Under the planned framework of the condominium building right, upon fulfilment of the conditions set out in the purchase agreement, the buyer is provided with a guarantee that they will acquire ownership of the apartment to be created in the condominium to be constructed in the future. The condominium building right entitles the holder in proportion to the ownership share that they would be entitled to if the building were constructed.
Greater security for buyers: condominium building right
In
the case of a purchase agreement for a property that has not yet been
constructed, all risks had to be borne by the buyers, the contractors, and the
financial institutions. The land registry does not guarantee the buyer’s
ownership right priority over subsequently registered enforcement rights. If
insolvency proceedings are initiated against the developer company, the
purchase price paid by the buyer may not be fully recoverable as a claim
against the developer. The condominium building right would eliminate this
risk.
The
holder of the condominium building right may exercise the rights of
mortgagees in the event of enforcement proceedings against the property or in
the event of the liquidation of the obligor of the condominium building
right (the developer), up to the amount of the purchase price or purchase price
instalment paid by them. If it is not possible to fully satisfy all entitled
claims, the claims of the entitled parties must be satisfied in proportion to
their respective ownership shares.
The consideration paid for acquiring the condominium building right is included in the purchase price. The condominium building right may be transferred (sold): the previous holder, the party acquiring the right, and the obligor agree that the rights and obligations of the former holder under the purchase agreement shall be transferred to the party acquiring the right.
