Legal guide: how to terminate a temporary contract and get your money back?

When deciding to become a participant in shared construction, you first need to very carefully study the developer with whom you will be dealing. It is important that the client is offered to sign a shared construction agreement. After all, its signing imposes certain obligations on all parties: the developer must provide the shareholder with specific housing, prescribed in the DDU, of the declared quality, and the shareholder undertakes to pay the agreed amounts within the terms specified in the contract in payment for future housing.

When can the termination of a DDU with a mortgage be terminated on the initiative of the shareholder?

It would seem that everything is simple, but the situation becomes more complicated when borrowed or credit funds are used to pay for the DDU. This type of lending is also called a mortgage.

In this case, compliance with all conditions of the DDU on the part of the developer becomes especially important for the client, because he not only pays money, but also overpays interest. If it happens that the terms of the contract were nevertheless violated, the quality of the housing does not correspond to what was declared, then the way out of the situation may be termination of the DDU at the initiative of the shareholder. In this case, the developer is obliged to return all amounts paid, but what if a mortgage was taken out when signing the LDU?

Termination of a DDU with a mortgage at the initiative of the shareholder has its own subtleties. In this case, the reason for changing your mind or not liking the area cannot be accepted as justified.

Indeed, in a DDU with a mortgage, in addition to the parties the developer and the shareholder, there is also a bank, which has the DDU listed on its balance sheet, and all possible actions are limited by the encumbrance. In such a situation, monetary losses can be quite significant.

And yet, in order to answer the question of whether it is possible to terminate a tenancy agreement with a mortgage, you need to determine in what cases termination is generally possible:

1. The main reason is most often problems with the timing of delivery of the finished facility and its commissioning. What is meant here is that the building not only must be built, it must be suitable for habitation. Also, an unscrupulous developer may simply not complete the construction of the property, leaving it for an indefinite period. In case of litigation, these facts will have to be proven through an examination in order to return the money already paid.
2. It is possible to terminate the DDU if the developer has changed the cost of housing by increasing the square footage or changing the project without prior agreement, unilaterally.
3. If illegal actions are detected on the part of the developer, the shareholder has the right to demand termination of the DDU. Such actions include double sale or refusal to register the DDU with the relevant authorities.

The shareholder should know that unilateral termination of the contractual agreement with the developer is possible only through the court, which will be able to determine the procedure for returning the amounts paid.

Termination of an equity participation agreement: how to get the money back?

But almost half of the terms specified in the agreements do not correspond to reality: at best, housewarming is delayed by a couple of months. At worst - for several years. “Deposit” at 20% per annum What to do if the date of transfer of the apartment is overdue, the house is not ready, and the developer “feeds breakfast”? There are two options: either wait patiently for the housewarming party, or terminate the contract. According to the law, if the developer missed the two-month deadline for transferring the property provided for by the DDU, the buyer can terminate this document and return his money (clause

How to terminate a DDU?

The question of how to terminate the DDU with a mortgage and return the money is very important if such a decision is nevertheless made. The correct algorithm of actions can speed up the process and make it less painful. The equity holder should be prepared that the whole procedure takes some time, and all actions must be within the framework of the law and confirmed on paper or other media with the necessary marks.

Therefore, you need to do the following:

• You must contact the bank with a statement of desire to terminate the DDU on your own initiative. The application must clearly set out the reasons for the decision. There are two ways to send a letter to the bank, this is to deliver it yourself, with receiving a visa on the application and making a copy, and the second, preferred method is delivery by registered mail;
• At the same time, you need to request from the creditor a certificate of the amounts paid and the balance of the debt with the details of the credit account;
• If the parties have agreed to resolve the issue of terminating the contract without the participation of the court, then a letter is sent to the developer’s address indicating the details of the credit account and the amount to be transferred to it, and the details of the second account for the transfer of the shareholder’s own funds. When faced with the fact that the developer ignores the shareholder’s request to terminate the DDU, it is necessary to go to court. In this case, the shareholder has the right to include in the statement of claim the amount of interest paid as losses incurred due to the developer’s failure to fulfill its obligations.

The shareholder's appeal to the court for help must be formalized in compliance with all legal norms.

Termination of the DDU agreement for a mortgage

If obstacles arise on the way to obtaining an apartment in a new building, shareholders are interested in whether it is realistic to terminate the equity participation agreement for the mortgage. Since, in addition to the developer and failed new residents, a bank (whose housing is pledged) is involved in the process, the order of relationships between the parties to this “triangle” is interesting. Lawyers from YurConsult, who have more than 7 years of experience in supporting controversial cases in the construction industry of St. Petersburg, will help you understand the situation and make the right decision.

Help from the judiciary

Unfortunately, not all developers comply with the law on pre-trial dispute resolution, especially when it comes to returning funds to their clients. In this case, the only option is to go to court.

We recommend that you read:

What points should you pay attention to when signing a DDU?

In this case, the procedure will be as follows:

1. The statement of claim must be drawn up correctly and substantiated. To do this, you can contact a professional lawyer or lawyer, and you can also call on the Internet to help.
2. Make copies of all pages of the DDU.
3. The claim must be accompanied by documents confirming the non-fulfillment of the terms of the agreement on the part of the developer, which resulted in the need for unilateral termination.
4. You also need to attach documents with calculations that show the total amount to be recovered in favor of the equity holder.
5. And the last thing is copies of the package of documents that were signed when registering the DDU.

A prerequisite for a positive court decision in favor of the shareholder will be the strict and timely fulfillment of all obligations assumed when signing the DDU. After all, if the developer files a counterclaim, he can justify his refusal with any little detail that the shareholder missed at some point.

After the court makes a decision in favor of the plaintiff, the developer has 10 days to return the amounts specified in the court order. Otherwise, you need to contact the bailiffs.

Additionally, you need to take into account the loan agreement, which often states that after the termination of the LDU, the borrower is obliged to repay the balance of the loan, or, conversely, he can use these funds to purchase other real estate with the subsequent registration of an encumbrance for a new purchase.

DDU with the participation of maternity capital and mortgage, as well as military mortgage

Solving the question of how to terminate a temporary trust agreement with a mortgage and maternity capital and return the money will be difficult and problematic.
In this case, the main problem will be in maternity capital. It is issued once, and if it is returned back to the Pension Fund, which will be difficult to avoid, it may not be possible to use it again. Therefore, a preliminary consultation with the pension fund would be correct. After all, the participation of maternal capital in the transaction obliges the children to be given shares. Otherwise, you will have to deal with the prosecutor’s office and account for the misuse of government subsidies. As for funds borrowed from the bank, the balance of the debt on it will be transferred to the bank using the specified details.

Termination of a DDU with a mortgage is a very troublesome and ambiguous task, however, this does not mean it is impossible; sometimes the equity holder manages to resolve all issues with the developer peacefully, without any trial. Reaching such agreements is called an agreement of the parties. The situation is the same with regard to military mortgages.

True, in this case, the DDU is also on the balance sheet of the Federal State Institution “Rosvoenipoteka”.

The following actions are carried out:

• the developer returns the funds to the bank account;
• The bank transfers the received money to the FGCU account.

Here the serviceman has no rights to any amounts, unless he contributed his own funds, which is extremely rare.

Agreement for shared participation in a new building

In this regard, lenders most often agree to interact only with trusted accredited organizations. Thus, a military mortgage under the DDU is a rather risky transaction, since we have heard more than once about “defrauded equity holders.” Here a situation may arise where the proposed apartment design differs from the one received, or there is a risk of purchasing an apartment that was previously paid for by someone. Conclusion and termination of the DDU The procedure for purchasing housing under the DDU has certain features. We recommend reading: Drawing up a residential lease agreement

Agreement of the parties

In situations where the developer is a reputable organization, and the shareholder, for justified and objective reasons, requests termination of the LDU, despite the bank’s participation in such an agreement, it is possible to reach an agreement out of court. To do this, you need:

• notify the creditor by means of a statement and a parallel request for a certificate of interest paid and the balance of the debt;
• submit an application to the developer, which clearly states the reasons for termination and details for the return of amounts paid.

If the company already has such a practice, then the shareholder is informed of the possibility of signing an agreement on termination of the DDU, which will indicate the terms for the return of funds. In the future, such an agreement must be registered with Rosreestr.

Upon termination of the contract, if the developer offers the option of returning the funds received after resale of the subject of the contract, then this fact should not be misleading. In this case, you may not receive anything at all, and still remain in debt. Also, you should not follow the lead when the developer postpones the transfer date day after day in violation of his own obligations.

Consequences of termination of the DDU with a mortgage at the initiative of the shareholder

Termination of a DDU with a mortgage can entail quite serious consequences for the shareholder, because he is still a borrower from the bank.
Before making a decision on termination, it is necessary to study the loan agreement, so that according to it, even if the borrower is no longer a participant in shared construction, loan obligations are not removed from him. Most often, the loan agreement is not directly tied to the LDU, and its termination does not oblige the lender to expect the return of the funds paid by the equity holder from the developer. That is, he may demand full early repayment of the balance of the debt. It is equally important to know that as long as the mortgage record is not repaid, the bank has the right to the collateral, which the borrower is obliged to provide.

We recommend that you read:

What is the difference between an agreement for shared participation in construction and a housing cooperative and which is better?

When considering the issue of termination of the DDU, the shareholder needs to carefully assess the financial condition of the developer. Indeed, in the event of bankruptcy, the risk of being left without compensation while the trial is ongoing is very high. At the same time, during the period of returning the money to the shareholder, he, in fact, remains both without funds and without the collateral, which, again, in the event of the developer’s bankruptcy, can be sold, thereby compensating part of the costs.

Another reason for a balanced approach to the termination of the DDU is the losses of the shareholder, namely:

• expenses associated with paying interest on the loan;
• costs associated with the process of obtaining a mortgage, such as assessment and state duty for registering a residential property;
• the difference between the amount paid and the market value due to price changes. For example, we can consider the last three years, when prices rose sharply and then began to decline again;
• expenses associated with the services of third parties, if any (example: real estate services).

It is very difficult to guarantee the return of all these expenses, even through court.

Unilateral termination of the tenancy agreement by the shareholder

Please note: the amount of state duty paid is determined for such cases depending on the excess of the claim price by 1 million rubles. Subparagraph 1 of paragraph 1 of Article 333.19 and paragraph 3 of Article 333.36 of the Tax Code. agreement on termination of the agreement by agreement of the parties on unilateral termination of the agreement by the shareholder and the metro Answer: When terminating the agreement, the court has the right to reduce interest under Article 333 of the Civil Code of the Russian Federation, which is why so much in this matter depends on the court and on your representative in court. .

When a DDU with a mortgage at the initiative of the shareholder is impossible

Despite the fact that the shareholder has the right to terminate the DDU at any stage, there are situations when this still becomes impossible.
More precisely, after signing the acceptance certificate, especially after the warranty period has expired. You also need to know that the LDU cannot be terminated without the consent of the developer in the case when he complies with all his obligations without violating the current legislation. It is not a fact that even a trial will have a positive result for the shareholder.

An essential condition for the termination of the DDU is the grounds specified above.

It should be taken into account that the developer also has rights that he can use:

• submit a counterclaim with demands;
• eliminate violations on the part of the shareholder.

After all, different situations happen to each person, and it is not always possible, especially over a long period of time, to predict one’s own financial situation.

Additionally, it is worth saying that if the DDU is terminated, it is necessary to record this fact with the authorities for registering rights to real estate. This must be done in accordance with current legislation and in the prescribed manner.

Legal documents on the topic

• Civil Code of the Russian Federation (Chapter 2, 42, Article 9, 15) https://docs.cntd.ru/document/9027690/
• Civil Code of the Russian Federation, ch. 23 https://kodeks.systecs.ru/gk_rf/gk_glava23/
• Article 222 of the Civil Code of the Russian Federation may be considered if the developer illegally erects buildings on the territory adjacent to the declared building, thereby violating the contractual rights of shareholders;
• Article 556 of the Civil Code of the Russian Federation “Purchase and sale agreement: Transfer of real estate” can be used if the shareholder wants to terminate the DDU after signing the apartment acceptance certificate.
• Federal Law “On the Protection of Consumer Rights” https://docs.cntd.ru/document/9005388/;
• Federal Law “On Mortgage” https://docs.cntd.ru/document/901712928/
• Federal Law-214 “On participation in shared construction” https://docs.cntd.ru/document/901919587
• Arbitration Procedural Code of the Arbitration Procedure Code of the Russian Federation, Chapter 28 “consideration of insolvency (bankruptcy) cases” https://kodeks.systecs.ru/apk_rf/apk_glava28/

• Video #1
• Video #2
• Video #3
• Video #4

Video #1

Video #2

Video #3

How is a DDU with a mortgage repaid at the initiative of the equity holder?

In order for the terminated DDU to be finally canceled or extinguished, it is necessary to enter the relevant information into the register of rights to real estate.

To do this, you need to contact the local branch of Rosreestr or the MFC with an established package of documents, which includes:

1. Statement
2. The document on the basis of which the DDU was terminated.
3. A notice confirming the desire to terminate the DDU, since this happened unilaterally.
4. The applicant’s passport; if there are several, then everyone’s passport is needed.
5. Notarized consent of the spouse to the transaction, if there is a marriage.

It may seem that this is enough, but in the case of a mortgage there is an encumbrance, and a package of documents is required from the bank, and more specifically a mortgage note with a note that the debt has been repaid. This document is the main one.

Among other things, you will need a power of attorney from the bank so that the shareholder can independently sign the application on behalf of his creditor. If the bank does not hand over the required package to the borrower, then an authorized person of the bank must appear at the registering authority as a pledge holder.

Anyone who is planning to participate in shared construction, especially involving a mortgage, is simply obliged to weigh the pros and cons. Unfortunately, very often among developers there are unscrupulous companies that are aimed only at making a profit.

Under no circumstances should you rely solely on the opinions of others. It is necessary to carefully study the company’s reputation, the availability of all documents for the proposed new building, assess the financial situation and familiarize yourself with standard agreements with shareholders.

It is also important to study the legal framework on your own, in case you still have to resort to radical measures after signing the agreement. Its registration with government agencies is no less important. A situation where the developer evades this may put the future shareholder on guard. Well, if, having already become a dissatisfied shareholder, a decision has been made to terminate the DDU, it is very important to carefully weigh everything, consult with the creditor and a lawyer, and only then make a final decision.

What is the essence of termination of DDU according to the law?

A developer is investing millions to build a multi-story building. Quite often, the required amount is secured by a bank loan. To facilitate and speed up construction, money from shareholders is attracted. People who are ready to pay rent for their apartment during the entire construction period risk being left without funds and without real estate. In 2020, the Duma is increasingly raising the issue of banning equity participation. This is facilitated by an increase in the number of bankrupt construction companies. The final bill has not yet been finalized, but Russian citizens are strongly recommended to:

1. Carefully check the developer company and its rights to construction, land lease and financial situation. It is advisable that you sign contracts with time-tested companies with solid financial support.
2. If you have any questions regarding the conclusion, and especially the termination, of a contractual agreement, contact lawyers specializing in the construction and contractual field. This is important because, after all the checks, if the court makes a verdict not in your favor, then the case will not be reconsidered.
3. In the legislation of the Russian Federation, when terminating a DDU, the grounds are used according to the Civil Code of the Russian Federation (Chapters 27, 42), the Federal Law “On the Protection of Consumer Rights”, the Federal Law “On Mortgage”, the Federal Law “On Participation in Shared Construction”, and other acts and laws. It is not necessary for a person without a legal education to know how all the clauses of different laws interact with each other. But qualified actions are needed in court.

Important! From July 1, 2020, the money that shareholders transfer to the developer is blocked in a special account (escrow account). Only upon completion of construction are funds transferred to the developer.

This measure is aimed at protecting shareholders in the event of bankruptcy of the developer or failure to deliver the property on time.