A buyer of an apartment in a new building cannot always demand penalties from the developer for delays in putting the building into operation. The Judicial and Legal Newspaper explained what compensation is possible if the seller of property rights has violated the terms of the agreement.
0
► Read the “Minfin” page on Facebook: main financial news
An example is an episode where the Supreme Court considered the case of a buyer who purchased an apartment in a residential complex, but the building was not put into operation within the period specified in the agreement. The buyer demanded the return of funds paid, recovery of penalties, damages due to housing rental, and compensation for moral damages.
The agreement for the sale of property rights was concluded in 2021, and the commissioning of the building was planned for the second quarter of 2023. The cost of property rights for the apartment was UAH 994,980, and the buyer, in accordance with the terms of the agreement, made payments according to the established schedule. The buyer paid UAH 575,000, but after the specified period expired, the facility was not handed over.
The buyer did not receive any notifications about the reasons for the delay in putting the facility into operation, nor did they enter into additional agreements with the seller to change the deadlines for fulfilling the agreement.
As a result, the parties terminated the agreement, and the courts ordered the company to return the funds paid to the buyer.
However, the issue of additional payments reached the Supreme Court.
Why penalties and housing rental expenses could not be recovered
The buyer requested the recovery of over UAH 3.6 million in penalties for the delay, as well as UAH 175,000 in damages, which they attributed to the necessity of renting housing for the entire period. Additionally, the buyer sought compensation for moral damages in the amount of UAH 30,000.
The Supreme Court refused these claims because the agreement between the parties was specifically an agreement for the sale of property rights, not an agreement for the performance of work or the provision of services.
Under these circumstances, the provision of the Law “On Consumer Protection,” which stipulates penalties for delays in the performance of work or provision of services, does not apply. The court noted that the seller of property rights to an apartment is not a service provider within the meaning of this law.
Furthermore, the buyer failed to prove the right to compensation for housing rental expenses. To recover damages, it is necessary to confirm not only the fact of expenses but also the direct link between the breach of the agreement and the damage caused.
The court drew attention to the fact that the mere delay in construction does not automatically prove that it was precisely because of this that the person was forced to rent housing.
When a buyer can receive compensation
At the same time, the Supreme Court partially satisfied the claim for moral damages. The court recognized that the violation of the agreement’s terms and the necessity of its termination due to the seller’s failure to fulfill obligations infringed upon the buyer’s rights as a consumer.
In such cases, the buyer may be eligible for compensation for moral damages, even if it is not explicitly stipulated in the agreement.
The Supreme Court determined that:
As a result, the Supreme Court upheld the decision to return UAH 575,000 to the buyer, refused the recovery of penalties and damages, but awarded UAH 3,000 in compensation for moral damages. The court decision is final.