Before concluding a purchase agreement, it is necessary to verify the legal status of the property. A legal audit should be carried out both when purchasing for business purposes, as well as when purchasing for residential purposes.
The scope of the audit should be adjusted to the specific transaction. I do not conduct theoretical analyses that will not help you make a decision on the purchase of a particular property. I analyze legal status of a property only to the extent necessary to minimize legal risks of a particular transaction. I clarify what are the risks that I have identified and suggest ways to eliminate them in order to complete the transaction.
The basic report includes:
The full report includes:
The full report and negotiations include:
The cost depends on how complicated the case is.
Before we begin, I review the details of the property and proposed transaction. Then I provide an explanation of the necessary scope of legal analysis of the property, in order to cover all the issues that need to be verified to protect the interests of the buyer. However the audit should not be too extensive when it is not necessary – not every property requires a complex and expensive audit. In such cases I recommend a basic audit.
I provide the exact cost of the audit after reviewing the details of the case.
Most often, a property legal status audit is ordered by a buyer. However, it is becoming common for sellers and real estate agents to ask for a legal status report.
It appears that it is often easier to sell a property having a legal audit, since an offer supported by a legal status report is more credible to potential buyers.
Furthermore, in the course of preparing an audit, it may appear that the legal status of the property needs to be regulated before it can be sold. Selling a property with legal issues is often impossible because potential buyers carefully examine properties before making a purchase decision.
No, the land and mortgage register will not include information regarding the property’s permitted use, conditions of sale, etc.
An audit of the legal status of a property must cover at least the scope specified in the basic report described above.
The list of documents and information required to verify the legal status of a property is not always identical. After reviewing your case, I will prepare a summary of required information and documents.
The most common audit activities include an analysis of the land and mortgage register in order to determine: who the owner of the property is, whether there are mortgages or any easements on the property, etc.
If you are purchasing an undeveloped plot of land with an intention to build on it, I also verify the local development plan to make sure whether a specific type of construction (e.g. single-family house, production hall, housing complex) can be built on the land.
The above examples are just a small sampling of the steps that need to be taken to properly analyze legal status of a property.
It is impossible to describe how tostep-by-step conduct a legal audit of a property because there are too many possible configurations of documents and circumstances.
For example, a property legal status examination may involve verifying such items as:
Before purchasing a property for investment purposes, it is recommended to carefully check whether it is possible to conduct the planned investment on a particular plot of land, and what costs would be associated with it.
Verification of the conditions of a property (combined with verification of its legal status) includes, depending on the specific case, such issues as:
Yes, since an analysis that only describes the condition of the property but does not explain what to do next cannot be considered a useful tool. The plan of further actions depends on the purpose of the report.
The content of the plan is a step-by-step guide to accomplishing the intended result (e.g. building a production hall, implementing a development project, etc.).