Buying an Apartment in a Shared Building Can Fall Through at the Last Minute. How to Avoid It?
Selling and buying shared property is somewhat more complex and time-consuming process, since there is not always certainty whether the transaction will succeed as desired. However, there are also ways to mitigate risks here, explains Irina Surmai, ELUM Real Estate broker and lawyer.
If a holder of shared property wishes to sell their proportional share, they are obliged to notify, depending on the circumstances, one or more co-owners who have a legal right of first refusal about the transaction concluded after signing the sales contract. It is not sufficient to merely inform verbally, but the terms of the signed sales contract must be presented to the co-owners. After receiving the notice, they are given a two-month period to decide whether to agree with the concluded transaction or instead exercise their right of first refusal to purchase the shared property themselves.
On the one hand, it is logical that a property owner decides themselves when, to whom, and on what terms they will sell their property, but in this situation, the interested buyer found may not become the new owner. This can be considered a significant drawback, since finding a buyer for such property is more difficult, which in turn damages the property's value and significantly extends the sales period.
This is also understandable, since the buyer ends up in an uncertain situation where the property price has been paid or the money is held in the notary's escrow, and possession rights have been transferred, but the buyer cannot, for example, make improvements or be certain until two months have passed that they will actually become the owner of the property.
Involving other owners helps
The best way to create a sense of security for the buyer is to involve the co-owners in the conclusion of the sales contract and at the same time make an agreement in the same contract renouncing the right of first refusal.
Another option is to first conclude an obligatory sales contract for the proportional share of the property, since in this contract all important terms of the transaction are agreed upon, which may affect the decision of persons holding the right of first refusal. The final property rights contract is concluded only when the right of first refusal is not exercised. It is worth noting that in the sales contract, it is possible to regulate how the seller and buyer will proceed if the right of first refusal is exercised.
In order for the entire sales process to be smoother and all possible risks and problems to be more easily solvable, I recommend consulting with a qualified broker or lawyer. The notary will also always clarify the details of the transaction.
