Currently, there are over 1,800 active construction sites across Kyrgyzstan, according to the National Statistical Committee. Every year it is getting more difficult to Kyrgyzstanis to choose a reliable property developer due to much contradictory information available on the internet.
What is a technical passport and what is it for? What to pay attention to when choosing a property developer? CABAR.asia asked these and other questions to lawyer Fatima Yakupbaeva and real estate agent Nazar Kydyraliev.
Nazar Kydyraliev: The question is incorrect. A second-hand property is the property that has a technical passport. A new building can also be a second-hand property. In general, it’s better to choose a second-hand property, when the house was put into operation, and residents have a technical passport for the apartment.
N.K.: It’s more profitable to buy at the construction stage as the price would be cheaper, but you should buy from a good property developer, otherwise, your money could be frozen. It happens when construction works are suspended.
Fatima Yakupbaeva: In a finished house, but the price would be more expensive.
N.K.: It’s better to learn about every property developer, how many projects were built. A bad situation happens when the court seizes the property developer’s project because of some issues. And residents would have problems with selling the apartment.
F.Ya.: First, check documents of the construction firm: certificate of registration with justice authorities, license for construction (term of validity, category). Check whether the firm is registered in the database of the Ministry of Justice;
Check documents for a land plot: ‘red book’ or ‘green book’, title documents (contract of purchase and sale or deed of gift), document on repurposing of a house into a multi-storey residential building (if the house was previously registered as the individual house), payment of land taxes;
License for construction and installation works (term of validity, category);
Architectural and planning requirements is the document, which contains detailed information proving that the project meets town planning standards, fire regulations, sanitary and environmental requirements. Please note that the document is rather large.
Positive statement of the state expert board regarding the project development. This document is usually issued by a local government.
Read the contract provided by the property developer carefully. If it is the shared construction agreement, it must be notarised and registered with Gosregistr (office for land development and real estate title registration). Otherwise, the contract is considered invalid.
F.Ya.:
- Certificate of property developer’s registration with the ministry of justice;
- License for construction and installation works (check the validity date and category);
- State certificate of title to a land plot;
- Contract of purchase and sale or another document that gives the title to the property developer;
- Architectural and planning requirements;
- Engineering conditions;
- Positive statement of the state expert board;
- Permit for construction and installation works issued to the property developer (with a valid term);
- Receipts of land tax payment;
- Technical passport for the apartment (if any).
F.Ya.: He may refuse but these documents, according to the law, are not considered commercial secret. If he refuses, you should think about the property developer’s reliability.
F.Ya.: ‘Green book’ is the right to use and own a land plot, in other words, land lease. And the lease has its period. In practice, it may turn out that the land lease is valid for 5 years only. And construction works last for 3-4 years, and the land has to be purchased at the end of the lease period.
‘Red book’ is the document confirming the ownership of the land. It means that one should not renew their rights and one can dispose of the land at one’s discretion: sell it, give it as a gift, and so on. It is better to purchase property with the ‘red book’, as you automatically become the owner of not only the apartment, but also of a piece of land.
F.Ya.: To check whether the apartment is seized or under encumbrance. Because they can take a deposit for the apartment, which cannot be sold thereafter. Therefore, you should always request this certificate.
F.Ya.: Anyone can receive the certificate. It costs nearly 180 som (about 2 dollars).
F.Ya.: Not necessarily, but preferably. The lawyer studies the documents and gives assessment of legal risks. He also advises which documents to request and will provide support during the transaction.
F.Ya.: The precise address of the site, identification code (unique number of the property, consisting minimum of ten digits), time of completion of construction, quality and criteria of fine finishing, property developer’s guarantees of the courtyard improvement, penalties in case of delayed payment for the apartment and in case of delayed completion of construction.
F.Ya.: Quite safe. The most important thing is to have payment by instalments documented and permitted in writing. Upon full settlement, complete ownership passes to the new owner.
F.Ya.: Of course, payment by instalments. It is usually interest-free.
F.Ya.: If it is written in the contract, it is valid. Such barter is called in law “swap contract”.
F.Ya.: The document executed by results of technical examination of the real property unit. It contains information about the owner, floor space of the property – living space and floor area, and other data of the examination.
F.Ya.: Check if there are penalties specified in the contract for breaching the deadlines for putting the house into operation. If there are any, you have the right to demand compensation and reimbursement for delay.
If there are no penalties specified in the contract, you can apply the Civil and Housing Codes. According to the Civil Code, the law provides for a penalty at the rate of 5 per cent per annum for illegal use of someone else’s money. This norm applies if they fail to return the money that they received unreasonably.
F.Ya.: If such ‘promises’ are specified in writing in the contract, you should demand performance of the contract: send claim letter, hold negotiations. If it does not help, you can go to court.
If promises were made verbally, you have a small chance to make him keep the promise.
F.Ya.: Yes, you can lay claims to the property developer regarding the quality of finishing and construction works within two years after the conclusion of the contract of purchase and sale. First, you should write claim letters to the property developer. If they don’t respond, you should resort to the Antimonopoly Agency and the district court at the property developer’s location.