The Higher Arbitrazh Court of the Russian Federation provided clarifications on the issues related to the agreements on future real estate properties

The Higher Arbitrazh Court of the Russian Federation indicated that it is possible for enter into sale and purchase agreements in respect of real estate properties that would be constructed in future. Future real estate can be individualised by means of specifying its location, approximate area, other characteristics and qualities determined, in particular, in accordance with design documentation. Moreover, individualisation characteristics can be specified not only in the agreement itself, but also in the transfer and acceptance act to be executed after construction of real estate property.

If a preliminary sale and purchase agreement provides for the payment obligation, such agreement should be regarded as the principal sale and purchase agreement in respect of future thing.

According to the Higher Arbitrazh Court of the Russian Federation a sale and purchase agreement in respect of future residential premises does not require the state registration and is considered to be concluded upon its execution by the parties thereto.

The highest instance court specified that rules regulating sale and purchase agreements, contractor agreements, special partnership agreements, etc. shall be applicable to the investment agreements providing for the real estate construction. Moreover, as a general rule it is proposed to consider investment agreements as sale and purchase agreements in respect of future things. Consequently, the investor which is not acting as the developer shall not be vested with the property right to the real estate being constructed.

The Higher Arbitrazh Court of the Russian Federation has also clarified other provisions of the legislation related to the rights to the real estate properties and transactions therewith.