Off-Plan Apartment Purchases
Has the developer delayed handover of the apartment, asked you to sign an acceptance document despite defects, refused to remedy defects or disputed the amount of your claim? We first review the agreement, dates, acceptance documents and the nature of the defects, and then determine which claims can actually be brought.
We advise on disputes under Russian shared-construction participation agreements (DDU), used for the purchase of apartments before construction is completed.
COMMON SITUATIONS
A dispute with a developer may arise before handover, during the acceptance inspection, or after the keys have already been received. Different documents and evidence matter at each stage.
The contractual deadline has passed or was postponed, but the property has still not been handed over to the buyer. The contractual dates and the rules of liability applicable to the relevant period need to be reviewed.
There are cracks, leaks, window problems, defects in engineering systems, finishing or room geometry, or other construction defects.
The problem was discovered after the handover document was signed, and it is necessary to determine whether it falls within the developer’s responsibility and the applicable guarantee period.
The defects have been documented and a demand has been made, but the work is delayed, only partly completed, or the quality of the repairs is unsatisfactory.
The property being handed over differs from the parameters stated in the agreement, raising possible monetary or other claims.
The breach is serious and it is necessary to determine whether there are grounds for termination or unilateral withdrawal under the procedure provided by law.
Nikolay NemkovManaging Partner, Konsultant Law Firm
NIKOLAY NEMKOV ON DISPUTES WITH PROPERTY DEVELOPERS
If a problem may become the basis of a claim against the developer, evidence of its existence, nature and scale should be preserved. An oral argument with the developer’s representative does not create an evidentiary record.
DISPUTE LOGIC
In a dispute with a developer, the outcome depends not only on the fact of delay or the existence of a defect. The agreement, dates, handover documents, the time the defect was discovered, its nature and the parties’ actions after the problem arose all matter.
We determine the property, handover deadline, apartment characteristics, price and other terms relevant to the dispute.
A delay, defect, discrepancy in characteristics or other breach must be connected to specific documents and dates.
Remedy of defects, price reduction, reimbursement of expenses, monetary claims, termination or another remedy provided by law.
Pre-trial claim, expert evidence, negotiations, court proceedings and subsequent enforcement.
We do not start with the highest possible claim amount. We first establish the breach and the evidence, and only then determine the complete set of claims.
WHAT WE DO
We review the agreement, amendments, developer notices, handover and acceptance documents and other materials.
We establish the contractual date and the actual sequence of events.
We determine the nature of the defects, when they were discovered and the evidence relating to the quality of the property.
We determine whether an inspection, specialist opinion or court-appointed expert examination is needed.
We formulate the pre-trial claim and legal demands based on the specific breach and the applicable legal framework.
We support settlement where the required result can realistically be achieved without court proceedings.
We prepare the statement of claim, objections, calculations and evidence and represent the client in court.
We monitor the next steps after the enforcement document has been obtained.
KEYS AFTER THE CONTRACTUAL DEADLINE
Advertising, correspondence and the agreement may contain different dates. To calculate a claim, it is necessary to identify the deadline that is legally connected with the developer’s obligation to hand over the specific property to the buyer.
We check the handover deadline stated in the agreement.
We determine whether documents changing the deadline were signed and what they provide.
We analyze the developer’s messages about readiness and postponements.
We establish the date the handover document was signed or another legally relevant event.
“The building has been completed” and “the developer has fulfilled its obligation to hand over your apartment” are not always the same event.
CALCULATION OF CLAIMS
The rules on liability for breaches of shared-construction agreements have changed repeatedly in recent years. Special rules on accrual and enforcement applied during certain periods.
Before stating an amount, the delay therefore needs to be divided by calendar periods and the version of the law and special rules applicable to each period must be identified.
A calculator that simply multiplies the apartment price by the number of days of delay may produce a legally incorrect result.
IMPORTANT FOR CURRENT CALCULATIONS
When calculating the penalty for delay in handover, the period from 22 March 2024 through 31 December 2025 is not included in the accrual of the penalty provided by Part 2 of Article 6 of Federal Law No. 214-FZ.
Special deferral rules apply to certain claims previously presented for enforcement, including through 31 December 2026. An old court calculation or a standard online calculator therefore cannot automatically be applied to a new situation.
We calculate the claim using the specific contractual dates and the actual handover date.
BEFORE SIGNING THE HANDOVER DOCUMENT
During acceptance, it is important to determine whether the property complies with the agreement and mandatory requirements and which defects need to be documented.
Walls, floor, ceiling, geometry, finishing and visible damage.
Operation, damage, sealing and installation.
Electricity, water supply, heating, ventilation and other systems provided for the property.
Whether the elements and equipment required by the agreement are present.
What documents you are being asked to sign and which comments are recorded in them.
Documentation of the defects found and the general condition of the property.
Do not sign a document containing a statement that you do not in fact confirm. First read exactly what your signature records.
QUALITY OF THE PROPERTY
The nature of the defect, whether it can be remedied, the cost of the works, its effect on use of the apartment and the time it was discovered all matter.
If the defect can be corrected, one possible remedy is to require that it be remedied.
Where provided by law, the buyer may raise the issue of a proportionate price reduction.
If defects are remedied independently, evidence of the nature of the defect and the amount of the costs should be considered in advance.
If the breach is more substantial, we separately assess possible consequences for the agreement and other remedies.
We first determine the legally relevant nature of the defect. Then we choose the claim.
DEFECTS AFTER HANDOVER
Discovery of a defect after the handover document has been signed does not by itself mean that it is too late to bring a claim against the developer. Properties purchased under a DDU are subject to guarantee obligations, and the nature of the defect, the time it was discovered and the cause of its appearance matter.
The developer may argue that the defect resulted from normal wear, improper use or repairs carried out by the owner or by contractors engaged by the owner. The condition of the property should therefore be documented before substantial intervention after the problem is discovered.
Signing the handover document closes the handover stage, but does not automatically close every question about the quality of the property.
PRESERVE THE EVIDENCE
Once the apartment has been received, it is natural to want to start repairs as quickly as possible. But if a construction defect may become the subject of a dispute, adequate evidence should be preserved before it is remedied.
Before repairs, the following may matter:
Evidence first. Repairs second.
WHEN THE PARTIES DISPUTE QUALITY
If the developer disputes the existence of a defect, its cause, the cost of remediation or its connection with construction, specialist knowledge may be required.
Whether the property has a technical defect.
What caused the defect.
Whether the completed works comply with the applicable requirements and the agreement.
What works are required to correct the problem.
What reasonable expenses are required to remedy the identified defects.
Questions for a specialist or expert are formulated for the specific legal dispute, not on the basis of “check the entire apartment.”
BEFORE SIGNING
The developer may propose an amendment, a new deadline, a handover document, a settlement agreement or another document. Its legal consequences should be understood before it is signed.
We check whether the document changes the developer’s previously agreed obligation.
We examine which facts the proposed wording asks you to confirm.
We check how the document describes the condition of the property and the buyer’s comments.
We analyze whether the document contains settlement terms for claims that have already arisen.
Signing should be an informed decision, not a condition imposed “just to receive the keys.”
IF THE APARTMENT WAS NOT ACCEPTED
If the buyer does not sign the handover document, the developer may, under the conditions provided by law, formalize handover unilaterally.
The dispute requires reconstruction of the notices, invitations to acceptance, reasons for refusal to sign, defects identified and the actions of both parties.
The existence of a unilateral handover document alone does not answer every question about quality or whether the parties acted reasonably.
THE PROPERTY TURNED OUT TO BE DIFFERENT
After construction, the actual area or other parameters may differ from the original design data. The legal consequences depend on the agreement, the nature of the discrepancy and the applicable legal requirements.
What characteristics are stated in the DDU.
What parameters are confirmed by the final documents.
What the agreement provides if the area or other characteristics change.
What monetary claim is made by the developer or the buyer.
We do not accept a demand for additional payment or a refund simply because the developer calculated it. We first review the agreement and the legal basis of the calculation.
WHEN THE GOAL IS TO EXIT THE AGREEMENT RATHER THAN RECEIVE THE APARTMENT
A breach by the developer does not always automatically mean that the agreement can be terminated at any time. The nature of the breach and the procedure for terminating obligations provided by law must be identified.
Before taking this step, we assess not only the legal basis but also the economic result: what happens to the money already paid, the property, the mortgage and the parties’ further claims.
The purpose of the analysis is to understand the consequences of exiting the agreement before an irreversible legal step is taken.
DDU + BANK
If the property was purchased using borrowed funds, termination, return of money and changes to the transaction structure need to be analyzed together with the obligations owed to the bank.
What claims exist against the developer.
What obligations remain owed to the bank.
How the money should move under the selected dispute-resolution option.
How changes to the main transaction affect the related security arrangements.
A dispute with the developer and the loan agreement are separate obligations that need to be considered together when the apartment was purchased with a mortgage.
RISK OF NON-PERFORMANCE
Sometimes delay in construction or handover is accompanied by serious financial problems at the developer. In that situation, an ordinary claim about the deadline may be only one part of a broader legal picture.
The current status of the project and the developer must be established and the protection mechanism applicable to the specific situation identified.
There is no universal advice to “terminate immediately” or “always wait.” The project status and the consequences of each option are assessed first.
THE PARTICIPANT’S STATUS MATTERS
If an individual acquires the property for personal, family or other needs unrelated to business activity, that may matter for application of consumer-protection legislation.
If the property is acquired by a legal entity, an entrepreneur or under another economic model, the legal framework must be determined separately.
Consumer claims cannot automatically be applied to every agreement merely because the subject matter is an apartment.
WHAT TO SEND THE LAWYER
The main agreement and all amendments.
Evidence that the participant performed the payment obligations.
Notices, letters and messages from the developer.
Handover document, defect list, inspection sheet and other documents.
Documentation of the condition of the property and the defects.
Specialist documents and cost calculations, if already available.
For the initial review, there is no need to order every possible expert examination in advance. We first determine which fact is disputed and what evidence is actually needed.
PRACTICAL RESULT
The buyer under a DDU usually needs a practical outcome rather than legal wording for its own sake: receive the apartment, remedy the defects, recover real expenses, or exit the agreement with clear consequences.
Before building the dispute solely around monetary sanctions, we therefore determine the client’s main objective and the real enforceability of each option.
The penalty is a liability mechanism. It should not obscure the main objective of the particular dispute.
The firm has been practicing since 2007. We handle litigation and complex legal matters for businesses in Krasnoyarsk, Moscow and other regions of Russia.
HOW WE VIEW THE DISPUTE
A good claim documents the breach, states a clear demand and shows what evidence supports it. It is useful both when the dispute is settled and when the matter later goes to court.
We therefore do not start from a template. We first collect the facts, determine the client’s objective and only then formulate the claims against the developer.
The more precisely the dispute is documented before court, the less history has to be reconstructed during the proceedings.
HOW TO START
DDU, amendments, acceptance documents, correspondence, photographs of defects and other materials you already have.
We check the deadlines, condition of the property, parties’ claims and the rules applicable to the particular period.
We determine the evidence, whether a specialist or expert examination is needed, and the structure of the pre-trial claim or future lawsuit.
We support negotiations, pre-trial work and court proceedings depending on the selected strategy.
MANAGING PARTNER
Managing Partner, Konsultant Law Firm
More than 20 years of practice in complex property and corporate disputes. Practicing insolvency practitioner.
Real Estate Developer Disputes in Practice
Practical answers for participants in shared construction dealing with delayed handover, property defects, apartment acceptance and claims against a developer.
The first step is to review the handover deadline established by the shared construction agreement and any documents used by the developer to change the deadline or notify the participant.
The actual period of delay and possible claims against the developer should then be determined. When calculating financial claims, special rules that applied during particular periods and affected the accrual or enforcement of penalties must also be considered.
For this reason, a claim amount should not be calculated solely by counting the days of delay. The agreement date, contractual deadline, actual handover date and regulations applicable during the relevant period must all be analysed.
Where the property does not comply with applicable requirements, a participant in shared construction may require the deficiencies to be formally recorded.
In circumstances provided by law, the participant may refuse to sign the handover document until the developer fulfils its obligations relating to the identified defects.
It is important to properly record the condition of the property and the reasons for refusing to sign, because unjustified avoidance of acceptance may have different legal consequences.
Depending on the nature of the defects and the circumstances, a participant in shared construction may use the remedies provided by law.
These may include requesting that defects be corrected free of charge, seeking a proportionate reduction of the contract price or reimbursement of expenses incurred to correct the defects.
The appropriate claim depends on the condition of the property, the nature of the defects, available documents and how the deficiencies were recorded.
Signing the handover document does not necessarily prevent claims where defects are discovered later.
The prospects depend on the nature of the defect, when it was discovered, applicable warranty terms, acceptance documents and the cause of the defect.
Where a defect is identified within the applicable warranty period, it should be properly recorded and an appropriate claim should be submitted to the developer without unnecessary delay.
An expert assessment may be important where the parties dispute the existence of defects, their causes or the cost of remediation.
A specialist or expert report may help document the technical condition of the property and substantiate the amount of a claim.
The need for and type of assessment should be determined based on the particular dispute, because obtaining an expert report before contacting the developer or going to court is not equally appropriate in every case.
Russian shared construction legislation provides liability for failure to meet the contractual handover deadline, but the amount of a claim must be calculated based on the circumstances of the particular agreement.
Special rules governing the accrual of financial sanctions applied during certain periods, and specific enforcement or deferral rules also applied to some claims.
Before making a claim, it is therefore necessary to identify the relevant delay periods and the rules applicable to each period rather than applying one formula to the entire duration of the dispute.
Real estate developer disputes require combined analysis of the shared construction agreement, handover documents, evidence of defects and regulations applicable during the relevant periods.
Errors during apartment acceptance, defect documentation or calculation of claims may affect the subsequent litigation position.
A lawyer helps determine appropriate claims, organize evidence, prepare a formal demand and develop a litigation strategy based on the specific property and agreement.
CASE REVIEW
Briefly describe the problem: delayed handover, apartment defects, an acceptance dispute, an amendment, the property area or another issue. State which documents you already have.
