It's easy to get lost among the dozens of pages and hundreds of clauses in a new apartment purchase contract. When it comes to buying an apartment , the amount of small details is enormous, so we've compiled here the five things you should pay attention to before signing the contract:
What does the apartment price include: Are you clear about what the apartment price stated in the contract includes? And more importantly – what does it not include? To understand what costs you will be expected to incur later, check, among other things, whether the following components are included in the price:
- Warehouse or parking lot – also check their size and whether they are close to each other.
- 'Development' expenses such as a road, sidewalk or fences.
- Connection to electricity, gas and water infrastructure.
- Registration in the land registry.
As you will see below, changes in the technical specifications also affect the final price. Usually the price of the apartment is linked to the construction input index, so the amount you actually pay will probably be different from the price stated in the contract. In addition to the price of the apartment, you will have to pay fees to the contractor's lawyer, usually at the rate of one and a half percent before VAT.
Payment terms : Pay attention to the payment arrangement detailed in the contract before you. Most of the time, the payment dates will be in accordance with the construction stages – starting from the first construction stages, such as completing the construction of the floor on the first floor, through the stages of the skeleton of the building, the apartment, plastering, exterior cladding, and until the delivery of the apartment. Please note that the contractor must provide you with collateral, usually through a bank guarantee or insurance policy, and that the payment is transferred directly to the bank that is financing the project.
Technical specifications : According to the Sales Law, technical specifications of the apartment must be attached to the contract, including details about the apartment's area, division and dimensions, building materials, infrastructure such as electricity, communications and air conditioning, and finishing work including doors, windows, sanitary ware, and so on. Often, the specifications offered by the contractor are basic and include the cheapest materials on the market. If you want to make changes to the specifications, it is important that you do so before signing the contract. Ask for the price list of changes, so you can get a better picture of the total cost of the apartment after the changes.
Delivery date : One of the important clauses in the purchase contract is the date of receipt of the apartment. Note that the contract defines a final delivery date, as if 60 days have passed from this date and you have not yet received the apartment, the contractor is obligated to compensate you according to the Sales Law in rent starting from the specified delivery date. Check whether there are clauses that specify what delay is considered a 'justified delay' that allows the contractor to postpone receipt of the apartment without compensation. If you choose to make changes, they may affect the date of delivery of the apartment. Check carefully that there is an explicit reference to this in the purchase contract.
Breach of Agreement : Of course, we strive to reach the moment of handing over the apartment and receiving the long-awaited key, but sometimes plans can go awry, and breaching the agreement can have significant financial consequences. The breach of agreement clause usually includes compensation costs to the contractor for the breach, but you should make sure that you are also covered in the event that the contractor does not meet the obligation, if he presented you with false information or if he violated the regulations set forth in the law. Also, if the delivery date is delayed beyond a certain period, you should make sure that you can cancel the agreement.
After you have made sure how each of these issues is reflected in your contract, you can sign with peace of mind!
