When buying off-plan one should know that the purchase contract is a complex one and consists of two parts, which can be treated as separate contracts – a preliminary contract for the transfer of the right to build which transforms itself into right of ownership of the apartment when the apartment is build and a contract for the construction of the apartment which is to be performed according to the construction schedule specified in the contract itself. The developer assumes the obligation to organize the construction of the real estate and deliver the real estate to the buyer in the way it is specified in the preliminary contract. This contract is effective upon its being signed by both parties and it regulates the payment plans and the manner in which the property is being built. It governs also any delay in the performance of the obligations of both parties as well as the warranty time periods and the cure of any defects in the construction works. It also specifies the way the buyer can exercise control over the construction works.
It should be noted also that usually the developer is an investor that has acquired the ownership title, or the right to construct in the land plot on which construction works are to be carried out. The developer usually (but not always) assigns the performance of the construction works itself to a contractor. The contractor is responsible for the execution of the building in compliance with the approved designs and permits and the legal requirements concerning construction works, methods, materials and products, as well as for preparing the “as-made” documentation of the building, if explicitly assigned to him under the construction contract. The developer organizes and finances the whole construction process, issues all relevant documents, permits and certificates, controls the process and delivers the individual properties to their buyers.
Since the developer is the owner of the land plot or the right to build upon the completion of the building he becomes the owner of all apartments in the premises. Then the developer starts to transfer the title of the apartments to the individual buyers by notary deeds. With the preliminary contract both the developer and the buyer assume an obligation to appear before a competent notary public once the building is completed and to transfer the title from the developer to the buyer. It is legally binding obligation and if one of the parties refuses to appear before the notary the other party can file a claim before the respective court and enforce the contract. The court decision will replace the final contract in the form of a notary deed and will transfer the title on the property to the buyer.