Term in the contract of participation in shared construction

The contract of participation in shared construction must contain the deadline for the transfer by the developer of the shared construction object to the participant in shared construction. 

The term is an essential condition, the consequence of non-observance of which is the non-conclusion of the specified agreement. 

Often, developers provide for two terms in a contract for participation in shared construction:expected completion date and a condition on the transfer of the object of shared construction during a certain period from the moment of obtaining permission to enter an apartment building.
 

As a rule, allowing the delay in the transfer of the construction object, developers refer to the later of the specified periods. 

In court practice there are examples of the interpretation of such contracts and terms about the term in favor of the priority of the act of commissioning of both the reporting date, and the developer named the expected date of completion of construction.

The interest is the Definition of the Supreme Court of the Russian Federation of 05.09.2017 N 78-KG17-67, which explains in the most detailed and consistent manner the correct reading of such conditions about the term.

In this case, between an individual (buyer) and the developer a contract was concluded for participation in shared construction, the subject of which is the construction by the developer of an apartment building and the transfer of the apartment to the buyer. 
In accordance with clause 3.2 of the aforementioned contract, the developer planned to complete the construction of the facility in the first quarter of 2015. 

In clause 3.2.1 of the same contract it was stated that the developer undertakes to transfer the apartment to the participant in shared construction according to the acceptance certificate no later than six months from the date of receipt of the permit to commission the facility.

Clause 3.2.2 of the contract provides that the developer has the right to transfer the apartment to the participant of shared construction ahead of schedule, at any time after actually obtaining permission to put the object into operation. 

A participant in shared construction does not have the right to refuse early acceptance of an apartment. Permission to commission the object was obtained on December 25, 2014, the apartment was transferred to the claimant on December 13, 2015. 

From the provisions of the law on participation in shared construction, it follows that a contract of participation in shared construction must contain a condition on the term for the transfer by the developer of a shared construction object to a participant in this construction.

Moreover, in accordance with Part 2 of Article 8 of the Law on Participation in Share Construction, the transfer of an object must be made not earlier than when the developer obtains permission to put into operation an apartment building or other real estate object and no later than a period specified by the contract. 

In accordance with Article 190 of the Civil Code of the Russian Federation, the period established by law, other legal acts, a transaction or a court-appointed time is determined by a calendar date or by the expiration of a period of time that is calculated in years, months, weeks, days, or hours. The deadline may also be determined by reference to an event that must inevitably occur.

Putting the object into operation, as follows from the provisions of Art. 55 of the Town Planning Code of the Russian Federation is an event completely dependent on the actions of the developer and not dependent on the will of the participant in shared construction. Including the developer unilaterally has the right to transfer the deadlines for the completion of construction, as well as the deadlines for putting the object into operation by extending the building permit (part 20 of article 51 of the Town Planning Code of the Russian Federation).

Obtaining permission to enter an apartment building or other property into operation is not an event that should inevitably occur, and in itself cannot be considered as a term condition.

At the same time, the provisions of Article 190 of the Civil Code of the Russian Federation do not exclude the definition of a term by a combination of interrelated periods and calendar dates. 

The courts correctly stated that by the interrelated terms of the contract concluded by the parties, the transfer date to the participant of the shared construction of the facility is determined by the establishment of two consecutive periods: the construction completion period - in Q1 2015 quarter, and the period during which after the construction is completed construction, no later than six months from the date of receipt of the permission for commissioning (clauses 3.2 and 3.2.1 of the contract).

The indication of the condition provided by point 3.2.1 of the agreement on transfer of object of share construction within the certain period from the moment of receipt of permission to input of the apartment house in operation as on the only condition about the term, without interrelation with the condition of point 3.2 about the term of construction, actually would mean absence in the agreement of participation of share construction of specific term of transfer by the Builder of object of share construction to the participant of this construction, that is inadmissible owing to the provisions of point 2 of part 2 of article 4 of the Law on shared construction given above and would lead to violation of the rights and legitimate interests of the participant of share construction owing to incompliance of the Builder with the specific term of performance of the obligation

The courts correctly stated that under the terms of the agreement concluded by the parties, the defendant was obliged to build and transfer to the plaintiff an apartment no later than December 2015. 

However, in accordance with the provisions of Article 431 of the Civil Code of the Russian Federation, when interpreting the terms of a contract, the court takes into account the literal meaning of the words and expressions contained in it. The literal meaning of the terms of the contract in case of ambiguity is established by comparison with other conditions and the meaning of the contract as a whole. 

Based on the literal interpretation of clause 3.2.1 of the contract, the developer has committed to transfer the apartment to the plaintiff no later than six months from the date of receipt of the permit to put the house into operation.

Thus, according to the agreement concluded by the parties, the defendant should have transferred the plaintiff’s apartment no later than December 2015, but no later than six months from the date of receipt of the permit to put the house into operation. 

This kind of determination of the period of performance of an obligation, depending on the circumstance that comes first, does not contradict the norms of civil law. 

This position of the Supreme Court is also reflected in other decisions of the Supreme Court (Definition of the Supreme Court of the Russian Federation of 13.02.2018 N 33-KG17-23, Definition of the Supreme Court of the Russian Federation of December 19, 2017 N 78-KG17-86, etc.).
 

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