A significant part of the residential real estate stock is in common ownership. Shared ownership imposes certain restrictions on operations with objects: the owner of the share cannot sell it to a third party, bypassing other apartment owners who have a pre-emptive right to purchase.
What is called the pre-emptive right to purchase a share of an apartment and how does it arise?
To begin with, it should be clarified that common property can be shared or joint. According to Art. 244 of the Civil Code of the Russian Federation, property belonging to two or more persons is considered common. If the exact shares of the owners are determined, the property is in shared ownership, if not determined, it is in joint ownership.
- The owner of the share has the right to dispose of it at his own discretion, if his actions do not violate the rights of the other owners.
- Joint property cannot be sold by one of the owners - this will require a preliminary division.
The right of priority redemption arises when the owner of the share has decided to sell it and has determined the market value. He is obliged to notify the other owners of this by registered mail or personal notice.
Within a month from the date of receipt of the letter, the owners of adjacent shares must make a decision to purchase.
Who gets the right first?
The following have the right to purchase shares of the apartment:
- owners of square meters in communal premises;
- owners of shares in apartments.
Neighbors in a communal apartment often become a stumbling block when it comes to selling a room. Although such housing involves separate living, the room can be registered as private property or as a share of common property. In both cases, when making purchase and sale transactions, the norms of Art. 250 of the Civil Code of the Russian Federation: neighbors have a priority right to buy out vacated rooms.
If we are talking about an apartment in which a family lives, selling a share to a third party seems impractical and even absurd, since it is often impossible to determine its physical boundaries (for example, 1/3 of a share of a 1-room apartment). However, when inheriting property and family conflicts, such attempts also occurred. The right of shareholders to repurchase must be strictly observed.
Part of an apartment that is in joint ownership cannot be disposed of individually. First, a division should be carried out with the determination of the shares of each of the owners, and only after that you can sell your share - of course, the co-owner will use the right of first refusal.
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The law prohibits assigning the right of redemption to third parties: it will not be possible to agree with a relative or neighbor to sign a waiver in favor of a third party, bypassing other owners of common property.
What exceptions to the preemption rules does the law make?
The preemptive right applies to any purchase and sale transactions and exchange of shares in residential premises, except for the sale of:
- shares of real estate at public auctions;
- shares of the land plot on which a house in common ownership stands, or premises in this house.
The exception is gift agreements - this loophole in the law is sometimes exploited by residents of communal apartments who are unable to reach an agreement with their neighbors. To avoid red tape with refusals and notifications, the seller transfers the room to the buyer supposedly as a gift, free of charge, but the latter has to pay a tax to the state treasury - unless he is a close relative or spouse of the donor. If the neighbors manage to prove in court that the deal was fictitious, it may be declared invalid.
Instructions for exercising the pre-emptive right when selling a share
The purchase and sale of a share must be completed in compliance with legal regulations. Of course, when the buyer is a relative or neighbor, no difficulties arise, but what should those who want to sell square meters in a communal apartment do, but none of their neighbors have expressed a desire to expand their living space? Or do they think, delay making a decision, and the seller does not have the opportunity to wait long?
In such cases, you must follow the rules of Art. 250 Civil Code of the Russian Federation. The law approves the following algorithm of actions:
- distribution (delivery) of notifications about the sale of shares;
- obtaining written foreclosure waivers;
- in the absence of refusals - wait for a month from the date of notification of each of the shareholders;
- sale of a share to a co-owner or an outsider, if no one has exercised their pre-emptive right.
Step 1. Notifying owners
Each co-owner of shared property must be notified of the upcoming sale of the share. The text of the document should indicate the name of the seller, address, technical characteristics of the object and its cost, as well as the name and address of the recipient with reference to the norm of the Civil Code of the Russian Federation, according to which the addressee has a pre-emptive right of redemption.
Documents are sent by registered mail. Fill out the inventory and the notification of delivery form - it will notify that the letter has reached the addressee and will be useful when drawing up a purchase and sale agreement.
Notices of sale can also be delivered in person; in this case, you will need a duplicate - a copy on which the addressee will sign and indicate the date. This way you will protect yourself and be able to prove that you are right if the shareholders subsequently want to challenge the deal.
Step 2. Wait a month
By law, each co-owner is given a month to think about it. If, after this period, no one has declared their right of first refusal to purchase a share in the apartment, you can enter into an agreement with any third party.
The actual value of the share specified in the agreement should not be less than the amount that was previously declared to the owners of adjacent shares. Violation of this rule will be grounds for the transaction to be declared invalid in court.
Step 3. Waiver of the pre-emptive right to purchase
When a few neighbors do not apply for redemption, and there is a buyer ready to purchase square meters, you can speed up the process - however, in this case, the good will of the residents will be required, who will agree to write statements of refusal.
Step 4. Execution of a share purchase and sale agreement
Regardless of who gets the share - a former neighbor in a communal apartment, a relative or a third party - the agreement is subject to mandatory notarization.
The norm was approved by Article 7 of Federal Law No. 172 “On Amendments to Federal Law 218-FZ “On State Registration of Real Estate” and is valid from January 1, 2017.
The rule also applies to any real estate alienation transactions involving minors and citizens with limited legal capacity.
If changes need to be made to the share purchase and sale agreement regarding the terms of the transaction, the parties enter into an additional agreement. The form of the agreement is written; it is advisable to use a sample to draw it up. The document indicates the details of the agreement, the full name of the notary who certified it, and the number of the registry entry, as well as the passport details of the parties to the transaction.
The agreement does not cancel the contract, it only changes the content of some clauses - their numbers and new conditions that come into force from the day the document is signed should be indicated in the text.
Like the main contract, the agreement is certified by a notary.
How to issue a refusal?
To register a waiver of the pre-emptive right to purchase, the seller and applicants who own the shared property must appear at the notary office with passports and certificates of registration of property rights.
This procedure will take at most half an hour, during which the notary's assistant will make copies, prepare documents and enter the applicants' data - the participants will only have to sign them and wait for notarization.
Another method is also allowed - refusal with personal presence at the registration chamber when submitting documents to formalize the transaction - but keep in mind that the share purchase and sale agreement still requires notarization.
Selling a share of residential real estate is a troublesome task, but not at all difficult. The main thing for the seller is to act legally: notify other owners of the pre-emptive right of redemption and maintain a 30-day pause. After its expiration, in the absence of willing neighbors, the owner can enter into a deal with a third party.
The co-owners have the pre-emptive right to purchase when selling a share in the right of common ownership of real estate. The right of pre-emption is that when selling a share in a common share of property, the co-owner enjoys the property over other persons who are not co-owners.
The preemptive right of purchase applies only in cases where the share is sold to an outsider. If a share is sold to a co-owner of real estate in common shared ownership, the remaining co-owners have a preemptive right to acquire the alienated share, but do not.
If several participants in shared ownership wish to purchase the alienated share, then the seller decides which of them to sell the share to.
Notification of persons enjoying the pre-emptive right of purchase of the sale of a share
In order to comply with the pre-emptive right, the seller of the share must notify the other co-owners in writing of his intention to sell his share, indicating the price and other conditions under which the share is sold.
Such a notice must indicate the address at which the property is located, who is the co-owner of the alienated share, the price at which the share is being sold, as well as other terms of the transaction.
Notice may be given in any manner that allows the seller to provide evidence of proper notice to the co-owner of the sale of the interest and the terms of the transaction at the specified time.
In practice, the following notification methods are used:
- Sending letters to co-owners through a notary.
- By registered telegram (with notification) sent by the seller. In this case, the seller must receive a certified copy of the telegram at the post office. The seller himself must send the notification telegram. If such a telegram is sent by a realtor or an employee of the company, then there must be written consent from the seller to send such a notification, since such information is confidential.
- Personal notification by the seller to the co-owners with the collection of a handwritten receipt from the co-owner and a record of familiarization with the notification.
- Obtaining a notarized statement from the co-owner refusing to purchase the share on the seller’s terms.
Often, for various reasons, co-owners create obstacles to the sale of a share and avoid receiving notification from the seller. If such co-owner refuses to receive the telegram, it is necessary for the postman to make a note that the addressee refuses to receive the telegram, only in this case will the co-owner be considered to have been notified of the sale.
However, in accordance with Article 250 of the Civil Code of the Russian Federation, notification must be made by the seller himself in writing, and therefore there is reason to believe that notification by telegram, verbally, SMS, or e-mail will not constitute proper notification.
If the co-owner is a minor or incapacitated, then notification must be sent to the guardianship and trusteeship authority and guardians.
If the seller does not know the location of the co-owner, the notice must be sent to his last known place of residence. In addition, the seller must have evidence that he took measures to establish the place of residence of the co-owner, for example, address certificates, certificates from municipal and tax authorities about the presence of arrears with this co-owner to pay taxes on this property, etc.
Article 24 of the Federal Law “On state registration of rights to real estate and transactions with it” stipulates that when selling a share of real estate to an outsider, documents confirming written notification by the seller of all co-owners or their refusal to purchase the share must be attached to the application for state registration. In this case, state registration of the right to a share in common property is carried out regardless of the period that has passed since the seller notified the share to the remaining participants in shared ownership.
If such documents are not attached, the state registrar must suspend state registration until a month from the moment the seller notifies all co-owners, if at the time of registration the month period has not expired.
If duly notified co-owners do not respond to the seller’s offer to purchase a share within a month from the date of receipt of the notification, then they are considered to have been duly notified.
When the co-owner tries to stall for time, he declares that he agrees to buy the alienated share on the seller’s terms, but subsequently does not do this himself. In such cases, this person must be sent a secondary notification in which it should be indicated that in order to complete the transaction, the buyer must appear at a specific notary at a specific time with the amount of money payable under the agreement. If he fails to appear, the deal will be concluded with another person.
Preemptive right to purchase when selling a room in a communal apartment
In accordance with Article 42 of the Housing Code of the Russian Federation, the pre-emptive right to purchase must also be respected when selling a room in a communal apartment. That is, the owners of the remaining rooms of the apartment enjoy the pre-emptive right to purchase the alienated room.
In accordance with this norm of the Housing Code of the Russian Federation, the seller of a room in a communal apartment must notify the owners of other rooms about the sale of the room. The procedure for notifying other owners of rooms in a communal apartment and the deadline for responding to it is the same as for the sale of a share.
Consequences of failure to comply with the right of pre-emption.
Clause 3 of Art. 250 of the Civil Code of the Russian Federation establishes the consequences of violating the pre-emptive right of purchase. This rule states that the interested co-owner may, within three months, demand in court that the rights and obligations of the buyer be transferred to him. This period is a special limitation period, after which you can not count on judicial protection.
In such cases, the co-owner files a claim in court with demands to transfer the rights and obligations of the buyer to himself. Such an application is paid with a state fee based on the value of the sold share. At the proposal of the judge, the plaintiff, in the course of preparing the case, must deposit into the deposit account of the judicial department or the court an amount of money sufficient to cover the buyer’s expenses for the purchase of the share, that is, the purchase price, the cost of paying duties, fees and other expenses related to the execution of the transaction. The buyer’s rights can be ensured by seizing the plaintiff’s bank account. If the plaintiff does not do this, then this will be grounds for the court to reject the claim. The defendants in the claim will be the seller and the buyer, and the third party registering authority.
If the plaintiff's demands are satisfied, all rights and obligations of the buyer are transferred to him, and the transfer of ownership of the share is registered with the state registration authority.
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The sale of a share in privatized housing is possible only if there is an official refusal of other owners from their right of pre-emption.
To avoid any disagreements in the future, it is important to formalize the refusal correctly, taking into account all the legal subtleties.
Let's take a closer look at how the procedure is carried out and what is needed to successfully waive your right of first refusal.
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○ What is a pre-emptive right?
The right of first refusal means that if the owner of a share wants to sell it, he must offer it first to other owners. Only if they refuse to buy can he put the home up for sale.
It follows that if you are planning to sell your part of the apartment, you will have to warn the co-owners in advance about your intention. It is advisable to do this in writing to eliminate the risk of accusations of non-compliance with this condition.
If the relationship with the co-owners is good, they will issue a refusal to purchase without any problems, after which you can calmly begin searching for a buyer. But if there are any difficulties in the relationship, you will have to send a registered letter with an offer to purchase and wait for a response. If it does not arrive within 30 days from the date of notification, you have the right to sell.
○ What does the law say?
The main legal act regulating the legal relationships of participants in shared ownership is the Civil Code of the Russian Federation. In Art. 250 of this law provides rules that specifically regulate the right of pre-emption.
When selling a share in the right of common ownership to an outsider, the remaining participants in shared ownership have the pre-emptive right to purchase the share being sold at the price for which it is sold, and on other equal conditions, except in the case of a sale at public auction, as well as cases of sale of a share in the right of common ownership of a land plot by the owner of a part of a building or structure located on such a land plot or by the owner of premises in the specified building or structure (Clause 1 of Article 2150 of the Civil Code of the Russian Federation).
At the same time, the Civil Code of the Russian Federation regulates not only the right of other owners to purchase a share, but also the opportunity to do so under the same conditions on which the object will be offered to a third party.
The procedure for selling a share of an apartment is also regulated by:
- Family Code of the Russian Federation.
- Housing Code of the Russian Federation.
○ Waiver of the shareholder's preemptive right.
Rejecting an offer to purchase part of an apartment means giving its owner the opportunity to conclude a deal with a third party. Let's look at how to properly formalize your refusal.
✔ What documents are needed?
You can use one of two methods:
- Write a written refusal in free form in compliance with the formal style of speech and have it certified by a notary.
- Fill out the refusal and personally submit it to Rosreestr (used least often).
In each of these cases, you will be required to:
- Personal passport.
- Title documents for the apartment confirming the fact of ownership of the share.
✔ Features of the procedure.
The opt-out process is not very difficult. All that is needed is to formalize the rejection of the purchase offer in the proper form. If the owner of the share is a minor, his legal representative will formalize the waiver on his behalf. In addition, each co-owner has three months to challenge the sale of the apartment and demand the transfer of the rights and obligations of the buyer to themselves.
If we are talking about a communal apartment, and you have never seen the owners of the remaining rooms, this does not relieve you of the need to notify them of the planned sale and receive a refusal. To do this, you can order an extract from Rosreestr, which will indicate who owns what share.
The exercise of the pre-emptive right has other features:
- It may not be observed if the share is not sold, but is changed or given as a gift.
- Even if several owners have expressed their consent to purchase a share, the transaction can only be concluded with one of them.
- The conditions under which the share is offered to the co-owners must be the same as when concluding a transaction with third parties.
✔ Sample refusal to purchase.
Although the document does not have a strict form, there are certain requirements for its completion. So, in the text you need to write:
- Address of the apartment and its characteristics (you must indicate the area of the property or its percentage of the entire apartment).
- The fact of a buyout offer indicating the cost.
- Period for consideration of the proposal made.
- Information about the person issuing the refusal (full name, contact and passport details).
- Date, signature, notary seal.
○ What are the consequences of refusing the pre-emptive right to purchase?
The pre-emptive right to purchase cannot be ceded; a written refusal must be issued. And he, first of all, threatens that the share may be sold to a third-party buyer, who will receive the right to live in the apartment.
✔ Sale of shares to third parties.
The share can be sold to a third-party buyer if the remaining shareholders have already issued a refusal to purchase or 30 days have passed since their notification of the sale. In this case, the transaction is carried out according to the standard purchase and sale scheme. In this case, the buyer has the risk:
- Challenging the transaction by co-owners who changed their minds.
- The emergence of disagreements with new neighbors.
But many are attracted by the lower cost of real estate when only a share of the apartment is sold. Accordingly, everyone determines the level of risk for themselves personally.
The concept of preemptive right to purchase. Procedure for exercising the pre-emptive right to purchase. Consequences of implementation. Consequences of failure to implement. Consequences of violation of the preemptive right to purchase. Extension of the rules on the preemptive right to purchase to other compensated transactions for the alienation of shares. Limitation of the pre-emptive right to purchase.
1. A co-owner may sell his share to other co-owners or to third parties (who are not co-owners). If the share is sold to unauthorized persons, the remaining co-owners have the preemptive right to purchase the sold share at the price for which it is sold, and on other equal conditions (clause 1 of Article 250 of the Civil Code of the Russian Federation).
The pre-emptive right to purchase a share is the right of a co-owner, inextricably linked with his personality (assignment of the pre-emptive right to purchase is not allowed).
2. Procedure for exercising the right of first refusal:
First. Responsibilities of the share seller. The seller of a share is obliged to notify the other co-owners in writing of his intention to sell his share to an outsider, indicating the price and other conditions under which he is selling it.
Second. The right of co-owners. Co-owners may express a desire to acquire a share on the same terms as an outsider.
Third. Deadlines for exercising the pre-emptive right:
Within 10 days from the date of receipt of the seller’s notice, if a share in the right to movable property is alienated;
Within 1 month from the date of receipt of the seller’s notice, if the share in the right to real estate is alienated.
3. Consequences of exercising the preemptive right to purchase - the seller alienates his share to the co-owner who has expressed consent to purchase the share. If several co-owners have expressed consent, the seller alienates his share in parts in proportion to the shares that the co-owners have.
4. Consequences of refusal to exercise the preemptive right to purchase. Refusal to exercise the pre-emptive right to purchase is:
a) active actions - notification to the seller of the share about the refusal to purchase the share within the time limits established for the exercise of the preemptive right;
b) passive actions - failure to inform the seller of the share about his intention to purchase the share.
Only in case of refusal to exercise the preemptive right of purchase, the seller of the share has the right to sell his share to an outsider on the terms that were communicated to the other co-owners.
5. Consequences of violation of the pre-emptive right to purchase. Violations of the preemptive right by the seller of a share are:
a) sale of a share to an outsider without notifying any of the co-owners;
b) sale of a share to an outsider on terms other than those set out in the notice of co-owners.
The only way to protect the violated preemptive right is for the co-owner to file a claim in court to transfer the rights and obligations of the buyer of the share to him (clause 3 of Article 250 of the Civil Code of the Russian Federation). The share purchase and sale agreement itself cannot be declared invalid on the grounds of violation of the pre-emptive right.
The transaction (in violation of the pre-emptive right) is illegal in its subject composition and, therefore, in this part should be declared invalid. But since the transaction is otherwise legal, there is no need to terminate it. It is advisable to replace the entity on the buyer's side.
(V.F. Yakovlev, 1965)
The transfer of the rights and obligations of the buyer to the plaintiff is carried out even if the share is considered to have already been transferred to the buyer. Thus, if the transfer of a share in the ownership of residential premises has already undergone state registration, when satisfying the claim, the court indicates in its decision to replace the buyer with the plaintiff in the purchase and sale agreement and to replace the buyer with the plaintiff in the entry on the right of shared ownership in the Unified State Register.
Arbitrage practice
pp. 4 clause 1.2 of the Resolution of the Plenum of the Armed Forces of the Russian Federation dated June 10, 1980 No. 4.
The period during which the transfer of the rights and obligations of the buyer of the share can be demanded is three months from the day the plaintiff learned of the violation of his right (that is, this period is the statute of limitations).
Arbitrage practice
pp. "c" clause 1.2 of the Resolution of the Plenum of the Armed Forces of the Russian Federation dated June 10, 1980 No. 4.
Arbitration courts believe that the period in question is preclusive, that is, it is calculated from the day the share is transferred to the buyer and is not subject to restoration (see paragraph 20 of the Resolution of the Plenum of the Supreme Arbitration Court of the Russian Federation of February 25, 1998 No. 8), but, from the point of view of existing practice (including the practice of arbitration courts), the position of the Supreme Court seems more correct.
6. Extension of the rules on the pre-emptive right to purchase to other compensated transactions for the alienation of shares. Co-owners have a pre-emptive right to acquire a share alienated to third parties not only under a purchase and sale agreement, but also under other compensated transactions (barter, compensation, etc.).
Arbitrage practice
Clause 7 of the Review of the practice of application by arbitration courts of Article 409 of the Civil Code of the Russian Federation (Appendix to the Information Letter of the Presidium of the Supreme Arbitration Court of the Russian Federation dated December 21, 2005 N 102).
However, it must be remembered that in these cases, co-owners exercising their preemptive right must provide the alienator with the same property as the third-party acquirer. If this is not possible (for example, when the provision consists of the transfer of a unique thing), the preemptive right of the other co-owners cannot be exercised.
7. Limitation of the pre-emptive right to purchase. There are two cases of such a limitation:
First. Judicial practice indicates that the pre-emptive right does not apply when alienating a share under a lifelong maintenance agreement with dependents, since in this agreement the identity of the acquirer of the share is of significant importance to the alienator.
Arbitrage practice
pp. "b" clause 1.2 of the Resolution of the Plenum of the Armed Forces of the Russian Federation dated June 10, 1980 No. 4.
Second. In accordance with paragraph 1 of Art. 250 of the Civil Code of the Russian Federation, the preemptive right does not apply in the case of the sale of a share at public auction, since in this case a different procedure is established that allows taking into account the interests of other co-owners (see paragraph 2 § 3 of this chapter).
Public auction is a special way of selling the debtor’s property, which has been foreclosed on by a court decision or is subject to forced sale based on a court decision.
(L.A. Novoselova)
If the auction for the sale of a share is not public, but is held at the will of the owner of the share in the right of common ownership (Article 447 of the Civil Code of the Russian Federation), then the rules on the pre-emptive right to purchase are fully applied to the agreement concluded at such auction. In this case, each co-owner has the right to demand the transfer of the rights of the buyer, who is the person who won the auction, to himself.
