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Premises sale
(non-residential fund).
Buy an office, a storehouse, or a shop.

Premises sale is very much different from premises lease. The bulk of offers in the secondary market are investment acquisitions. However, only the deals that were made by major Russian or foreign companies become well-known. In many cases companies do not disclose information on premises sale as residential premises sale in order not to attract attention of tax authorities. Even now, there exists the cash method of payment in this market.

Usually, purchase process begins with selection of an object that would comply with the customer's requirements. Then preliminary negotiations begin. During this period the object is shown to the customer and different financial issues are discussed. According to some experts, the party interested in making the deal usually hires some independent estimators to confirm the purchase price. If both parties came to the agreement at this stage then they conclude the so-called engagement agreement and move to the next stage which is a check stage.

If purchase and sale deal is made in the secondary market then you need to take into account a number of important legal and financial aspects. For example, it is very important to check 'legal clearness' of a premise. All previous deals with the object should have been legitimate. You should have clear understanding of privatization process of the object and be sure that the law was not broken during this process. As the past experience shows 90 privatization deals out of 100 were made with different violations, and sometimes criminal cases were initiated.

Real estate is one of the most popular bank loans. So you should ensure that your future office is not hypothecated. Also, while this premise was in use for many years it could undergo some critical changes for potential customer, such as removal of some walls or partitions, transfer of doors and some other alterations. You should ensure that the owner has the relevant permits and agreements for all changes and deviations from the initial plan of the Technical Inventory Bureau. When making a deal, if you find out that the changes were not legal then it can lead to paying a fee.

In the primary market the situation with premises purchase and sale is a bit better as there is no surprising past. However, here you also can not do without checking appropriate title documents such as tenant right for land plot, building permit, fulfillment of obligations before city authorities, etc.

Of course, when it comes to investment deals this stage becomes longer as due diligence is performed. If a customer performs due diligence according to the rules and all global standards it will take more than a year to perform it, and not everyone can afford it. Very often most of purchase and sale deals are completed in one or two months, however due diligence is not performed to the full extent, and the deal is made due to the trust of a customer or customer's consultant to the seller. It brings certain risks but in general helps to avoid decrease in profitability of an object which is a result of long due diligence process.

Premises sale is implemented by means of purchase of a legal body which is registered as the building's owner, and not by means of real estate purchase. If the building is rented by several lessees who have their lease agreements concluded it means that in this case the whole business is purchased. Such deal is legal and it aims at taxes decrease. Legal body which becomes the new owner of this building does not have any other liabilities. The deal means that 100% of company's shares are bought.

However, many deals in the market are made by concluding purchase and sale agreements. Very often the price in the agreement is admittedly understated, and the main amount of money is paid "in brief case". Basically, the amount of black money in the market decreases. The market now tends to use the clearer cooperation schemes.

The final stage in this process is signing purchase and sale agreement and finalizing all relevant documentation. This stage includes registration of a real estate object in the Moscow Registration Authorities and preparation of new certificate as well as re-execution of land lease agreement to the new owner in the Moscow Land Committee. Premises sale with the help of our specialists will let you forget about strategy and tactics chosen to implement your plans with regard to commercial real estate sale.

Special offers: Special offers: Sale of residential and commercial real estate
 

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