Sale of real estate by a person who went to live abroad

The question regarding the sale of real estate, which we will now consider, does not concern persons who have the hope and desire to return home when favorable conditions and the end of hostilities are met. It is more relevant for those who, unfortunately, have decided not to return to their native country, or whose circumstances have turned out to be such that they desperately need money here and now. Currently, there is an increase in the number of Ukrainians who turn to us with this question, and this is already becoming a trend.

According to Art. 5 of the Law of Ukraine “On State Registration of Property Rights to Real Property and Their Encumbrances” real property objects include: a land plot, as well as real property objects located on a land plot, the movement of which is impossible without their depreciation and change of purpose, namely: residential buildings, buildings, constructions (their separate parts), apartments, residential and non-residential premises. It is about this property that we will talk about.

You can sell your own real estate by coming directly to the territory of Ukraine, but sometimes the circumstances are such that a citizen does not have the opportunity to enter the territory of Ukraine. Here the power of attorney institute will come to the rescue. According to Article 244 of the Civil Code of Ukraine, a power of attorney is a written document issued by one person to another person for representation before third parties.

The power of attorney is issued for the disposal of movable and/or immovable property, representation of interests in matters of registration and receipt of documents, opening of bank accounts and receipt of monetary and material values, registration and receipt of registration of inheritance, etc. Usually, it is issued in the name of a person who is especially trusted, because it is about funds, and sometimes very significant. Therefore, we advise you to carefully choose the person whom you wish to “make happy” with the specified document, and who will have the time and desire to deal with your affairs instead of you.

But before issuing a power of attorney, you need to make sure what exactly it will be issued for. As it sometimes turns out, in order to sell real estate, you first need to arrange it! Sometimes citizens believe that they already have documents for real estate and show a technical passport or documents for the previous owner. Unfortunately, this is not the case. The relevant documents certifying ownership of real estate are contracts (sale, gift, and others), certificate of right to inheritance, certificate of ownership, court decision, state deed on ownership of land, and many others, but issued in your name. Therefore, we sincerely recommend, in order not to waste time, to make sure that the documents for the property you want to sell are in order.

While abroad, it is possible to issue a power of attorney in two ways. The first is at a foreign diplomatic institution – consulate or diplomatic institution, the second – at a local notary public. Let’s consider both of these options. But from the beginning purely practical advice. No one knows better how to write a power of attorney for actions in Ukraine correctly than notaries working in Ukraine. Their actions are coordinated by the Ministry of Justice, they know the correct names of all state institutions and not only them, relevant nuances regarding actions in a specific body. Therefore, our recommendation is to contact a local notary here, personally via the Internet, and preferably through relatives who have remained in Ukraine, explain why you need a power of attorney and get a draft of this power of attorney from him.

Regarding the power of attorney issued by the consulate. The main thing is that it will be valid on the territory of Ukraine without any additional procedures, no matter how you draw it up at a notary in Ukraine. Certification of powers of attorney by a consulate (or diplomatic mission) abroad of Ukraine takes place in accordance with the procedure and rules of Ukrainian legislation. The main thing to remember when drawing up a power of attorney: the more specific the powers delegated to the representative, the better. The wording “for all actions on my behalf” leads to the fact that in the future some state bodies refuse the representative to perform actions, referring to the fact that the specific action and the body in which it must be performed are not prescribed in the power of attorney.

In order to issue a power of attorney at the consulate, you need to make an appointment in advance and provide the following documents, the list of which is indicative and minimally necessary: ​​an application of the appropriate model, a valid passport of a citizen of Ukraine for traveling abroad (international passport) preferably with a copy of the first page (in the absence of an international passport you can submit a valid internal passport by adding copies of pages with marks); the original and a copy of the Ukrainian identification number of the applicant; copies of documents of the authorized person, namely copies of pages 1-2 of the passport of a citizen of Ukraine (domestic passport), a copy of the page with registration, as well as a copy of the Ukrainian identification number of the authorized person. It is at this stage that you will need the power of attorney draft we mentioned earlier, preferably in electronic form in WORD format (.doc, .docx).

It is possible to clarify the specific list of necessary documents, the application form and the order of their submission on the official website of a specific consulate on the Internet. This service is paid, the size of the consular fee in US dollars and euros, which is paid for the performance of consular actions by foreign diplomatic institutions of Ukraine, is unified and compiled for the certification of powers of attorney for the right to use and dispose of property, except for vehicles, other self-propelled machines and mechanisms, and the implementation of credit operations: children, spouse 30 USD or 28 EUR, other persons – 60 USD or 55 EUR.

Regarding the power of attorney issued by a local foreign notary public. Powers of attorney, which are certified by notaries of a foreign country, are certified according to the legislation of the foreign country itself. According to Article 13 of the Law of Ukraine “On Private International Law”, documents issued by authorized bodies of foreign states in the established form are recognized as valid in Ukraine in the event of their legalization, unless otherwise provided by law or an international treaty of Ukraine.

There are two methods of legalization of documents on the territory of Ukraine: consular legalization and apostille.

Apostille is a special stamp affixed to official documents from member states of the Convention Abolishing the Legalization of Foreign Official Documents (The Hague, 1961). Ukraine signed this document in 2003. The list of countries that recognize “Apostille” currently includes 125 countries of the world. Among the most popular in it from the point of view of Ukrainian refugees: Austria, Bulgaria, Greece, Denmark, Estonia, Israel, Ireland, Spain, Italy, Netherlands, Canada, Norway, Poland, Romania, Czech Republic, Slovakia, Great Britain, Turkey, France, Croatia, Montenegro . According to the provisions of the Convention, a document bearing an apostille does not require any additional registration or certification and can be used in any other state party to the Convention.

Consular legalization of official documents is a procedure for confirming the validity of the originals of official documents or certifying the authenticity of signatures of officials authorized to certify signatures on documents, as well as the validity of impressions of stamps and seals used to seal the document that were issued in countries that have not signed the Hague Convention on the Abolition of Consular legalization It can take place in the Consular Service Department of the Ministry of Foreign Affairs of Ukraine.

Diplomatic institutions abroad of Ukraine accept for legalization official documents drawn up and certified on the territory of the host state or consular district by state authorities, whose competence includes conducting the consular legalization procedure, for their further use in Ukraine. At the same time, the consul is not responsible for the content of the document.

In connection with the situation in the country, in order to prevent fraudulent actions by criminals, an important innovation was introduced. Yes, if more than one month has passed since the date of issuance of the power of attorney certified on the territory of Ukraine, the notary must receive a statement from the principal confirming the validity of the power of attorney. If the power of attorney is certified outside of Ukraine by a Ukrainian consular institution (diplomatic representation) or in accordance with the legislation of a foreign state, the validity of the power of attorney must be confirmed by a statement from the principal, if more than two months have passed since the date of issuance of such power of attorney.

The authenticity of the signature on the specified statements must be certified by a notary no earlier than seven calendar days in advance, and by a consular institution (diplomatic representation) of Ukraine or in accordance with the legislation of a foreign state – no earlier than one month before the date of conclusion (signing) of the corresponding contract (act).

Now people have many questions regarding the entry of powers of attorney into the Unified Register of Powers of Attorneys of Ukraine – which powers of attorney must be there and which are not. In this regard, the Commission of the Notary Chamber of Ukraine for analytical and methodological support of notarial activity provided the following clarifications.

“Registration of powers of attorney (their duplicates) certified by consulates (diplomatic missions) of Ukraine abroad in accordance with Article 38 (in case of lack of access to the Unified Register), as well as information on the termination of their validity, is carried out in the Unified Register upon application of the principal to register such powers of attorney .

The application for registration of the specified powers of attorney is submitted to the Registrar (notary of Ukraine) directly by the principal. If it is impossible to submit an application for the registration of a power of attorney directly by the principal, the authenticity of the signature of the principal on such an application must be certified by the signature and seal of the person who certified the power of attorney. In this case – consulates (diplomatic missions) of Ukraine abroad. Thus, powers of attorney issued by citizens of Ukraine and certified by officials of the consulate (diplomatic representation) of Ukraine abroad are subject to mandatory registration in the Unified Register of Powers of Attorney.

Powers of attorney, which are certified by notaries of a foreign country, are certified according to the legislation of a foreign country. The legislation of Ukraine does not provide for the obligation and the possibility of registering such powers of attorney in the Unified Register of Powers of Attorney of Ukraine. Therefore, powers of attorney certified by notaries of a foreign state are not subject to registration in the Unified Register of Powers of Attorney.”

In addition to the power of attorney, the representative must hand over the originals of the real estate documents and wait. It is the representative who will collect additional necessary papers, such as certificates of absence of debts from communal institutions, pay communal debts if they exist, deregister the place of residence of all registered persons (for which they also need appropriate powers of attorney), show real estate to potential buyers , to sign relevant documents for sale at a notary.

It should be noted that in accordance with Clause 7 of the Regulation on conducting cash transactions in the national currency in Ukraine, natural persons have the right to make cash settlements among themselves under purchase and sale contracts, which are subject to notarization, in the amount of up to 50,000 (fifty thousand) hryvnia inclusive. Payments for an amount exceeding UAH 50,000 are made by transferring funds from account to account or depositing and/or transferring funds to accounts.

Thus, the funds received in the bank account together with a notarized copy of the sales contract, which must be requested from the real estate seller for himself, will be a one hundred percent guarantee of the “purity” of the money received to confirm its origin in many countries abroad. Also, in turn, it is necessary to ask the representative to keep copies of all certificates from the relevant utility services about the absence of arrears on utility payments.

There is another point that can affect the owner of real estate – the registration of a deposit. A deposit is a sum of money or movable property issued to the creditor (seller) by the debtor (buyer) against the payments due from him under the contract, to confirm the obligation and to ensure its fulfillment (Part 1 of Article 570 of the Civil Code of Ukraine). Article 571 of the Civil Code of Ukraine states: “If the breach of obligation occurred due to the fault of the debtor, the deposit remains with the creditor. If the breach of obligation occurred due to the creditor’s fault, he is obliged to return the deposit to the debtor and additionally pay an amount equal to the amount of the deposit or its value. It is this contract that is usually talked about when negotiating the conclusion of a sales contract. The buyer gives a deposit, and the seller receives it. The parties exchange receipts and separate to prepare for the main agreement. But this is a delusion. According to the current legislation, only a preliminary agreement, which in such a case must be notarized, can guarantee the parties sanctions for refusing to enter into a future planned agreement.

Article 635 of the Civil Code of Ukraine defines: “A preliminary contract is a contract, the parties of which undertake to enter into a future contract (main contract) within a certain period of time (at a certain time) on the terms established by the previous contract.” In the event that the parties exchange only receipts, the transferred funds are considered simply as an advance payment and are subject to return in the event that the conclusion of the agreement did not take place.

As for the cost of signing the real estate purchase agreement itself, the size of each payment is:

• personal income tax (abbreviated as “PIT”) – 5%;
• military levy – 1.5%;
• state duty – 1%;
• contribution to the Pension Fund – 1%;
• notary services are by agreement, and the cost of the service is determined by the notary. At a public notary, the registration fee will be lower.
• payment for certificates and extracts from relevant state registers;

The specified costs are distributed as follows:

• VAT, military duty, state duty are usually paid by the seller,
• the buyer pays the fee to the Pension Fund and the services of a notary.

The value of residential real estate is not subject to tax, if during the year a person makes only one purchase and sale agreement of residential real estate, which he has owned for more than three years. Then the seller and the buyer pay only the state duty (1%) and the fee to the Pension Fund (1%). If a person inherited real estate, the condition that the property has been owned for more than three years does not apply, and the property can be safely sold immediately. It should be noted that the distribution of costs in this way is not mandatory, the parties can agree on another variant of the distribution of costs.

It is important for a real estate buyer that at the time of signing the contract of sale at the notary, there are no utility bills and no registered (registered) persons. You may have a completely logical question – why not transfer all the hassles of selling real estate to a real estate agent – a realtor? We would like to note that this profession is not licensed in our country, there are even no specific requirements for it. Anyone with any education goes to work as a realtor, so they can help get a certificate about the absence of arrears on utility bills, show the apartment to buyers, but even these actions we recommend that you trust only a professional in your field.