The real estate exchange agreement is a bilateral sale and purchase transaction, within the framework of which each of the counterparties acts as a seller or a buyer. Under the exchange is meant that you give your property to another person, thus becoming the owner of his home.
What is the difference between an exchange agreement?
The main difference between conducting an exchange transaction from the purchase and sale process is that it is the housing exchange itself that takes place without the use of money. A sample real estate exchange agreement is presented below.
In a sense, the procedure for exchanging real estate is much safer than buying and selling:
- There is no need to worry about how to securely transfer funds to the seller.
- The seller will not have to worry about whether the bills are real when it comes to cash.
- There is no temporary problem with long transfers to the seller’s account through a bank. The terms of the real estate exchange agreement will be considered below.
Taxes
The indisputable advantage of such a transaction is also the absence of the need to pay personal income tax during the exchange of equivalent real estate objects.
But at the same time, this is also a drawback, since there is no way to use tax deductions, which could be done when selling an apartment.
That is, under the real estate exchange agreement, taxes are not paid.
It is important to note that, despite the use of the similar words “exchange” and “exchange” as synonyms, legally they are not the same:
- For example, the concept of “exchange” refers to municipal living space, their citizens have a social tenancy agreement, or an apartment order in the case when the premises were still received by the parents under the Soviet regime, or by grandparents, and with the passage of time due to various circumstances, the documents were not reissued.
- The term "barter" is used to mean transactions with apartments that have been privatized, and their owners have certificates confirming their ownership.
It will not be possible to exchange housing, which is already privatized, for municipal or vice versa, since, starting in 2005, such transactions were prohibited. It is possible to conclude an agreement for the exchange of real estate between legal entities.
Important nuances of the agreements
There are only two such nuances, but without them the procedure for exchanging an apartment will be impossible:
- It is important to indicate the subject of the agreement. It is worth mentioning the exact characteristics regarding the housing to be exchanged, so that you can determine the property at any time. Absolutely all digital information is duplicated in brackets in words, what needs to be done so that there are no discrepancies. The form of the contract for the exchange of real estate must be strictly observed.
- The persons who are entitled to use the apartment are indicated. All people registered in a specific area are relevant to them. It is also important to indicate time limits in the contract, according to which they will be required to be deregistered.
An example of an exchange contract for real estate can help in the design.
Other additional agreement requirements
All other conditions are subject to additional conditions. But this does not mean that they can be omitted. So, these requirements usually include:
- Parties. For individuals indicate full name, as well as passport data.But in the event that at least one party acts as a legal entity, it will be necessary to indicate the full name of the institution, the main details and its legal address.
- Cost. It is traditionally assumed that both apartments are of equal value, therefore this condition does not apply to significant ones.
- The general condition in which the property is located. One phrase is enough that citizens conducted an inspection of the property they intend to receive, and her condition suits them all. Each of these participants must give their apartment in the state in which it was located directly at the time of the inspection. An example of a real estate exchange contract with surcharge is also presented.
- The process of real estate insurance, which is indicated in the exchange agreement.
- Timelines. When one of the parties received the documents before the other, then for the second one should set a certain period during which it will have to do the same. At the end of this period, the contract will expire.
- Unforeseen reasons that may interfere with the implementation of the transaction, and what specifically counts as force majeure, the parties will determine on their own.
- The date of the transaction and the signature of each of the parties.
Indication of housing costs and additional transaction fees
Some of the nuances of the contract of exchange of real estate between individuals will be considered below.
If the apartments are exactly the same, then in this case everything is simple. It is only necessary to indicate the price and emphasize that the transaction occurs without making an additional payment.
When the difference in price indicates the cost of housing, as well as surcharges, the amount of which depends on the decision of both parties. It should also be noted in the agreement how and in what time frame one party is obliged to transfer money to the other.
From this amount, those who receive it will be required to pay personal income tax. And the one who issued the surcharge has the right to demand a tax deduction. Of course, this is relevant when the party has owned an exchangeable apartment for more than three years.
This will only be possible if securities were provided that confirmed the transfer of money under the transaction.
That is why you should not throw out receipts or payment orders, when there is a non-cash transfer of a fee, they will certainly come in handy.
Actual Valuation Process
Since the actual cost is determined by citizens, when conducting a transaction between good friends and close relatives, it can be reflected in the contract that there will be no additional fee, and then transfer the property without any documents. But even on the part of the best friends, betrayal is possible and they can throw without giving money, in this situation you can not prove anything.
In addition, it is very easy to make problems with the tax authorities. If the surcharge is small, for example, fifty to one hundred thousand rubles, you can take the risk and not reflect its indicator in the agreement. But, when the old Khrushchev’s apartment is suddenly exchanged for comfortable real estate in a new building, anyone will already guess that the surcharge must be paid. The Russian registry has the right not to skip such a transaction and the tax one is also likely to be of interest to it. That is why the co-payment in large amounts should be drawn up properly in the contract of exchange of real estate.
Notarization of an agreement
You can do without it only if you are sure of the decency of the opposite side, as well as your knowledge of the laws, then you can just go and sign the contract.
But still it would be better not to save on notarial services:
- None of the parties to the transaction could later claim that she did not know about a certain article of the Civil Code of the Russian Federation, or was intoxicated immediately at the time of the conclusion of the agreement, and therefore could not remember anything.
- If the papers are lost, the notary will be able to duplicate them, otherwise the restoration of documents will be absolutely impossible. This is how the registration of the real estate exchange agreement takes place.
Termination Terms
There are two ways to terminate the real estate exchange agreement:
- by mutual agreement;
- in the manner prescribed by law.
By mutual agreement, the agreement can be terminated in the following two cases:
- If the desire for everything to return to their places, both sides of the transaction appeared at the same time. In this situation, no problems will arise and the contract will be terminated, and everyone will regain their living space.
- When the initiative to terminate the agreement came from one side. In this case, a written request must be made to the opponent of the contract, where it will be necessary to indicate the reason why it was necessary to terminate it. Within thirty days, the second side is obliged to decide whether it agrees to do this or not. If agreement is still reached, then the transaction is terminated, according to the rules of the above situation.
Grounds for termination
In the event that the parties have not yet reached a mutual agreement to terminate the transaction, it is necessary to apply to the court and indicate in the claim all the grounds for termination.
Among those may be present:
- Non-compliance by the other party.
- Significant changes in circumstances. This is possible when the plaintiff knows about the possibility of something that could prevent it from completing the deal, for example, if the living area was damaged by a fire before the conclusion of the contract, and the counterparty knew about it, but did not inform the other side.
- The contract was signed by one of the parties under pressure or under duress.
- One side deceived the other in something, for example, the agreement states that no one has rights to housing, although in fact real estate is pledged to the bank due to a mortgage.
- The contract (the sample of the drafting of the barter agreement we have provided) contains significant typos that affect its implementation, for example, the apartment number and its address are incorrect. You can file a lawsuit within one or three years, depending on why the transaction is terminated.
- In addition to the above conditions for termination, directly in the text of the agreement may be any other good reason, for example, improper compliance with any of the paragraphs.
The exchange of residential buildings as one of the types of transactions for me
Exchange agreements for residential buildings are a form of exchange agreement. The uniqueness of such a document lies in the fact that the subject of the transaction are real estate objects that are firmly connected with the land.
The exchange of housing, which is located on the land, is carried out only in tandem with the land. The owner has the full right to transfer to the opposite side not only the land itself on which the property is located, but also land of any area adjacent to it if it is not occupied by any other buildings.
Land Use Rights
For citizens at the moment of time there are 2 rights to use the land:
- rent;
- right to property.
In situations where the land territories under the houses to be exchanged are owned by the parties, then, on the basis of a real estate exchange agreement, the federal registration service transfers the ownership of the land territory and the building.
But, if a land plot on one side exists within the framework of lease rights in use, then the exchange of residential premises will be carried out without this land plot. The new owner of the building after the registration process and the transfer of the right to a residential building, as the new owner of the lease of the land will re-register with the authorized local government.
The former owner of the transferred property will also have to apply to the authorized body with a statement on the waiver of rental rights to the land territory that previously belonged to him. The agreement for the exchange of residential buildings, which serves as the basis for registration under the law of property rights to the premises and the land that it occupies, should include all the necessary elements of the registered legal relationship, such as, for example, the object, subject and authority.
Agreement for the exchange of immovable property with movable property
By law, you can exchange real estate for movable property (for example, a car). The parties are obliged to warn each other about the shortcomings of the property to be exchanged, about the rights of third parties to it (tenant, pledge holder, etc.).
We examined the basic terms and conditions of the real estate exchange agreement.