Making a notary deposit for real estate transactions

Payment mechanism via notary deposit:

the purchase and sale agreement must indicate that the parties have established a procedure for settlements through a notary's deposit;
the parties deposit funds on the basis of a mutual application to deposit funds with a notary;
the purchase and sale agreement or the application must specify the conditions under which funds are deposited with the notary;
the purchase and sale agreement or the application must indicate the conditions for the release of funds from the notary's deposit;
the purchase and sale agreement or the application must indicate the procedure for terminating the agreement if the notary specified in the agreement does not transfer the funds within the time limit;
the purchase and sale agreement or the application must indicate in what form the funds are deposited into the notary's deposit account - cash or non-cash, as well as the bank details of the parties for making payments.

What it is

The main regulatory provisions are contained in Art. 87 Basics Ab. 1 states that a notary, in cases provided for by law or agreement, has the right to accept financial assets or securities from the debtor for further transfer to the creditor.

The notary is obliged to notify the lender in the prescribed manner that the funds have been deposited. Upon first request, the money must be issued.

The rule of law regarding issuance on first demand is dispositive - that is, an agreement between the debtor and the creditor may establish a different procedure.

The notary accepts money at the place where the obligation is to be fulfilled. Simply put, at the place of registration or permanent residence of the creditor.

Recently, namely since the beginning of 2021, a novelty has been introduced into the legislation. If previously a notary’s deposit was used to securely carry out settlements between a creditor and a debtor, now in this way you can, for example, pay off with the seller of real estate or a car.

Advantages of a deposit for settlement of transactions:

the notary's activities are insured in accordance with current legislation;
the notary can additionally individually insure his risks;
insurance of the regional Notary Chamber;
the compensation fund of the FNP is 0.5 billion rubles;
the notary is liable with all his property;
the minimum costs for the parties when making payments through a notary's deposit are due to the regulation of the notary tariff by the state and this is much cheaper than renting a safe deposit box or making payments through a bank letter of credit;
huge time savings, since all functions under the purchase and sale agreement are assigned to the notary - preparation of the purchase and sale agreement, making payments, registering the transaction, monitoring compliance with all terms of the transaction and receiving the amount of money by the seller;
To store funds, notaries open special public deposit accounts through which payments are made; storing material assets in the office is prohibited;
the funds deposited by the notary belong to the person who placed them.

Notary deposit for real estate transactions

Currently, parties can use a notary deposit in real estate transactions. Most often in practice, an apartment is sold through a notary's deposit. In this case, the buyer deposits the full amount of money for the apartment into the notary's deposit, and the seller will be able to receive it from the deposit if a pre-agreed condition occurs, confirmed by an established document.

For example, in practice, the parties most often agree that the seller will be able to collect the money after state registration of the transfer of ownership of the apartment, which is confirmed by the corresponding certificate of ownership. This eliminates the risks of errors or intentional violations on the part of the seller, which may occur at the stage of state registration. In our practice, there have been several cases where the seller hastily refused a transaction for the sale of an apartment, when the buyer offered to notarize the transaction or make payment through a notary deposit. Thus, this very proposal helped him weed out potentially problematic counterparties.

The notary's activities are fully insured. Last year, the Compensation Fund of the Federal Notary Chamber (hereinafter referred to as the FNP) was created. Now citizens and organizations have four levels of guarantees:

Individual notary insurance
Insurance of the regional notary chamber
FNP Compensation Fund (it amounts to 0.5 billion rubles)
Full responsibility of the notary with all his property

This money will be enough to cover any risks and force majeure circumstances for citizens and organizations

Thus, the use of a notary’s deposit as a means of mutual settlement for transactions can significantly simplify the procedure for fulfilling an obligation and minimize possible risks.

The introduction of this norm into Russian legislation has created an opportunity for parties to almost any transaction to further protect themselves and reduce the risk of non-fulfillment of the transaction to a minimum.

Below is a sample agreement for the sale of an apartment through a notary deposit.

AGREEMENT FOR PURCHASE AND SALE OF A SHARE IN THE RIGHT OF COMMON OWNERSHIP OF AN APARTMENT

The city of Moscow , the fourth of March two thousand and fifteen .

We, gr. Ivanova Anna Ivanovna , born January 16, 1969, place of birth, citizenship: Russian Federation, gender: female, Russian passport, SNILS, registered at the address, hereinafter referred to as the SELLER, on the one hand ,

and gr. Ivanov Ivan Ivanovich , born December 17, 1969, place of birth, citizenship: Russian Federation, gender: male, Russian passport, SNILS, registered at the address, hereinafter referred to as the BUYER, on the other hand ,

Being of sound mind and sound memory, acting voluntarily, we have entered into this agreement as follows:

1. The SELLER sold to the BUYER his 30/100 (thirty hundredths) shares IN THE RIGHT OF COMMON OWNERSHIP OF THE APARTMENT, located at the address , consisting of three rooms, with a total area of 89.3 (eighty-nine point three) sq.m., of its residential - 48.6 (forty-eight point six) sq.m.

Cadastral number of the object.

2. The specified 30/100 shares in the right of common shared ownership of the apartment belong to the SELLER on the basis of a decision of the district court of Moscow, case N, a gift agreement concluded in simple written form, a purchase and sale agreement concluded in simple written form, a certificate on the state registration of rights issued by the Office of the Federal Service for State Registration, Cadastre and Cartography, about which registration entry No. was made in the Unified State Register of Rights to Real Estate and Transactions with It.

3. The cadastral value of the apartment is 14150678 (fourteen million one hundred fifty thousand six hundred seventy eight) rubles 93 kopecks, which is confirmed by the cadastral passport (extract from the state real estate cadastre) No. issued by the Federal State Budgetary Institution. The cost of the alienated share in the right of common shared ownership of the apartment is 4245203 (four million two hundred forty-five thousand two hundred three) rubles 68 kopecks.

4. The parties agreed that the value of the specified share in the right of common shared ownership of the apartment is 7,875,000 (seven million eight hundred seventy-five thousand) rubles 00 kopecks.

The calculation between the parties will be made as follows:

The BUYER deposits funds in the amount of 7,875,000 (seven million eight hundred seventy-five thousand) rubles 00 kopecks to the deposit of a notary in Moscow, full name, within three working days after signing and notarization of this agreement. Confirmation of the deposit of funds to the notary's deposit will be a certificate issued by a notary of the city of Moscow, full name.

The SELLER can withdraw funds from the deposit of a notary of the city of Moscow, full name, after state registration of the transfer of ownership upon presentation of a copy of the purchase and sale agreement for a share in the common ownership of an apartment belonging to the Seller, with the appropriate stamp or other mark of the Office of the Federal Service for State Registration, Cadastre and Cartography in Moscow, confirming the registration of the transfer of ownership.

The parties agreed that in accordance with paragraph 5 of Art. 488 of the Civil Code of the Russian Federation, the Seller’s right of pledge on the above share in the right of common shared ownership of the apartment does not arise.

5. The presence of funds on the notary’s deposit in the amount of 7,875,000.00 (Seven million eight hundred seventy-five thousand) rubles contributed by the Buyer is an essential condition of this agreement. If these funds are not on the notary's deposit on the date of their transfer to the Seller due to the Buyer's fault, or for any reason directly or indirectly related to the Buyer, this Agreement is terminated by a court decision with the Parties returning everything performed (received) under this Agreement.

6. The notary explained to the parties that the agreement on the price is an essential condition of this agreement and, if they conceal the true price of the share in the common ownership of the apartment and the true intentions, they independently bear the risk of declaring the transaction invalid, as well as the risk of other negative consequences.

7. The SELLER guarantees that he does not enter into this agreement as a result of a combination of difficult circumstances on extremely unfavorable conditions for himself and this agreement is not an enslaving deal for him.

8. The Buyer acquires ownership of the shares being sold after state registration of the transfer of ownership of them to the Buyer.

9. Termination of this Agreement, either by agreement of the Parties or by a court decision, entails the mandatory return by the Parties of everything performed (received) under it at the time of termination.

10. The transfer of ownership of the share in the right of common shared ownership of the Apartment sold in accordance with this agreement is subject to state registration in the Office of the Federal Service for State Registration, Cadastre and Cartography in Moscow.

14. The contents of Articles 167, 209, 223, 288, 292 and 556 of the Civil Code of the Russian Federation were explained to the parties by the notary.

15. All expenses for payment of notarial services associated with the conclusion, notarization of this Agreement, and registration of the transfer of ownership of the Share being sold, as well as the notarial deposit, are borne by the Seller.

16. The Seller confirms that the share (or parts thereof) sold to the Buyer has not been sold, gifted, pledged, is not in dispute or under arrest (ban).

17. The Buyer declares that at the time of signing this Agreement and transferring money, he is not in a registered marriage.

18. The Seller declares that at the time of signing this Agreement and transferring money, he is not in a registered marriage.

19. The parties confirm that they are not deprived of legal capacity, are not under guardianship or guardianship, do not suffer from diseases that prevent them from understanding the essence of the Agreement, and there are no circumstances forcing them to enter into the Agreement on extremely unfavorable conditions for themselves.

20. The Agreement contains the entire scope of agreements between the Parties regarding the subject of the Agreement, cancels and invalidates all other obligations and agreements both between each of the Buyers and the Seller, and between the Sellers that contradict the Agreement.

21. This agreement is drawn up in three copies, one of which is kept in the files of the notary of the city of Moscow, full name, and a copy is issued to Anna Ivanovna Ivanova and Ivan Ivanovich Ivanov.

The contents of this agreement were read aloud to its participants.

salesman________________________________________________

buyer______________________________________________

Moscow city.

The fourth of March two thousand fifteen.

This agreement is certified by me, full name, a notary of the city of Moscow.

The agreement was signed by the parties in my presence. The identity of the parties has been established, their legal capacity, as well as their affiliation with the group. Anna Ivanovna Ivanova's alienable share in the right of common ownership of the apartment has been verified.

This agreement is subject to state registration in the Office of the Federal Service for State Registration, Cadastre and Cartography in Moscow.

Registered in the register under No.

Charged according to the tariff: RUB 28,750. 00 kop.

Notary Public Full Name

How to complete a transaction through a notary deposit

The seller and buyer jointly sign a statement on the procedure for settlements and depositing funds with the notary.
The buyer deposits funds into the deposit account in cash or transfers funds in non-cash form before or after signing the purchase and sale agreement.
After funds are received into the deposit account, the notary issues the buyer a receipt for the deposit of funds.
After signing the purchase and sale agreement and depositing funds with the notary, the notary, as a rule, independently submits documents for registration of the transaction to Rosreestr.
After receiving the registration documents, the notary transfers funds to the Seller’s bank account in accordance with the terms of the purchase and sale agreement.

Legal basis

So, the notary's deposit has a strong legal position. First of all, this is due to the clear and complete legal foundations laid down in the legislation.

The debtor, like the creditor, has a limited list of rights that they can use only in cases provided for by law.

Let us note that the law clearly establishes a list of circumstances under which the use of a notarial deposit is possible. In other words, it will not be possible to deposit money “just like that” and at the same time be considered to have fulfilled the obligation.

List of circumstances under which the debtor acquires the right to deposit sums of money into a notarial deposit:

the location of the creditor is unknown;
the creditor is declared incompetent, and the legal representative of such a person is absent;
inability to accurately identify the person who must accept the execution;
the creditor refuses to accept performance.

The above circumstances give the debtor the right to deposit funds, unless otherwise established by agreement of the parties.

The agreement may indicate any other circumstance upon the occurrence of which the debtor is obliged to repay the debt through a notarial deposit.

Important! After the debtor has deposited funds with the notary, he is considered to have fulfilled the obligation.

This allows you to avoid the accrual of fines, penalties or delays, if such were provided for by agreement of the parties.