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Legal nuances of real estate exchange
The rights and obligations of citizens when making real estate exchange transactions are regulated by Article 31 of the Civil Code of the Russian Federation.
Without going into details, according to the law, one owner transfers his property to another, and he, for his part, provides him with his property. Next, all papers are reissued, and mutual settlements are made if necessary.
There are two types of exchange:
- Equal . When the assessed value of both properties is the same;
- Unequal . When the price of one property is less than another.
In an unequal transaction, both parties agree among themselves on the amount of additional payment for the property. The conditions and procedure for the mutual exchange of property are formalized through an agreement, which is certified by a notary. This ensures that all agreements specified in the agreement are respected.
Step-by-step instructions for exchange
Formally, the exchange of real estate, regardless of its type, does not have significant differences. True, most of the time is spent on the stage of searching for a suitable option.
If we break down all the real estate exchange activities, we can highlight the following steps:
- Expert assessment of the cost of the apartment.
This step allows you to evaluate the existing property and find out what kind of house you can count on, taking into account the price of the apartment and the available personal savings that the owner is willing to spend on exchange. If such an assessment is not carried out, then there is a possibility that the value of the existing property will be underestimated.
- Searching for a home to organize an exchange.
You can do it yourself, or you can resort to the help of real estate offices. The probability of finding a suitable object in the second option increases significantly, since an independent search takes a lot of time and effort, and often there is simply no time for constant monitoring of advertisements. Perhaps the owner of the apartment has some preferences regarding the location of the property, number of floors, area, number of outbuildings or rooms inside the house. Then these wishes should be indicated to the realtor, who will look for a house that suits your needs.
- Legal verification of documentation and preliminary drawing up of an exchange agreement.
When an object that meets the client's requirements is discovered, the scenario of further events can develop in several ways. The simplest one is when both parties are satisfied with the selected result and all that remains is to agree on an additional payment. But, most often, situations arise when it is necessary to make an advance payment for a future transaction and, at the same time, look for additional options for a circular exchange or look for a buyer for your apartment. Once property for exchange has been discovered, a preliminary exchange agreement should be prepared. Its form is simple and does not differ much from the standard contract. At the same stage, the documentation of the objects involved in the transaction is checked for cleanliness and absence of problems.
- Signing of the agreement by the parties, registration of the transaction.
It is this stage that ultimately registers transactions and, accordingly, entails legal consequences. From the moment the transaction is registered, the former owner of the apartment becomes the owner of the house and vice versa.
How to change an apartment to a house? Main stages of exchange
The law does not provide for any strict rules and procedures for the exchange of real estate. The parties themselves can agree on the procedure for the transaction; they can conduct it in person or remotely. There are no restrictions on the amount of additional payments in case of an unequal exchange - the parties agree on this themselves (only it is necessary to specify the amount of the additional payment in the contract).
The process of exchanging an apartment for a house includes several stages:
Property valuation
Owners are advised to first obtain an independent appraisal of their property.
To do this, you should contact an appraiser. They can professionally assess the current wear and condition of objects, their location, pros and cons, and surrounding infrastructure. Based on the data obtained, the market value of housing is determined.
Exchange of house and plot
In the vast majority of cases, a private house is offered for exchange along with a plot of land. In this case, the land increases the value of the property.
A feature of such an exchange is the mandatory certification of the possibility of further construction on this site, as well as plans for its demolition in the future.
If an apartment is exchanged simply for a plot of land, without construction, but it is determined that construction on it is prohibited, the buyer may lose both money and the plot itself, which is not suitable for building the desired house.
What documents will owners need?
To conclude an agreement to exchange an apartment for a house (and vice versa), you need to prepare the following package of documents:
- Documents confirming ownership of real estate: certificate, USRN extract, purchase and sale agreement or inheritance or gift agreement;
- Extracts from the BTI and from the passport office;
- Consent (permission) of the husband/wife to complete the transaction and waiver of claims to the property from other residents;
- Cadastral passport;
- Home Book;
- Passport;
- An extract from the housing office (or homeowners' association, management company, SNT) about the absence of debt for utility services;
- Documents for land ownership, cadastral passport;
- The act of surveying a land plot.
All documents must be provided in originals. Next, copies are made of them and certified by a notary.
Various options for exchanging living space in Moscow
When making a decision to exchange living space in Moscow for a suburb for various reasons, it is necessary to take into account some features. For example, the ability to drive up to a private house by private vehicle or the ability to get to Moscow by public transport, which is also an important factor when you decide to change real estate.
Modern cottage communities in the suburbs of Moscow have everything you need for a comfortable life: shops, kindergartens, schools, and so on. As a rule, such settlements are designed into a single whole and look very attractive than some areas in Moscow itself.
To exchange, for example, your one-room apartment in Moscow, you can select the house you are interested in near Moscow. Accordingly, if you have a large apartment in Moscow or another city, then this gives a clear advantage in choosing a living space.
Sometimes Moscow residents decide to buy cheaper living space in order to use the difference in cost between an apartment in Moscow and a private house to make the necessary repairs. This somehow changes their living conditions. If at the moment you are not ready to fully pay for the purchase of a residential building, then the option of purchasing a plot of land on which you can independently build the cottage of your dreams is possible. With this development of the situation, construction may be delayed for some period, which must also be taken into account.
Subtleties of real estate exchange and pitfalls
From a legal point of view, an exchange agreement differs from a purchase and sale agreement. First of all, when exchanging real estate, both participants simultaneously have the status of Seller and Buyer. But that's not all:
- If the price of each object is not specified in the document, then the exchange is considered equal. (be careful - many owners did not take this point into account and fell into a “trap”);
- The housing becomes the property of another owner only if all clauses of the contract are observed, the deed is signed and the state registration of ownership of both objects is completed in Rosreestr (thus the law “insures” the owners against fraudulent schemes - when one buyer has already received the property, but the second has not yet );
- In addition to signing the Act on the execution of the exchange, the parties also need to sign another Act confirming the execution of the counter transaction if the other party wants to transfer the property later (Article 328 of the Civil Code of the Russian Federation);
- If, according to a court decision, the exchange agreement was executed incorrectly, or the exchange was made without the consent of one of the owners, then such a transaction is declared invalid. And the property is returned to its original owners;
- When making an unequal exchange with an additional payment (which happens quite often when deciding to exchange an apartment for a house), the owner of the house is required to pay income tax of 13% on the profit received. In case of an equivalent exchange, there is no need to pay tax;
- As already mentioned, when the rights to private houses are transferred, the rights to the land plot are automatically transferred. Here it is important for the apartment owner, even before signing the exchange agreement, to check whether the previous owner has violated the laws on the development of plots (according to its category and purpose). Otherwise, there is a risk of losing invested funds and land.
Transaction costs
Unlike ordinary purchase and sale transactions, during real estate exchange transactions, owners incur additional costs:
- If the area of one or both objects is more than 100 square meters. m, then a state duty is charged - 0.5% of the cost of a more expensive object;
- If the object is changed twice in a year, the amount of the duty becomes even higher - and you need to pay up to 2.5% of the cost;
- If the housing area is less than 100 sq. m., and this is the first housing exchange transaction of the year, then you do not need to pay a fee;
- Expenses for notary services;
- Income tax (if the transaction is unequal) - in the amount of 13% of the profit.
All costs of paying fees and notary services are borne by both participants in the process.
Features of some transactions
Exchanging a house for another house or apartment does not differ in design. But there are some cases whose features need to be mentioned. These are transactions that involve shares of real estate, exchange for vacations and exchange of houses in the village.
Vacation home exchange
This option is used if there is a desire to change housing for a while. Such exchange is not regulated by law. You can complete two rental transactions.
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Exchange of shares
When dealing with shares, you must take into account several nuances.
Firstly, the priority right to acquire a share belongs to the person who owns the other share of the property. Other transactions will be legal only with a written refusal.
Moreover, the value of the property offered for exchange cannot be less than the price that was offered to the co-owner.
Secondly, such agreements must be certified by a notary. This rule applies to all types of real estate. For example, if an apartment is changed to a house with part of a plot, notarization will also be required.
The amount that needs to be paid depends on the cadastral value of the property (the more expensive one if payment is expected).
How to draw up a contract correctly?
A real estate exchange agreement must be drawn up only in writing. It is important to do this correctly, otherwise the agreement will be invalidated and the deal will be cancelled.
The document must indicate the following points:
- Date and place of the transaction;
- Information about the owners - full name, registration address;
- Information about real estate objects participating in the exchange - location, number of floors, entrance number, number of rooms, infrastructure facilities located nearby, etc.;
- Information confirming the ownership of housing;
- The amount of additional payment that must be made by the owner whose property is cheaper;
- Consequences of breaking the deal;
- Force majeure;
- The preferred method of resolving disputes in case of non-compliance with the terms of the agreement by one of the parties (court, arbitration, out-of-court procedure);
- Personal signatures of the parties;
- Signature of the notary certifying the contract.
After signing the agreement, each party receives two notarized copies of the agreement. One of which is subsequently submitted for registration to Rosreestr.
Briefly about taxation
- Real estate that has been transferred into ownership upon concluding contracts without additional payment terms is not subject to taxation. That is, equivalent.
- If the contract specifies the amount of the surcharge, then the party receiving it is obliged to pay a tax in the amount of 13% of the amount of the surcharge. Foreign citizens will pay 30%.
- Housing owned by a citizen for more than 5 years is not subject to the tax deduction.
The transaction of exchanging an apartment for a house, cottage, or land is a large-scale one, and to avoid mistakes, you need to turn to professionals who will help carry it out from beginning to end.
Cases when an exchange transaction may be canceled (not take place)
According to the Civil Code, there are a number of cases when it is impossible to exchange real estate:
- The barter agreement was declared invalid in court;
- One of the owners was sued;
- If a building or living space is considered unsafe, it is demolished;
- If the property has official status or is a dormitory;
- If a participant in the transaction was expelled from the housing cooperative.
If there is at least one of the violations described above, the contract will be declared invalid. And it will be cancelled, and all data in Rosreestr regarding real estate rights will return to the previous owners.
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Advantages of real estate properties
Both living in a private household and owning an apartment in a multi-storey building have a number of positive aspects.
In favor of a detached house he says:
- absence of neighbors, which guarantees relative silence and no likelihood of flooding;
- the opportunity to dispose of land on the site, i.e. build buildings, a bathhouse, get animals.
Among the disadvantages, we can note the need to constantly invest considerable amounts of money in landscaping, as well as in repairs. The landscaping of the local area requires especially a lot of investment at the initial stage.
The future owner of the apartment will be able to appreciate the following positive aspects of this type of real estate:
- minimal costs for organizing cosmetic repairs;
- small amounts due for utility bills;
- living in an area with developed infrastructure and transport links within walking distance.
One of the significant disadvantages is the possibility of finding yourself next to noisy people, with whom sometimes it is not even possible to come to an agreement. Also, due to the proximity, troubles may arise at the everyday level.
Where to look for options?
of a real estate office can suggest the most advantageous exchange options .
As a rule, these people already have a long-established client base, and surely some of them will express a desire.
But you can also try to find an opponent under the contract on your own , because the realtor will have to charge money for his efforts.
In order to independently find a person ready to exchange, you need to monitor advertisements on various resources, as well as post your own.
What laws govern it?
Like any other transaction, barter is regulated by civil law. An entire chapter of this code, starting from Article 567, is devoted to the issue of barter
But also, a similar procedure can be carried out through another, more popular transaction. Often, the parties resort to formalizing the purchase and sale so that the exchange does not become a reason for one of the parties to go to court due to failure to fulfill obligations.
Movable and immovable things are subject to purchase and sale, although this transaction will be bilateral in nature and drawn up twice.
The purchase and sale agreement is also provided for by civil law in Article 454. It is in it and subsequent rules that the essence of this procedure with all the ensuing nuances is specifically revealed.
