15 years have passed since the 2008 crisis. It began with the mortgage bubble in the US and affected the whole world, including Russia: many developers went bankrupt, and equity holders were left without housing.
This led to serious changes in the legislation: equity holders' guarantees were strengthened, payments were introduced through special escrow accounts, and requirements for developers were tightened. Nevertheless, delays in the delivery of a house and legal disputes are not uncommon.
I have been working as a lawyer in the real estate sector for over eight years and often handle cases of defrauded equity holders. I will tell you how to choose the right developer and what to pay special attention to.
But you should not rely only on the developer rating for the following reasons:
This is a commercial rating, not a state one. The evaluation criteria there are not always clear and transparent.
The rating does not take into account nuances. For example, a company built a house with delays, and then its owner changed - this happens with legal entities. And it turned out that the first company postponed the deadlines, and the second one completed the construction - and exactly on time as promised. And all subsequent objects were delivered on time. But there are no such details in the object card.
There may be inaccuracies in the rating, especially for small developers. For example, it may be indicated that the developer has several completed residential complexes, but in fact all these residential complexes were built by different legal entities.
I recommend considering all the criteria together. And before concluding the contract, collect up-to-date information about a specific residential complex. I will tell you in more detail how to do this.
What to check before buying a new building
But you shouldn't rely solely on the developer rating for the following reasons:
This is a commercial rating, not a state rating. The evaluation criteria there are not always clear and transparent.
The rating does not take into account nuances. For example, a company was building a house with delays, and then its owner changed - this happens with legal entities. And it turned out that the first company postponed the deadlines, and the second one finished the construction - and exactly on the date that it promised. And all subsequent objects were delivered on time. But there are no such details in the object card.
The rating may contain inaccuracies, especially for small developers. For example, it may be indicated that the developer has several completed residential complexes, but in fact, all these residential complexes were built by different legal entities.
I recommend considering all the criteria together. And before concluding an agreement, collect up-to-date information about a specific residential complex. I will tell you in more detail how to do this.
