A contract for participation in shared construction is an agreement on the basis of which the developer undertakes to build an immovable property within a certain period of time and hand it over to a shareholder (participant in shared construction). The shareholder is obliged to pay the amount specified in the agreement and accept the object. In practice, situations very often arise in which the continuation of this agreement becomes impossible, and it becomes necessary to terminate it.
Instructions
Step 1
Delaying construction may become grounds for terminating the equity participation agreement. The shareholder has the right to terminate the performance of the contract, provided that the developer fails to fulfill its obligations within the period specified in the contract. The terms of delivery of the object must be indicated in the contract, otherwise such an agreement is considered illegal. The shareholder is supposed to pay a penalty if the object is not commissioned on time.
Step 2
If the developer hands over an object that does not meet the requirements of the project documentation and technical regulations in terms of quality, then the shareholder may demand termination of the contract. If the leased object has significant shortcomings that make it unsuitable for living, the shareholder has the right to demand from the developer to eliminate them or reduce the price of the contract. These claims can be made during the warranty period, which is at least five years.
Step 3
The fulfillment of obligations under the contract instead of the developer can be carried out by a bank guarantee. The validity period of this guarantee must be at least 6 months longer than the contractual deadline for commissioning the object. If the bank's guarantee ends before the expiration of this time, then the guarantor and the developer will have to notify the participant in the shared construction about this no later than a month before its termination. Within 15 days, the developer must draw up a new surety agreement. If this does not happen, then the shareholder may demand termination of the contract.
Step 4
There are situations when termination of the contract is permissible only after a trial. The shareholder has grounds for this in the following cases: termination (suspension) of the construction of a house if there are circumstances indicating that the shared construction object will not be commissioned within the appointed time; significant changes in design documentation; changes in the purpose of non-residential premises or common property that are part of the facility under construction.
Step 5
The developer can unilaterally terminate the contract with the equity holder if he does not fulfill his obligations to pay. The developer does not have the right to terminate the contract immediately. He must send a written notification to the shareholder, which informs about the need to pay the debt. If a participant in shared construction does not repay debts, but it is known that he received a notification, then the contract is terminated. The shareholder will be obliged to pay for the delay in accordance with the procedure established by law.
Step 6
An agreement on termination of an equity participation agreement is subject to mandatory registration in the Unified State Register of Rights (Unified State Register of Rights).
