Real Estate In Economic Crisis

VK: What are the legal issues you think are faced building company during the economic crisis? YK: At this time, significantly increased risks for developers, especially for those who build apartment buildings. The risks mainly developers associated with early termination of contracts with investment on the initiative of investors. Therefore, developers are suffering, how to invest the amount of funds received, and in the amount of the penalty – a contract or by law. This risk stems from the fact that predicted a significant fall in house prices, resulting in a refund of real estate investors is more profitable because of its overvalued. K Unfortunately, in most contracts for the construction was not provided for changing conditions in connection with the crisis: in the main agreements were concluded with a position of strength builders. VK: What do you think the main legal risks to developers in terms of the present crisis? EK: First of all, the risks may be associated with the violation of land legislation. Currently some companies to reduce costs are beginning to construction, without a required permit.

In the future it may be that the land allocated for the construction company, was granted the administration in violation of applicable legislation. Construction companies can come up with another situation. Signing the contract of land lease, the developer prepares a site for construction and if necessary, demolish dilapidated buildings. In this case the developer may find the material claims of third parties as to the adoption of the Federal Law registration of real estate held at the BTI and the Land sites – the land committee.