Buying an apartment in a new building before registration - which risks are you facing?

Buying an apartment is the biggest life investment for most people. That is why it is crucial to understand all the risks that accompany the purchase of an apartment in a building that does not yet have an occupancy permit and where the apartment is not registered. Below we give you a detailed explanation of why such a purchase can be more expensive than it seems, not only in money, but also in nerves and legal certainty.

What does it mean to buy an apartment without a use permit and registration?

When you buy an apartment in a building that has not yet received a use permit, it practically means that the state has not yet confirmed that the building was built according to the laws and that it is safe for life. Without that document, technically speaking, living in that building is not allowed. Without a use permit, the apartment cannot even be registered, which means that you are not legally recognized as the owner - regardless of the fact that you notarized the contract and paid for the apartment. The registration is the only official proof of ownership in the cadastre, which gives you the right to dispose, sell or leave the apartment as an inheritance.

What are the biggest dangers for the customer?

Buying an apartment without a use permit and registration can have serious consequences. Without registration, you are not the legal owner, but only a "business partner" of the investor. Banks generally do not approve loans for such apartments (banks are ready to approve a home loan if 80% of the building has been built), or they offer less favorable terms, because without legal certainty, even the bank cannot be charged through the mortgage. In addition, there is a risk that the building will never receive a use permit, especially if the investor did not build completely in accordance with the project. In the worst case, the competent authority may demand the demolition of illegal parts of the building. Also, an apartment without these documents is difficult to sell, and even if you decide to leave it as an inheritance, your heirs may have serious legal complications.

How to prepare for buying an apartment under construction?

First of all, familiarize yourself in detail with the available documentation, above all with the existing construction permit. On the website of the Central Registry of Unified Procedures (CEOP), you can follow the construction of the building, as well as submitted requests and issued permits. Make sure of the investor's reliability, especially through a portfolio of successfully completed (and registered) buildings. Hire an expert, an agent who will do all the checks for you, collect the necessary documentation and investigate in detail the status of the building under construction. Secure yourself through a pre-contract and a contract for the purchase of an apartment under construction, with investor guarantees and penalties for failure to fulfill the conditions of purchase and sale.

What if you have already bought an apartment in a building without an occupancy permit?

If you have already found yourself in the situation of buying an apartment in a building that does not have a use permit, it is not the end of the world - but the situation is serious. First, check with the competent municipality or the Secretariat for Urban Planning at which stage the procedure for issuing a permit is. It often happens that it is only necessary to supplement the technical documentation or perform an additional inspection. Team up with other tenants – as a tenants' assembly or a legal entity – and try to jointly "push" for the permit (sometimes only a supplement to the technical inspection is required). If the investor will not cooperate, you can sue him (if he is still active) - especially if the contract states that he is obliged to obtain a use permit. And of course, hire an expert, who will help you protect your rights during the registration process.

Bottom line: Don't ignore the problem, because it won't go away

Buying an apartment without an occupancy permit and registration is like buying a car without a traffic license and technical inspection - you may be able to drive it, but you will never be sure that it is legal and really yours. If you haven't bought an apartment yet, choose those with proper documentation and registered ownership. If you have already bought an apartment in a building without a permit, follow the status of the procedure, protect yourself legally and never ignore the problem. It will not resolve itself, but with an active approach, legal assistance and cooperation with other tenants, you can significantly reduce the risks and find a solution.