Some time after signing the act of acceptance and transfer of the apartment, defects appear in it, which the developer is obliged to eliminate. If the deadline has expired, then the buyer of housing can sue the developer and demand a penalty in the amount of 1% of the cost of the apartment for the day of delay
Amendments are coming into force in Russia that radically reduce the amount of penalties for late elimination of deficiencies in apartments in new buildings. In Moscow and the region, litigation with developers has turned into a large-scale business.
It is not uncommon for new buildings to have a story: some time after the delivery of housing, that is, the signing of the act of acceptance and transfer of the apartment, defects appear in it. For example, the doorway is skewed, the window frame is cracked, the tiles are crumbling or, even worse, there are leaks. During the warranty period, the developer is obliged to eliminate these defects within a reasonable time, which, according to the law on consumer protection, should not exceed 45 days. If all deadlines have expired, then the home buyer can sue the developer. The defect, which interferes with the normal operation of housing, made it possible to demand a penalty in the amount of 1% per day of the price of this very housing, according to this law. With a successful scenario for the plaintiff, it was possible to return almost the entire cost of the apartment. One way or another, many developers have been faced with this recently. This is what Stanislav Sagiryan, CEO of RKS Development Group, told Business FM:
Stanislav Sagiryan, General Director of RKS Development Group, “We did, we rented an apartment, it was built three years ago, everything is wonderful. Suddenly, lawsuits are coming from shareholders about repairs. And there, to put it mildly, is a very controversial repair, because it is clearly related to depreciation, to normal. If you walk all day on the parquet, then, of course, sooner or later somewhere it starts to move away a little or something else starts to happen to it. People have been waiting for three years, law firms come to them and say: guys, run faster to court, we will now refund you the entire cost of finishing. And somewhere we fought back, somewhere, alas, we lost and actually reimbursed quite significant amounts. Yes, it could be 5%, 10% of the apartment price. Therefore, many developers did not include the finishing in the cost of the DDU, they tried to prescribe it in a separate contract so as not to have the risk that they would be approached and absolutely treacherously be able to collect very, very large, hefty sums.”
The new law, which comes into force on September 1, radically reduces the amount of the penalty: instead of 1% per day, it is 1/150 of the Central Bank’s key rate. At the current rate, it turns out to be 0.12%. That is, a reduction of almost ten times. Due to, to put it mildly, not very adequate payments for defects that could previously be sued from the developer, a whole business has arisen around this. Probably, every home buyer in the primary market has found an advertisement for such services in his mailbox at least once. “To collect money from the developer, up to 2.5 million for defects” is a typical headline. There were two main options. The first was when money was simply collected from residents simply for preparing a statement of claim to the court, and that was the end of the provision of legal services. The second option is when lawyers worked for a percentage of the amount recovered from the developer.
Business FM called one of the Moscow offices, which is engaged in litigation with developers, under the guise of a potential client. And she asked how much she could sue:
“Depending on the area and the conditions. Now, for example, the third moratorium is in effect, that is, fines for consumer protection are not satisfied. That is, it will not be possible to inflate the amount of claims by one and a half or two times. Depending on the area, if you have an area of 19-23 square meters, then 200 thousand, sometimes 300 thousand. In areas over 50 square meters — 300-500 thousand, well, up to a million, even up to 700 thousand, that’s how they count the expertise. Look, maybe you will also communicate with lawyers, if they promise bright prospects, do not pay an advance payment, only on the terms of the success fee.”
It seems that we got an honest lawyer: he did not promise tens of millions, he himself told about the moratorium on collecting penalties from developers, which really exists and is valid until December 31.
The most widespread business in litigation with developers has been in Moscow and the region. The editorial board was asked to assess the scale of this business by the co-head of the real estate and construction practice of the EPAM Law Office (AB EPAM) Catherine Verle:
Ekaterina Verle, co-head of the Real estate and construction Practice at the EPAM Law Office (AB EPAM), “Unscrupulous experts have formed around this industry who underestimated the quality of the apartments built. Plus unscrupulous law firms that earned money by gathering groups of these shareholders and offering them to go to the courts for a certain percentage, that is, an entire industry was formed. And if, for example, four years ago this did not take on any massive scale, then over the past two or three years these fines have begun to have a truly large-scale nature. People were doing business, and fines in Moscow and the Moscow Region reached several tens of billions of rubles.”
The developers themselves say that a significant reduction in the size of penalties will not lead to a drop in the quality of new buildings.
English 
Russian 
German 
Polish