to the contract must be indicated - with passport data, residential addresses, etc.
- The subject of the contract must be clearly defined, that is, the data contained in itshould allow to establish with accuracy the sale of which particular object is in question. Such data primarily includes the address at which the building is located.
It is necessary to take into account that there are both "construction" and "postal" addresses. The "construction" address is indicated in the building permit and determines the place where the site for the construction of the object is provided. The "postal" address may not match it. It can be assigned to the house only after the completion of the acceptance commission. Such discrepancies should be taken into account when drawing up documentation for the planned acquisition.
Among other things, the price of the object must be indicated.
Must be listed in detail the range of persons with the right to use.
The rights to the property sold by third parties must be respected. When making a transaction, it is the seller's responsibility to notify the buyer about this. We can talk about the rights of tenants, tenants, existing collateral or lifetime use. In case of failure to fulfill such obligations, the buyer has the right to demand a reduction in the sale price or complete termination of the contract with compensation for all losses.
The final transfer of real estate between the seller and the buyer with its acceptance by the latter takes place at the time the parties sign the so-called. deed of transfer.
Which objects are considered unauthorized buildings?
According to the law, any buildings, structures, houses,erected on plots of land not allocated for these purposes, created without permits obtained for that, built with a significant violation of urban planning and other norms and rules. If at least one of the signs indicated above is present, the structure is classified as unauthorized construction. Acquisition of ownership of it is impossible except in the case of a decision to this effect by a judicial authority.
What documents confirm the end of the construction contract?
They can be:
- Agreement of the parties or a court decision to terminate such an agreement.
- Act of acceptance and delivery of the facility upon completion by the contractor of a certain stage of work, together with an agreement to suspend the further operation of the contract.
- Other documents on the termination of contractual relations in a legal way (we can talk about the impossibility of performance, liquidation of the contractor, etc.)
If the construction of a real estate object was carried out by several persons, a simple partnership agreement could be concluded between all participants in the construction. In this case, we are talking about common shared ownership of the specified object. In the case of attracting financial resources from investors by the developer, we are talking about the failure of the customer to fulfill the obligations of the customer to investors due to the impossibility of completing the construction. Then the rights to a specific part of the object do not arise from investors.
How to make a residential building "unfinished"?
If you want to formalize your object of construction in progress (residential building)Thus, you should visit the address where the territorial department of urban planning and architecture is located. Do not forget to take a package of documents with you, consisting of:
- Statements of registration or commissioning.
- Passport (other identification document).
- Necessary documents for land.
- All necessary permits and approvals for the development of this site.
- The project for the construction of your cottage.
- Specifications regarding the provision of the facility with utilities.
- Receipts for payment of state duty.
- Cadastral passport for your building.
The latter contains brief information about the house under construction with a graphic plan of the territory. Such a document must necessarily include a cadastral passport of the site on which the house is located. If the house is sold without such a passport, the transaction will not be carried out. In this case, a technical passport for an unfinished construction object is not required, but as an annex to the cadastral passport, there must be a technical plan for any house, even unfinished.
What to do if documents are missing?
If you try hard, it is possible to draw up an "incomplete" even in the absence of the necessary papers. In this situation, you should act as if the construction of the cottage is just beginning. The step-by-step action plan consists of:
- Writing an application for all necessarypermits, without which you will be just an unauthorized developer.
- Place an order for a finished house project, similar to the one erected, with its mandatory approval.
- Drafting a technical plan of the building together with a representative of the BTI.
- Order at the Cadastral Chamber of the object's passport.
With the entire package of documents collected, you should go through the registration procedure in the department of architecture and urban planning.
As an alternative, it is possible to write to the BTI authorities an application for the registration by the employees of the bureau of the object - your unfinished house. This is a rather costly option, but it saves you time and nerves.
If we are talking about an unfinished dacha, the package of documents is somewhat simplified - you can not present a building permit and limit yourself to a cadastral plan. In the case of the construction of a cottage or a residential country house, the package of documents must be complete.
It is possible to facilitate the execution of all necessary papers in the case of ordering or purchasing a standard project of a residential cottage from a trusted construction company.
How is construction in progress transferred?
As in the case of a completed object, the transfer is made by drawing up and signing the appropriate act, called the transfer-acceptance certificate. When it comes to construction in progress, requiring completion or completion of certain works (for example, finishing), the entire composition of such imperfections must be reflected in the contract signed at the time of acceptance.
Based onof the approved acceptance certificate, the work performed under the terms of the contract can be finally paid.
About the rights to "work in progress"
It's no secret that in recent years and decades the situation on the construction market has been economically unstable. In this case, of all types of construction in progress, we are talking about non-commercial real estate, that is, housing. Numerous cases from practice show that very, very often, in the presence of financial problems, developers try to delay the process of transferring actually constructed premises to equity holders. Sometimes they choose to go bankrupt altogether.
What should a shareholder do to protect their own legitimate interests? In such a situation, the opportunity to recognize his ownership of the property that is part of the object of construction in progress (share) will come to the rescue. To do this, go to court.
When collecting documents for filing a claim against a developer that has not fulfilled its obligations, a number of points should be taken into account:
- Such categories of cases are considered by the courts at the location (territorially) of the shared construction object in question.
- Implies actually completed, but not put into operation object. If the developer is playing for time (that is, we are talking about a delay in the performance of his own obligations), this circumstance cannot serve as the basis for a judicial appeal with the aim ofrecognition of the shareholder's ownership of the object.
Sometimes in judicial practice there are (as an exception) examples when the ownership of a share of an object was recognized when the degree of readiness of an object under construction was from 75%. But these cases can be regarded rather as an exception. The probability of obtaining a satisfactory court decision is high in the case when the degree of completion of the building under construction is 90% or higher. Moreover, providing the court with evidence of the readiness of the house is the direct concern of the equity holder (plaintiff).
Also:
- In his statement of claim, the shareholder cannot demand recognition of ownership of the entire object of the "work in progress". His right is to claim only a proportionate part of the object, indicated in the contract concluded with the developer. Often, legally illiterate equity holders draw up a claim for recognition of ownership of an "apartment", "garage" or "car space". It should be clarified here that until a unit of shared construction is officially put into operation, in the legal sense it cannot be regarded as a full-fledged real estate.
- The emergence of this ownership right is possible only for an object that is available, the location within the object under construction (building, house) of which can be clearly identified. This is done based on the terms of the contract and the available project documentation.
- The shareholder has the right to go to court with such a claim only in the event of fullfulfillment of own obligations under the contract with the developer in terms of payment.
In the event of bankruptcy proceedings against the developer, recognition of such a right to an apartment or other unit of shared construction is possible only when permission is available to put it into operation, and the parties signed a deed of transfer before the date when the arbitration court filed for bankruptcy.
