“The Constitutional Court has changed the norm for contesting housing transactions in case of bank failure”
Alexandra Ulezko, Head of the bankruptcy team, explains how it is more profitable for the mortgaged property owner to dispose of it.
Business FM told the story of a Petersburger who bought a mortgaged apartment from a bank. The bank went bankrupt, and the owner was left without an apartment and without compensation. The Constitutional Court considered such a norm to violate the balance of interests of the parties.
The Constitutional Court sided with the creditors. The practice when a person bought housing as a pledge from a bank, and then the bank went bankrupt and the buyer was left without money and without an apartment, is illegal. Now the victim will be left with housing until the money paid is returned to him. The court examined the case of a resident of St. Petersburg, who found himself in such a situation. What conclusions can be drawn from this decision?
Previously, Business FM has already told the story of a resident of St. Petersburg. The man bought an apartment from the bank, which was pledged, at a price three times cheaper than the market price. For housing of almost 300 square meters in the center of St. Petersburg, he laid out only 11 million rubles. Soon the bank began to have problems, the Central Bank handed over the bank for reorganization, introduced a temporary administration. And she has already filed a lawsuit to recognize the deal as fictitious — the real cost of the apartment was almost 35 million rubles. The discount was implied, but not that big. The court agreed and decided to return the apartment. The buyer was told to go to the creditors of last resort for damages. That is, the man was left without an apartment, and without money.
The Petersburger went to the Constitutional Court, which decided that it was impossible to deal with creditors in this way. Now, if the bankruptcy procedure has already begun, the bank will not be able to take the purchased housing from the creditor. There is a caveat — there should be the only one housing. Instead, the bank will be required to return the money paid to the creditor and only then evict him. In short, in the event of bankruptcy, banks were obliged not to send all the money to the bankruptcy estate, but first of all to pay off creditors.
Thus, it turns out that the Constitutional Court gave guarantees to creditors that their money would be safe in any case. It turns out a profitable game without risk. If they sue, the creditor will not lose anything, the money will be returned. If they don’t come to sue, then it’s generally wonderful. You can quickly resell and make good money. True, the clause about the only housing makes this scheme not so obviously profitable, notes real estate expert, realtor Andrey Veselago: “On one hand, yes. On the other hand, you need to understand that our apartment prices fluctuate all the time, and what we could buy for 10 million three years ago is not at all what we can buy for 10 million now. Again, everywhere there is a reference to the only housing. As a rule, investors, not ordinary people, play games with buying an apartment from potential bankrupts at prices three times lower than the market ones. It will not be their only housing, it will not apply to them. To some extent, these risks are closed by this resolution. In any case, you need to understand that there are no fools, you can’t just take and safely buy an apartment at a price three times lower than the market, there are always some pitfalls.”
Very profitable offers to buy an apartment can be found in any ad aggregator. In the center of Moscow or St. Petersburg, mortgaged housing can be sold at half or even three times cheaper. Such housing could be bought by those who have their own dishonest person in the bank — for kickbacks, they received all the operational information about the imminent auction first-hand. But the risks of recognizing the transaction as fictitious always exist.
Debtors should remember: a bank is not a real estate agency. It can sell mortgaged housing for half the price, even for a third of the cost — it is important for banks to repay the debt, but whether there will be any leftovers that will go to the debtor — it does not matter. The bank does not profit from this story. The owner suffers. Therefore, the debtor, if he feels that he will soon be unable to pay the loan, needs to have time to sell the apartment himself and not bring the case to auction, advises Alexandra Ulezko, Head of the bankruptcy team at Kachkin & Partners: “It is more profitable to sell the apartment on your own , which is pledged, but you must first obtain permission from the bank. It is necessary to communicate with the bank so that they give such permission, because the sale is simply on the open market – as a rule it brings more money than the sale of property at auction. Whether the bank is in enforcement proceedings, there is something else. There is still some kind of discount. Well, even because, as a rule, people tend to buy just apartments that are not in any dispute, relatively speaking. Well, although it is not really a dispute, how would a bank or bailiff sell it. Nevertheless, it was always more profitable — to sell by yourself.
So far, the decision of the Constitutional Court is only a decision on one case. The court stated that some of the articles were not in accordance with the constitution. Legislators have yet to change these articles. This process is not fast — and all the risks and fears the owners of mortgaged housing will have to weigh for a long time.
The material is published on the website «BusinessFM» 10.02.2022
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