The consequence of the violation of the norms and requirements of the law when transferring property rights from one person to another is the cancellation of the procedure. Further, restitution and restoration of the order stipulated by the terms of the transaction, through legal solutions to the problem.
Description and types of contested and void transactions
Recognition of a concluded disputable or void transaction under the Civil Code of the Russian Federation takes place on the basis of certain legal factors that indicate the unlawful actions of one of the parties. In this case, the consequence of such actions is the liquidation of the contract, which does not comply with the law.
Such actions, as a rule, are provoked by one of the parties to the transaction, in some cases as a result of a preliminary conspiracy of both parties. This is usually done to carry out fraudulent activities or illegal schemes, when the parties have the intention to legalize what is not provided for by law as lawful. An insignificant transaction shall be deemed invalid from the moment of its conclusion and shall not require a lawsuit by the interested party, since by virtue of its insignificance such a transaction cannot give rise to rights and obligations of the parties.
When is she contested?
A transaction is called disputable if, due to certain circumstances, it has created a precedent, which has become the reason for filing a statement of claim to consider the case in court by one of the parties. The requirements of good faith to the plaintiff apply to this situation. If he, for his part, complied with the terms of the contract and was misled or deceived by the counterparty, the lawsuit is allowed to be considered in a lawsuit.
According to article 166 of the Civil Code of the Russian Federation, if the actions of both parties to the transaction were unlawful, then the fact of conspiracy against the legislative standards in relation to the subject of the transaction will be established, the court will cancel the claim and will not satisfy the requirements of the injured party.
Illegal actions
Such misconduct occurs when trying to sell:
- Property stolen from the owner.
- Illegally received at the disposal of one of the parties of real estate.
- Mortgaged property.
- Real Estate Arrested.
- Property (movable and immovable), the loan for which is not repaid to the bank.
Such situations can have consequences not only for the seller, but also for the buyer. The latter in this case is charged with ignoring the violation of the law by the counterparty. Not always the buyer goes on about the seller, sometimes he becomes the initiator of illegal actions.
What leads to the invalidity of the transaction?
An insignificant transaction shall be deemed invalid from the moment of its conclusion if it was made:
- By conspiracy of both parties with the intention of making a profit or the benefits of the property plan in an illegal way.
- Through fraudulent actions conducted against a counterparty, omitting the existence of restrictions on property, for example, its arrest.
- Against the backdrop of threats to one of the parties, as well as extortion, blackmail and other actions that are criminally punishable.
- In case of abuse of one of the parties by a severe set of circumstances.
- When one of the parties was officially recognized as legally incapable at the time of the transaction due to dementia or other mental illness.
- With a minor without the participation of an official representative.
- For visibility.
- With going beyond the powers of one of the parties.
Differences between void and contested transactions
A transaction can only be challenged by a court decision. The result of such a decision is, as a rule, contesting the transfer of the property with legal consequences for each of the parties. Void transactions, in turn, are annulled by the court after they are recognized as disputable. Most often, their cancellation does not require going to court, since the legal consequences prescribed by the agreement are not implemented. To terminate a void transaction under the Civil Code of the Russian Federation, it is not necessary to go to court, they themselves become incompetent.
An example is the situation when, during the purchase and sale of a dwelling, the buyer did not transfer funds to the seller. This transaction is considered to be failed, that is, insignificant, since the requirements of the concluded agreement were violated.
If, for example, the buyer paid for the purchase in full, and the subject of the contract turned out to be of inappropriate quality, then the conflict is resolved only in court. That is, it will be necessary to challenge the conditions at the time of the transaction.
There are also situations where a third party signs an agreement to sell property owned by another person. In this case, the contract cannot enter into legal force, and any claims by the buyer are recognized as null and void. It is another matter if the parties disposed of the property of the owner without his knowledge. In this case, the only solution to the conflict should be to appeal to the court.
Invalidation of a transaction: consequences
According to Article 166 of the Civil Code of the Russian Federation, the consequences of canceling a transaction directly depend on whether there was a conspiracy between the parties to the contract, which entailed legal violations and unlawful actions not provided for by the terms of the agreement. If the fact of collusion is proved in court, then all participants in the transaction are subject to sanctions. The plaintiff may be:
- The previous owner.
- Customer.
- A third party who has suffered damage as a result of the actions of the parties to the transaction.
In the event that a conspiracy has been proven, all proceeds and property acquired as a result of an illegal transaction are recovered against the state treasury. If one party was alienated in favor of the other with its consent, but without participation, the consequences will be the same. If the intent was on the one hand, and the second acted in good faith, the profit received is recovered from the person found guilty. In this case, the innocent party receives its money or property, but the transaction is canceled. This often happens when accompanying real estate transactions.
When it was committed in order to avoid possible legal consequences, the court also imposes the sanctions provided for by the regulations. A prohibition is imposed on the restitution of the transaction, thanks to which the parties could achieve their unlawful goals.
What else can help a claim for the application of the consequences of the invalidity of a void transaction?
Restitution
Restitution refers to the return of property-related relations to the initial stage, even before the alienation of the property and the buyer’s ownership of the property. After the arbitral tribunal has made a decision, it is permissible for interested parties to appeal to a court of second instance, as well as to appeal.
Invalidation of a transaction: grounds
As already noted, a void transaction is considered invalid from the moment of its conclusion.
The very first and main reason for its cancellation is a violation of the rights to the property of a person that has become the result of criminal or dishonest actions.Such actions should have legal consequences, which are classified as illegal alienation of property, which leads to its loss or complicates its further use.
These consequences refer to the constitutional provision that only the owner has the right to dispose of property. The constitution guarantees the protection of property from encroachment by third parties. Examples of void transactions are the purchase and sale of stolen goods, the imaginary donation of property that must be confiscated, the sale of an apartment that infringes on the rights of minors, and the use of forged documents and seals in the transaction.
What to attach to the lawsuit?
The grounds must be attached to the lawsuit and serve as a pretext for initiating civil proceedings. The affected party must indicate the reason for invalidating the transaction. In addition, relevant documentary evidence of the violation must be attached to the statement of claim:
- The agreement on the basis of which the property was transferred to the buyer.
- Receipts of receipt of funds that confirm the fact of payment of the transaction.
- Documentary evidence of a violation of the rules for registering an agreement with Rosreestr.
- Certificates confirming the fact of signing the transaction by an incompetent person.
- Title documents (if the transaction was conducted in excess of the authority of a legal entity). Real estate transaction support is a very responsible matter.
In some cases, witness testimony may be required, especially when it comes to threats, blackmail, violence and coercion of the owner to sign the transaction.
The plaintiff may also indicate in the statement of claim attempts to carry out restitution and prevent the alienation of property in favor of the second party. In this case, it is required to attach evidence of these actions, namely, a written notice of the claimant’s claim received by the defendant against signature. It is better to send it by mail with a notification of receipt. Sometimes you may need to contact the police station and write a statement about the infringement of third parties on the property of the owner. This statement will also be further evidence in court.
So, a void transaction is considered invalid from the moment of its conclusion. And although it does not require going to court, it is often impossible to resolve the situation without it.