Preliminary contract for the sale of the right to build

 

 1. Preliminary contract through which the owner of a plot establishes the right to build in favor of a builder against whom the owner receives a certain compensation - apartments, garages, shops, etc. in the future building. This type of contract is not regulated by the legislation in force, and in the theory may be encountered under different names - a contract for construction against apartments, a contract for indemnification of an apartment owner and many others. Establishing the right to build in favor of one person against the obligation to build any objects in the future building is one of the most secure ways for the landlord to protect himself against possible misuse by the builder.

Often, this type of contract creates major problems for the owner of the property or for the superficer. There are also a few cases where this type of contract is the primary reason for concluding preliminary contracts under which the right-holder is trying to secure funds against the transfer of an object that will occur later - once the building has been built built, ie. after the specific object occurs. The use of pre-contracts in this case is convenient because the builder receives a portion of the amount for the site in advance, and the purchaser receives a traditionally lower price when making contributions for a not yet built dwelling (studio, garage, shop, etc.) .

 

 2. Preliminary contracts for the sale of the right to build

In recent years, pre-contracts for the sale of the right to build have been particularly popular. This form of settlement of the bond deal between the parties quickly gained popularity and is currently widely used by developers to initiate the "green sale" procedure.

What is the economic logic of the builders benefiting from the legal form in question? Why do they sign a preliminary contract for the sale of a right to build and what do they achieve when concluding a final contract? We should pay attention to the Value Added Tax Act4 (VATA), which provides as a matter of principle the following: land-related supplies are exempt - VAT is not levied on them. Exempt supplies related to land within the meaning of the VATA are the transfer of ownership of land, the creation or transfer of limited real estate rights over land, the letting of land for rent or lease. In this sense is the provision of Art. 45, para. 2 VAT - the establishment or transfer of the right to build is considered an exempt supply until the construction of the rough building.

However, we should ask the question: does this procedure proceed lawfully? Is it possible for the obligation to sell a right to build to be the subject of a preliminary contract and, if possible, by what date can the final contract be concluded?

In most cases, pre-contracts deal with the sale of a building right to build an object in a building that is specified in detail - with area, location, neighbors, etc. Against the seller's obligation to sell the right to build, the buyer must pay the sale price under certain terms and conditions. Traditionally, the terms of the contract provide for the payment of the right to build in accordance with the notarial deeds required by the law after payment of the price.

 

 3. Legal restrictions on the transfer of the right to build

In view of the buyer's security of the future site, the last part of the sale price according to the preliminary contracts described above is paid around the final moment of construction of the building - existence of a finding act for a rough construction - a certificate under Art. 181, para. 2 of the Spatial Development Act, acceptance of the site - model 15 or introduction of the building into operation - model-form 16.

In this case, the start of the counting of the deadline for concluding a final contract starts with the issuance of an act of a competent state body. This act, however, aims to establish a certain stage of the construction. In the hypothesis considered, the particular stage is very important. This is because the law binds the moment when the right to build can be the subject of a transfer transaction6. This is specifically about Art. 181 SPA. According to par. (1) of that provision, "the right to build a building or part of it may be the subject of a transfer transaction from the time of its incorporation to the completion of the building in a rough construction". The consequences of the observation of the specific stage of the construction are expressed in the law provided by the law, according to which "after completion of the building in rough construction, established by a protocol of the municipal (regional) administration, the object of a transfer transaction may be the only built building separate parts of it ".