To choose a reliable developer, you need to check land documents, building permits and find out how the project will be financed. To check reliability, you can use questions from our expert - Alexey Shilov, head of the sales group of the Nekrasovka Quarter project.

You can copy the questions and take them to your meeting with the developer:

• Do you have bank accreditation?
• How many houses have you already built?
• How is construction financed?
• Where can I see land documents?
• Can I see your financial statements?
• Do you have a conclusion on compliance with the requirements of 214-FZ?
• Will we be able to use the secure payment service?
• Will my money be held in escrow accounts?
• What will we do if the deadline is delayed?
• What will be built nearby in the next five years?

Here are the answer options that should suit or alarm you.

Do you have bank accreditation?

To build and deliver houses, the developer must have documents: a construction permit, an ownership or land lease agreement and a project declaration.

For verification, you can ask to see these documents, but it is better to ask about accreditation with banks - this is the banks’ assessment of the likelihood that the developer will deliver the house on time. Before accreditation, banks check the reputation and documents of the company, visit the construction site, and then monitor the progress of construction. If something does not go according to plan, accreditation will be revoked.

Accreditation can be checked on the bank’s website in the “Accredited New Buildings” section.

Accredited new buildings of Sberbank on the Domklik website

If a developer says that he has accreditation, but is not on the bank’s lists, this is a reason to be wary.

But even developers accredited by all banks may turn out to be unreliable, so it’s worth asking the following question.

Buy and not make a mistake: what questions to ask the developer before the transaction

There are such examples on the market. So, in 2021, it launched its first project, owned by Zenit club football player Viktor Faizulin. In this case, you need to understand that the name of the owner will not tell you anything about the quality of the future project - you need to dig deeper, find out about the team and contractors of the project. True, the likelihood that the house will be built is quite high, because public figures do not need an extra reason to get involved in scandals.

During the construction process, the initially stated area of ​​the apartment may be slightly adjusted. As a rule, the difference turns out to be insignificant - about 1-2 meters in one direction or the other. The solution to this issue should be specified in the agreement with the developer. If the area of ​​the apartment has decreased, the developer must compensate for this, and if it has increased, then the buyer usually pays for it. In any case, it is worth paying special attention to this point and agreeing on a price “on shore”.

How many houses have you already built?

The likelihood that a company will complete construction of a house without any problems is higher if it has already built and commissioned several residential complexes. Of course, the developer’s first home can also be problem-free, but companies with a reputation are more reliable.

After the answer, it’s worth checking the developer and googling something like this: LCD “Lyubov” problems, LCD “Votvaga” shareholders, LCD “Nadezhda” cons.

How is construction financed?

You need to find out whether the developer uses escrow accounts or direct financing. An escrow account is an account in which the money of shareholders is stored, and the developer can receive it only after putting the house into operation. Such accounts protect against long-term construction and fraud.

If the developer received a building permit before July 2019, that is, before the escrow account law was passed, he will use direct financing. Then you need to ask whether the developer makes contributions to the compensation fund for each transaction. If not, the apartment transaction will not be registered with Rosreestr.

What questions to ask when buying an apartment in a new building or on the secondary market

• it turned out that the apartment had been purchased quite recently and was quickly put up for sale, or had been resold many times over the past few years;
• the apartment is sold on the basis of a power of attorney, even notarized;
• the seller intends to use an alternative deal, but has too unrealistic plans for purchasing a new home;
• the apartment was recently inherited;
• the seller himself is not reliable (for example, he appears in lawsuits or may be recognized as a person who is not always aware of his actions);
• the apartment is under encumbrance or is the subject of a legal dispute;
• housing without obvious significant deficiencies is offered at a clearly reduced price, much lower than the market value.

We recommend reading: Why You Need Spouse's Consent to Buy an Apartment

It is important to deal with the home owners, and not with their relatives or outside help. If trusted persons act on behalf of the owner, it is necessary, firstly, to ask for a notarized power of attorney, and secondly, to ask for the contact information of the owner of the property, but if you have a choice, it is still better to buy an apartment directly from the owners. When there are several owners, you need to ask whether everyone will agree. If there are minors registered in the apartment, it is worth finding out whether the issue of sale has been agreed upon with the guardianship service.

How can I monitor the progress of construction?

The developer must have a construction schedule with stages and deadlines, which can be viewed by any buyer. Typically, graphs and photo reports are posted on websites in sections like “Construction Progress.”

Photo from the section “Progress of construction”, Airplane, residential complex “Sputnik”

You need to ask the developer how you can monitor the construction.

Even if the site has a schedule and reports, it is worth checking how often they are updated and whether the work matches the schedule. On average, two years pass from the start of construction to the issuance of keys, and the normal pace of construction is 2–3 floors per month. If, according to reports, the developer builds one floor at a time every six months, it is better not to contact him.

Buying an apartment in a new building: instructions, rules for completing the transaction, risks

Art. 20 Federal Law No. 214 determines what documents are needed when purchasing a new building. Conventionally, they can be divided into two groups: those that the developer must and can provide to the buyer. In the first case, their list consists of papers that are necessary to attract funds from private individuals. They are usually freely available and posted on company websites. The second group assumes the possibility of providing documents upon request; their disclosure is not established by law.

Buying an apartment from the developer itself is the most successful and cheapest option. The lowest price for real estate is precisely at the beginning of construction; as the house is ready, it increases, and it becomes difficult to purchase an apartment directly without the participation of intermediaries.

Can I see the land documents?

The land plot on which the house will be built may be owned by the developer or leased. In any case, land documents must be publicly available.

If the land is owned, the website will have an extract from the Unified State Register of Real Estate, in it you can find the cadastral number and check the boundaries of the plot using the Rosreestr map.

We find land documents on the developer’s website

We copy the cadastral number from the USRN extract

We insert the number into the search bar on the public cadastral map of Rosreestr and check the boundaries of the site

If the land is leased, you need to look at the lease agreement, and in it - the boundaries of the site, lease term and purpose. It should say something like: lands of populated areas, type of permitted use - placement of mid-rise and high-rise residential buildings.

After this, on the Dom.rf website you need to check whether the developer is on the lists, his details, the availability of project declarations and reports. Here you can check the documents and construction progress for each house.

You can check the developer and projects on the Dom.rf website

The right questions to ask the developer

The developer's website should contain most of the information you need. For example, about large state-owned partner banks lending to the project and accreditation of the mortgage facility itself with them. This provides an additional guarantee that the object will be completed in any case. The project declaration of the complex must be posted on the website - if this is not the case, it is better not to get involved with such an object.

To prevent this from happening, ask the manager to guide you through the layout of the house, specify where the windows of your apartment will face, and also try to find out what the plans are for the development of this location; by the way, this information can also be obtained from the district administration.

Can I see your financial statements?

Financial statements provide information about a company's revenue, net income, and debt.

You need to look at the numbers in the “Net profit” line and compare it with the “Debt load” line. The profit indicator must exceed the debt indicator. It happens that large and reliable developers have debts - this is normal, you need to ask what these debts are and whether they affect the sustainability of the company.

Will my money be held in escrow accounts?

Starting from 2021, developers receive money from shareholders not directly, but from an escrow account and only after the first apartment in the building is delivered. This is how the law protects buyers: if something goes wrong, they will get their money back, and the developer will not be able to say that there is no money.

You can also ask which bank holds the escrow account. And then ask the bank if it is possible to open an escrow account by proxy - there is such an opportunity, and if the bank says that it is not possible, this will mean that it still has little experience and the transaction may be delayed.

Questions when buying an apartment

Whatever the apartment is (without finishing, with rough finishing or municipal), it can be made with high quality or poor quality. If what you saw is not what you expected (and what the developer promised), you are not obliged to accept the apartment in the form in which it is offered to you. If there are justified claims, confirmed by SNiPs and GOSTs, promises of the developer specified in the contract, then the future owner of the apartment has the right to draw up a report on deficiencies, which indicates all the claims. And until they are eliminated, the acceptance certificate is not signed.

The law establishes a five-year warranty period for a shared construction project. At the same time, as lawyers say, if a shared construction project is built with deviations from the terms of the contract, leading to a deterioration in its quality, or with other shortcomings that make it unsuitable for the use specified in the contract, the shareholder (unless otherwise established by the contract) has the right to choose require from the developer:

We recommend reading: Documents of gift for an apartment

Will we be able to use the secure payment service?

The secure payment service protects the seller and the buyer. The buyer transfers money to a special bank account, and the seller receives it only after registering the transaction with Rosreestr. While the documents are being drawn up, the money is in the bank and does not belong to either party.

Safe payments will scare away those who did not actually plan to complete the transaction.

Moreover, if the buyer transfers money to the developer directly before registering the transaction with Rosreestr, the developer may receive a fine of up to 1 million rubles. A company that does business in a whitewash will not take such risks.

What will we do if the deadline is delayed?

The contract contains an exact date for putting the house into operation, but construction is a large-scale project, so the time frame may take longer. For delays, buyers have the right to receive a penalty, but sometimes developers offer to sign an agreement to extend the deadlines in order not to pay.

But in any case, the penalty will have to be obtained through the court.

What will be built nearby in the next five years?

It is important for residents of houses that a school, kindergarten, park or hospital be built nearby, but for some developers it is more profitable to build another high-rise building. Therefore, it is better to find out in advance what plans the company has for the nearby territory.

You can check the developer’s promises at the city or district municipality. One must ask whether a school is actually planned on such and such a plot of land.

Ask the Airplane

The Samolet Group builds residential complexes with kindergartens, shops and playgrounds and is happy to answer all customer questions.
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