About preliminary purchase agreements

As from my practice I see several common MISTAKES, made by property buyers:

Not reading your preliminary purchase agreement at all

That's absolute nonsense, but believe me, some people buy without reading the clauses of their preliminary agreements. There are"traps" set buy the property developer which entitles him either to delay without paying a penalty or to decrease your chance of terminating the agreement.

Signing without being sure want you sign

If you have ANY doubts that the preliminary agreement clauses are vague or you don't understand part of it, you should NOT sign it. Instead, find a lawyer who can clear the clauses for you.

Accepting a lawyer, recommended by the seller (developer)

That's an absolute MISTAKE! A lawyer should act in your favour, therefore he/she should not be connected to the seller in any way. Always pick up a lawyer who is not connected to the seller. Then you will have a clear and independent legal advice.

Preliminary agreement makes me confident

You should not fool yourself that once you've signed a preliminary agreement, the property is almost yours. The preliminary agreement is a "promise" to conclude the final contract (the title deed). It is a regular contractual relation and does not create some special connection between you and the particular property. Usually a bank has mortgage set over the property, which entitles the bank with more rights over the property than you have (on the basis of the preliminary agreement).

Transferring the property at the stage of Act 15 (no electricity and water)

Usually the developer sets a clause, stating that the property ownership will be transferred at the stage "rough construction" or "shell construction". This means that the building will be transferred without being accepted by the Municipality construction audit commission. Consequently you will have a property without (or at least not legally connected) electricity, sewerage and water supply.  Therefore, again, my advise is NOT to sign without independent lawyer consultation.

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