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Ukrainian Supreme Court on “legalizing real estate with obstacles”

The Ukrainian Supreme Court helped the investor! With the conclusion in case No. 761/5598/15-c of 04.24.2019, he recognized his legal rights in court!

History in detail

In 2003, an individual investor and a legal entity-developer entered into an agreement on equity participation in the financing of construction. The parties undertook to work together to achieve a common goal – the construction of an apartment building for its commissioning.

  • The object of equity participation was the “kopeck piece”, for which the investor undertook to pay a little more than 70 thousand USD in national currency at the exchange rate within 10 banking days from the moment of signing the agreement, which was done.
  • The developer undertook to complete the construction within the specified timeframe, but “did not calculate” his strength. The investor reacted to this “with understanding” and they signed an additional agreement, extending the construction period.

An investor’s patience was rewarded in 2014!

“The parties drew up an act of acceptance and transfer, according to which the developer handed over and the investor accepted a two-room apartment, but … In this situation, the desire of the “newly-made” real estate owner to complete the acquisition at the registration service ended up being denied registration of ownership of the apartment.”

The investor went to court with a claim for the recognition of the property right to housing!

  • The court of first instance satisfied the claim. The decision was made on the basis of the fact that the plaintiff cannot exercise his rights due to the defendant’s failure to submit the documents necessary for the registration procedure to the registration body.
  • The appeal made the opposite decision. She motivated it by the fact that the defendant does not dispute the acquisition of the plaintiff’s property rights to the construction object, therefore, there is no dispute between them in this regard in nature.

Ukrainian Supreme Court agreed with the court of first instance!

The cassation court argued that the plaintiff was correct as follows:

  1. Everyone has the right to protection of the violated, unrecognized or contested right (part 1 of article 15 of the Civil Code). In the analyzed case, the plaintiff’s right is violated by the fact that he is deprived of the opportunity to exercise it in full or in part.
  2. When challenging / recognizing a right, uncertainty arises in it, caused by the behavior of another person and giving rise to uncertainty about the application of a specific method of protection. In this case, Art. 16 GKU secures for the plaintiff the right to choose the method of protection.
  3. According to the law, an effective method of protection must restore the violated right, and if it is impossible, guarantee the possibility of obtaining compensation. That is why the plaintiff has the right to choose, including to protect the rights (interests) in court by recognizing them in court.

10.02.2020

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