How to conduct an audit of land purchased for construction?

    0
    224

    Audit of land is a complex procedure, which includes due diligence of the property, analysis of administrative and technical constraints, including the availability of any additional requirements of Federal or municipal authorities in urban planning, engineering, infrastructure, environmental charges, aimed at identifying the deficiencies of land and prevention of risks of the Builder in implementation of the investment project.

    In other words — to conduct a land audit allows the Developer to commit the transaction for the acquisition of land to assess all possible risks and determine the attractiveness of the purchase of this property.

    Evaluation of key parameters of the land

    Not every owner has the volume of documents that could allow a potential developer to assess the necessary cost to understand the preliminary cost of the future project.

    To date, all developers carry out a land audit to develop the most appropriate scheme of land purchase, providing, as it seems all possible risks, however, the court practice shows that there is a large amount of litigation regarding the extent of “due diligence” when choosing a future development site.

    For example, the investor, to acquire land, in addition to legal documents, you must obtain the following:

    1. General plan of the city or city district (further — GP);

    2. Rules of land use and development (hereinafter — PHC);

    3. The project planning area;

    4. Obtain development plan of land plot (gpzu).

    5. Report on the results of the topographic survey of the land plot;

    6. Information about the owners of land bordering on the potentially acquired land (to understand the plans of the prospects for the development of neighboring areas).

    Remained without proper attention to the documents may involve significant risks, for example:

    While the land in the buffer zone of the monument of history and culture, there are some restrictions in the maximum height of building (maximum 12 m), the required construction approval from the relevant Ministry. These risks are significant and not disposable.

    READ:  Alpine beauty and Scandinavian style: wonderful HUUS hotel in Switzerland

    In addition to the restrictions in the use of the land, the developer also can and do lose their rights on purchased land.

    So, not having carefully considered the grounds of the seller’s rights to the alienated property, or assessing the legality of his actions, there is a risk of declaring such transaction void (insignificant).

    For example:

    The land belongs to ownership rights with 25.06.2017 for years until a specified date, it was owned by another person, in respect of which entered bankruptcy.

    The assessment of the present transaction it is necessary to pay attention to the following circumstances:

    1) the Transfer of ownership based on multiple number of transactions in the framework of bankruptcy procedure, each transaction can be challenged. Consequences of invalidation of a transaction may be: 1) recognition of the initial owner of the right of ownership of the property and return the property to the bankruptcy estate; 2) recovery of funds paid on account of the value of the property; 3) other possible options within the framework of bankruptcy proceedings in the bankruptcy case.

    2) the Lack of information on the presence/absence of approval of the transaction party to the public, documents about payment and other transactions having legal significance of the documents.

    3) the Period during which the transaction can be challenged.

    According to the clarification contained in paragraph 57 of the Resolution of Plenum of the Supreme Court of the Russian Federation No. 10 of the Plenum of the RF N 22 from 29 April 2010 “On certain issues arising in judicial practice when resolving disputes relating to the protection of the right of ownership and other real rights” within the Statute of limitations on lawsuits aimed at challenging a registered right starts from the day when the person knew or should have known about the corresponding entry in the unified state register. This itself is the entry in the egrn on the right or encumbrance of immovable property does not mean that since its inclusion in the egrn party knew or should have known of the violation of the right.

    READ:  Three new complex of Moscow where you can buy a house

    Since the law does not provide otherwise, to actions aimed at contesting the registered rights, the General limitation period under article 196 of GK of the Russian Federation”.

    Other crucial parameters of choosing the land.

    • The connectivity of the constructed object to engineering networks and the cost of such work;
    • Determination of transport accessibility to the site, access roads to the land plot;
    • Restrictions/encumbrances on the use of land;
    • The ability to eliminate such restrictions, and the cost of their removal;
    • The study prospects of the development in accordance with urban planning and land legislation;
    • Road map for the implementation of the project indicative budget

    Conclusion:

    The lack of sufficient knowledge of current legislation in the field of real estate often leads to disastrous consequences, such as loss of the right to land, identification of limitations and encumbrances of land, the inability to dispose of the facility, the inability of a section of land, allotment of shares, the imposition of fines for the misuse, the difficulties of obtaining permits.

    To conduct a comprehensive audit of the land allows further to evaluate the entire investment project and to protect the business owner from negative consequences.

    Lawyer, partner of Law Bureau “Vladimir Ryabenko and partners” Alina Berest

    LEAVE A REPLY

    Please enter your comment!
    Please enter your name here