Duties of the parties
Only one obligation follows from the preliminary agreement - each party undertakes to enter into a main agreement in the future. (Here, for convenience, we consider the option of buying and selling).
After signing the preliminary contract, the buyer does not have any rights to the purchased item. The seller remains its owner. Moreover, this agreement also does not imply the obligation to transfer the item to the buyer.
It follows from this that until the main purchase and sale agreement is concluded, the seller has the right to dispose of the item at his own discretion. Including selling it to others. Therefore, the buyer can only hope for the seller’s good faith and that by the appointed time he will be able to dispose of it, selling it to this particular buyer.
The problem of registration by the developer
There are situations when the developer has to wait years for the registration of ownership rights. This could be due to various reasons. For example, difficulties with preparing and signing technical documentation. But citizens, as a rule, do not care about these reasons. And they shouldn't worry. Co-investors want to receive ownership of the apartment they paid for. And nothing more.
There is a way out of the situation. It is possible to realize recognition of ownership rights under a preliminary agreement in court.
Failure to fulfill an obligation
As we have already defined above, according to the preliminary agreement, the parties are obliged to conclude the main agreement. Nothing more.
What happens if the main contract is not concluded by the deadline specified in the contract? It depends on the reason.
If none of the parties has made an offer to the other party to conclude the main contract before the specified period, the obligations are terminated.
If one of the parties came up with such a proposal, and the other avoided signing the main agreement, the first has the right to go to court and, with the help of a court decision, oblige the intractable counterparty to formalize the transaction. However, this option will only be successful if by this time there is something to agree on. We remind you that the desired item may no longer be owned by the seller.
An important point: the subject of the main agreement and its other essential terms must be set out as clearly as possible in the preliminary agreement. Otherwise, the conclusion of the main agreement may be impossible either in court or out of court. It can be recommended that the draft of the future agreement be made an annex to the preliminary agreement.
Features of the preliminary agreement
Art. 429 of the Civil Code defines such an agreement as an agreement on the transfer of any property, in the situation described - an apartment, in the future.
The nuances are:
- During a preliminary transaction, the contract simply must include a description of the object and other important points.
- The preliminary agreement contains the conditions that in the future the main agreement for the transfer of the property for money will be concluded. It is the main contract that appears to be the basis on which ownership can be registered. Looking ahead, we note that this is not entirely true.
- Signing the main contract is possible only when the developer formalizes his ownership. This is logical: the developer cannot transfer ownership to third parties of an object that does not officially belong to him.
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Security payments and other guarantees
With such simplicity of the stated legal structure, the parties, of course, want to somehow protect themselves. Neither the seller nor the buyer is interested in waiting in vain for the main contract without sufficient confidence that one will be executed.
Therefore, the preliminary agreement most often provides for some way to ensure the fulfillment of the obligations stipulated in it. Let's look at the most common options.
Security (guarantee) payment
The buyer transfers a certain amount to the seller as payment under the main contract. If in the end the buyer evades the seller's offer to conclude the main contract, this payment will remain with the seller. If the seller evades or neither party expresses a desire to complete the transaction, the payment must be returned.
Deposit
The peculiarity of the deposit is that the party who received it (in this case, the seller) and did not fulfill the obligation (did not enter into the main contract) is obliged to return the deposit in double amount (we discussed the differences between a deposit and an advance payment here).
If the buyer evades concluding the main contract, the deposit will remain with the seller.
If neither party expresses an intention to sign the main agreement, the deposit will be returned in a single amount.
Finally, if the contract is concluded, the deposit will be counted towards the cost of the purchased goods.
Penalty
As an additional guarantee for the buyer, a penalty (fine) can be prescribed in the preliminary agreement - for the seller’s delay in returning the security deposit, for the delay in signing the main agreement, or for the seller’s refusal to sign it.
By the way, if the future agreement is subject to the legislation on the protection of consumer rights, then for claims for the return of funds received under the preliminary agreement, the penalty provided for in paragraph 5 of Article 28 of the Law on the Protection of Consumer Rights, as well as penalties, will be applied.
Article 429 of the Civil Code of the Russian Federation. Preliminary agreement (current version)
1. The essence of the preliminary agreement, which is discussed in paragraph 1 of the commented article and which must necessarily precede the main one, is that the parties undertake in the future to enter into an agreement on the transfer of property, the performance of work or the provision of services (the main agreement) based on the preliminary contract terms. A preliminary agreement can be concluded both between legal entities and between citizens.
“The Law on the Protection of Consumer Rights also applies to the relations of the parties to a preliminary agreement (Article 429 of the Civil Code), under the terms of which a citizen actually expresses his intention to order or purchase in the future goods (work, services) exclusively for personal, family, household, and other needs not related to business activities” (clause 4 of the Resolution of the Plenum of the Supreme Court of the Russian Federation dated June 28, 2012 No. 17 “On the consideration by courts of civil cases in disputes regarding the protection of consumer rights”).
By agreement of the parties, unless otherwise provided by law, the fulfillment of the obligation to conclude the main agreement on the terms provided for in the preliminary agreement may be secured by a deposit (see commentary to Part 4 of Article 380 of the Civil Code of the Russian Federation).
2. The preliminary agreement in accordance with paragraph 2 of the commented article is concluded in the form established for the main agreement. For example, if the main agreement for the purchase and sale of a residential building must be notarized, then the preliminary agreement must also be notarized. If the form of the main agreement is not established, the preliminary agreement is concluded in writing. Failure to comply with the rules on the form of the preliminary agreement entails its nullity.
3. According to paragraph 3 of Art. 429 of the Civil Code, a preliminary agreement must contain conditions allowing to establish the subject matter, as well as the conditions of the main agreement, regarding which, at the request of one of the parties, an agreement must be reached when concluding a preliminary agreement.
The preliminary agreement must indicate the name of the main agreement to be concluded, its parties (for example: “The parties agreed to the following terms of the main sale and purchase agreement. Joint stock company X undertakes to act as a seller, and limited liability company Y as a buyer ") and the subject of the main agreement. So, if this is a loan agreement, the subject of the preliminary agreement will be the size of the loan amount; if we are talking about an agency agreement, then it is necessary to indicate the nature of the legal actions being entrusted, etc.
From 06/01/2015, in accordance with Federal Law dated 03/08/2015 N 42-FZ, it is possible to include in the preliminary agreement not all the essential terms of the main agreement, but only some of them: a condition on its subject and the conditions under which, when concluding a preliminary agreement upon application an agreement must be reached by one of the parties.
4. The preliminary agreement usually indicates the period during which the parties undertake to conclude the main agreement (for methods of determining and calculating terms, see Chapter 11 of the Civil Code). If such a period is not specified, it is considered that the parties have established a period of one year for concluding the main agreement.
5. Situations are possible when one of the parties who entered into a preliminary agreement avoids concluding the main agreement. In such cases, the other party, in accordance with the provisions of paragraph 4 of Art. 445 (see commentary to it) has the right to go to court with a demand to compel him to conclude an agreement. The requirement to compel the conclusion of the main contract can be made within six months from the date of failure to fulfill the obligation to conclude the contract (paragraph 1, clause 5 of the commented article).
A party who unreasonably evades, in the opinion of the court, from concluding the main contract must compensate the other party for the losses caused by this. The amount of damages is proven by the injured party. Losses include actual damage (expenses that have already been made or will be made to restore the violated right, loss or damage to property), as well as lost profits (lost income that the victim could have received under normal conditions of civil circulation, if his right had not been violated ).
If the terms of the preliminary agreement were not formulated clearly enough and the parties had disagreements regarding the terms of the main agreement, then such terms are determined in accordance with the court decision. The main agreement in this case is considered concluded from the moment the court decision enters into legal force or from the moment specified in the court decision (paragraph 2, paragraph 5 of the commented article).
6. According to the general rule set out in paragraph 6 of the commented article, the preliminary agreement terminates if, before the end of the period within which the parties must conclude the main agreement, it is not concluded or one of the parties does not send the other party an offer to conclude this agreement.
In addition, it is also terminated on the general grounds of termination of obligations.
Comment source:
“CIVIL CODE OF THE RUSSIAN FEDERATION. PART ONE. ARTICLE-BY-ARTICLE COMMENT"
S.P. Grishaev, T.V. Bogacheva, Yu.P. Sweet, 2019
Mandatory notarial form of preliminary agreement?
So much has already been said about scams with preliminary contracts... In 2021, I had a hard time collecting all the schemes that I came across that relate to preliminary transactions. Here they are, all ten of them are here. As funny as it may seem, in 2021 the eleventh combination has emerged.
The owner of a 1/2 share in the right to an apartment signed a preliminary agreement, accepted a large deposit and is now avoiding the main transaction.
Doesn't return money. He shouts that the preliminary agreement for the purchase and sale of a share is subject to notarization, and that without notarization the agreement is void. According to the logic of this seller, the court will not be able to oblige him to sell his share. The swindler plans to pay the seven-figure deposit from his pension. The situation is doubly unpleasant because the buyer is the daughter of the defendant, and the owner of the other 1/2 share.
Well, what can I say... On the one hand, since the summer of 2021 the situation in legal regulation has really changed, on the other hand, we have already gone through all this. Such disputes have already happened, they just did not concern real estate. This is what immediately comes to mind. Paragraph 1 of clause 11 of Article 21 of the Federal Law of 02/08/1998 “On Limited Liability Companies” has long established that “a transaction aimed at alienating a share or part of a share in the authorized capital of a company is subject to notarization by drawing up one document signed by the parties .
Failure to comply with the notarial form entails the invalidity of this transaction ."
Paragraph 3 of the same paragraph determines that it is permitted to enter into agreements establishing an obligation to carry out in the future, if certain circumstances arise, a transaction aimed at alienating shares in the authorized capital. In essence, we are talking about preliminary agreements made under conditions. Accordingly, judicial practice has already been formed according to these norms of law. The defendants in such claims also at some point “changed their minds” about concluding an agreement for the sale and purchase of a share in the authorized capital of the LLC, and also referred to the fact that the preliminary agreement was not notarized and was void
.
In the understanding of these defendants and in accordance with paragraph 2 of Art. 429 of the Civil Code of the Russian Federation, “ a preliminary agreement is concluded in the form established for the main agreement, and if the form of the main agreement is not established, then in writing.
Failure to comply with the rules on the form of the preliminary agreement entails its nullity .”
In fact, regarding the nullity of a transaction, the Civil Code of the Russian Federation has long duplicated the instructions of the Federal Law “On Limited Liability Companies”. Interestingly, this dispute was settled by the Supreme Arbitration Court of the Russian Federation, and with its characteristic elegance. Maybe I’m just nostalgic for the practice of the Supreme Arbitration Court of the Russian Federation, but look for yourself how everything was decided in the ruling dated March 5, 2012 in case No. A50-11309/2011: “By decision dated August 16, 2011, the Arbitration Court of the Perm Territory refused to satisfy Evdokimov’s claim YES.
to Kolesnikov I.A. on the recognition as invalid on the grounds of non-compliance with the notarial form of the preliminary agreement concluded between them dated 06/30/2010 for the purchase and sale of a share in the authorized capital of the company... and on the application of the consequences of the invalidity of this transaction... In an application submitted to the Supreme Arbitration Court of the Russian Federation on the revision of the above-mentioned judicial acts by way of supervision Evdokimov D.A. asks to cancel them... Having studied the judicial acts and the applicant’s arguments, the court finds no grounds for transferring the case to the Presidium of the Supreme Arbitration Court of the Russian Federation... The subject of the disputed agreement, as established by the courts, is the obligation of the parties to conclude a future agreement, and not the obligation to alienate a share (part of a share) in the authorized capital of a business company.
Consequently, according to the courts, failure to comply with the notarial form of the preliminary agreement for the sale and purchase of a share does not entail the invalidity of this transaction
.”
Earlier, the lower 17 AAS of the Russian Federation also gave a very interesting motivation: “ taking into account that in para.
Clause 3, Article 21, Clause 11 of the Law on Limited Liability Companies names two transactions that require notarization: an agreement that expresses the will of the alienator to transfer the share in the event of certain circumstances; transaction directly aimed at the alienation of a share, then the agreement in question does not require notarization and is considered concluded when the parties reach an agreement on all essential terms .
A transaction concluded on its basis is subject to notarization. ” I am sure that this position is absolutely correct.
It is absolute stupidity to notarize a preliminary agreement under which no money or property is transferred. At the same time, of course, the Federal Law “On State Registration of Real Estate” (as amended and additionally, entered into force on January 2, 2017), and specifically Art. 42 of the said law, prescribes a notarial form for “a transaction for the alienation of shares in the right of common ownership of real estate.” But the Federal Law “On Limited Liability Companies” contains the same instructions, it just talks about a different object. I would like to draw a line, but, unfortunately, it is difficult to do now. The Supreme Arbitration Court of the Russian Federation, as you know, has been liquidated, and the Russian judicial system has only one head left. For this reason, the judicial practice of the Supreme Court of Russia is currently dominant, which, as far as I know, has not yet spoken out regarding preliminary agreements and their form. I cannot say whether the new judicial practice will be guided by the above-mentioned definition of the Supreme Arbitration Court of the Russian Federation. The concerns are related to this. For example, previously the Supreme Arbitration Court of the Russian Federation always did not welcome the transfer of money under a preliminary agreement, and the deposit transferred under a preliminary transaction was always considered an advance. This was absolutely correct, since a deposit cannot secure a non-monetary obligation, and a preliminary agreement is always non-monetary, its nature is non-monetary. At the same time, the Supreme Court of the Russian Federation allowed the presence of a deposit in relations under a preliminary transaction, and simply turned a blind eye to the fact that such a scheme contradicts the very nature of the deposit, which always has a payment function. There are a lot of practices on this topic. As a result, after the liquidation of the Supreme Arbitration Court of the Russian Federation, the position of the Supreme Court of the Russian Federation began to dominate. It is possible that the Supreme Court of the Russian Federation will nevertheless speak differently on the issue raised, and then the preliminary agreements for the sale and purchase of shares in property rights will certainly have to be taken to notaries. I wouldn't want to, of course. www.granatmaxim.ru
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