Agreement for the sale and purchase of an apartment with installment payment: features and example of completion

When making real estate transactions, the parties are given the right to independently determine almost all the terms of the contracts; they must be coordinated with the requirements of the law. Among other things, when buying or selling real estate and concluding a real estate purchase and sale agreement, citizens can reach an agreement on installment payment for housing.

Laws and regulations

Regardless of the agreements of the parties, any sales and purchase agreements determine the terms of civil transactions. The legal regulation of relations between the parties is regulated by the Civil Code of the Russian Federation, and installment payment is one of the legal options for paying the price of property under a transaction.

We can highlight the key features of registration of real estate transactions, which will equally apply to installment contracts:

• the subject of the transaction can be any object for which ownership is registered in the Unified Real Estate Register (USRN);
• any real estate transaction must be registered with the state service of Rosreestr;
• the transfer of real estate to the buyer is carried out on the basis of a deed.

After registration actions regarding the purchase and sale agreement of real estate in the Rosreestr office, the ownership right passes to the acquirer, however, if there are conditions for installment or deferred payments, this right will be significantly limited.

Features of the document and its sample

Installment payment is a special procedure for transferring funds for purchased property, in which the buyer is given the opportunity to make payments not at the time of registration of the contractual relationship, but in accordance with the approved payment schedule.

Download a sample document in PDF format.

When does installment payment occur when purchasing an apartment? When concluding an agreement for the purchase and sale of an apartment with installment payment, both counterparties must come to a mutual agreement that the seller will receive the funds after a certain period of time.

This form of relationship between the counterparty has the following features:

• as a rule, a certain part of the cost of the apartment is paid before registering the transaction with the Rosreestr institution;
• for the remaining amount of payments, the parties provide for a payment schedule, and the frequency and timing of payments can be determined by the seller and the buyer independently;
• When registering a document with installment payment, an encumbrance of the right arises - a pledge by force of law.

The specified encumbrance is established to protect the interests of the seller from possible cases of violation of terms and payment procedures.

If the installment payment schedule is not fulfilled properly, the seller has the opportunity to exercise his right to collect funds in full or to terminate the contract with the return of the pledged object.

How to format correctly

Let us consider in what cases purchase and sale agreements are concluded with installment payment included in the terms. This form of legal relationship arises in cases where the buyer does not have enough of his own available funds to fully pay for the residential premises.

In case of installment payment, further fulfillment of monetary obligations can be carried out as follows:

• the buyer will make regular payments from his own income (salary, other income), without contacting credit institutions;
• the installment plan is established for the period of obtaining a bank loan, after which the buyer pays the entire remaining amount under the contract or a large part of it;
• The installment payment schedule may include a period for processing other payment options - state housing subsidies, maternity capital funds, etc.

If an agreement with installment payment is concluded between the seller and the buyer, the key condition will be the payment schedule. For example, when granting a deferment, the payment schedule is not established, but the date of final payment is determined. Installment plans, on the contrary, are characterized by regularity of payments, i.e. funds must be transferred through several independent payments.

If an installment purchase agreement is concluded, the pros and cons must be weighed by the parties themselves. First of all, this concerns the seller, since if the terms of payment are violated, he will have to defend his rights and the rules on the sale of collateral will be applied.

Transfer deed

The deed of transfer is an annex to the purchase and sale agreement in which the partners record the actual transfer of property to the buyer. In this document, both parties determine the qualitative characteristics of the apartment in order to establish the presence or absence of claims.

If installment payments are provided, this condition must also be indicated in the transfer deed. If a violation of the payment procedure and terms is subsequently established, the transfer act will be used to determine the actual condition of the returned property.

The transfer deed is submitted for registration to the Rosreestr office simultaneously with the main agreement.

Seller and buyer

The parties to this transaction are the seller and the buyer, and must be the owner of the real estate. It is these parties that can agree on any terms of the transaction, including the provision of installment plans.

The possibility of establishing an installment plan rule in the contract may be influenced by the legal status of the buyer.

For example, military personnel can apply for an installment plan to receive a one-time cash payment from the Ministry of Defense of the Russian Federation to improve their living conditions.

Families with two or more children can purchase housing in installments and make payments using maternal capital.

When registering an agreement with the Rosreestr office, the pledge by force of law is established in favor of the seller. If the terms of the transaction are violated in terms of payment of the price under the contract, it is up to the seller to take advantage of all the consequences in the form of termination of the contract or collection of funds.  

What does the contract include?

If a contract for the purchase and sale of an apartment is drawn up with an installment plan, possible pitfalls are associated precisely with the establishment of a pledge by force of law. In this case, the following legal consequences arise, which are provided for by the terms of the contract:

• the parties must include a payment schedule in the contract, i.e. indicate the procedure and timing for transferring regular payments;
• violation of the payment schedule is the basis for the seller to exercise the rights of the pledgee;
• Until the contract price is paid in full, the buyer is deprived of the opportunity to dispose of the apartment (for example, sell it to third parties) without the consent of the seller.

The pledge by force of law is removed only after the full fulfillment of the monetary obligation. As soon as the buyer transfers the entire cost of the property, he has the right to demand the removal of the encumbrance in the form of a pledge and acquires full rights to dispose of the apartment.