Legal review of Residential Complex Creator City (Kreator City) by Kreator-Bud

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Prices for May 2021 RC Creator City

Number of rooms	Area	Price per m2
1-room apartments	31 – 85 m2	35,850 – 44,650 UAH/m2
2-room apartments	58 – 94 m2	34,100 – 46,100 UAH/m2
3-room apartments	73 – 93 m2	34,450 – 41,150 UAH/m2
4-room apartments	139.51 m2	53,450 UAH/m2
5-room apartments	128 – 159 m2	37,200 – 53,450 UAH/m2
6-room apartments	203.07 m2	50,950 UAH/m2

8% discount with 100% payment

Residential Complex Features

• Class – Business
• Buildings – 8
• Floors – 24
• Construction technology – monolithic-frame
• Heating – autonomous (in-building)
• Walls – brick
• Insulation – mineral wool
• Ceiling height – 3 m (floor to ceiling)
• Parking – underground with elevator (1000 parking spaces)

Developer and builder Kreator-Bud

Infrastructure

The complex should consist of 8 buildings of 24 floors. Judging by the fact that apartments on the website can be selected starting from the 3rd floor, I assume that the lower floors will be filled with commercial spaces. By the way, I was surprised that the minimum apartment area in a business-class complex is only 29 square meters.

Building permit for the residential complex Creator City

The construction client has a building permit. But the permit ІУ 113200650647 shown on the complex’s website was issued for the FIRST PHASE of construction. If you are considering purchasing an apartment in RC CREATOR CITY, you need to carefully study the project’s documentation and make sure which buildings are included in that permit.

There is also a permit in the Construction Activity Registry ІУ013201106207 from November 2020 already for the SECOND phase of construction.

Land of RC Creator City

The complex is being built on the parcel 8000000000:88:061:0073, which is privately owned by the company БУДІВЕЛЬНИЙ СОЮЗ “МОНОЛІТ”. This company, the landowner by contract, transferred the land to our construction client – the company BAU – Ukraine – for development. The land’s designated purpose corresponds to construction – for the construction and maintenance of a multi-apartment residential building with commercial-entertainment and market infrastructure. Note that it states the ownership right to the building arises with the superficiary – this is the company BAU – UKRAINE. They were given the land for development and what they build there will belong to them.

Legal disputes with Kreator-Bud

The first court case concerned the issuance of construction documents. The Department of Architecture in Kyiv did not want to issue the urban planning conditions and restrictions to the construction client – a document required for construction. Therefore, the client went to court in 2018 and all three instances were considered within 9 months. Result – the client won and the court obliged the department to issue the urban planning conditions and restrictions.

But this is not the only court case.

In 2018 a criminal case was opened under the following articles – “unauthorized occupation of a land plot and unauthorized construction, document forgery, and abuse of power or official position.”

The essence of case 757/65842/19-к is the following – in 2009 the Kyiv City Council sold the land on which RC CREATOR CITY is now being built to the company БУДІВЕЛЬНИЙ СОЮЗ “МОНОЛІТ”. Law enforcement officers suspect that this company colluded with the State GeoCadastre and the land was converted from the category of public development to the category for residential development, and its designated purpose was changed illegally.

In 2019 an arrest was placed on the land, but the appellate court overturned the Pechersk court’s ruling and the arrest was lifted.

I checked the land in the State Register of Property Rights. The arrest was indeed lifted and there are currently no restrictions on the land, but lifting the arrest does not mean the criminal case will be closed.

Moreover, in 2019 the Pechersk court, in order to protect this land, decided to transfer it to the management of the National Agency of Ukraine for the identification, search and management of assets obtained from corruption and other crimes. But in March 2020 the Pechersk court cancelled that decision.

And now the most important thing – I managed to find a recent ruling of the Pechersk court on the same situation, on the same land, where the pre-trial investigation period was extended until January 11, 2022.

These are not the only court cases related to RC CREATOR CITY. But given the relevance of this criminal case, there is no point in listing all the others.

Investment scheme

The complex uses a preliminary purchase agreement for an apartment. That is, first you sign a preliminary agreement in which you agree that in the future, when the building is ready, you will buy an apartment here. Under this preliminary agreement you pay the cost of the apartment. After the building is commissioned, the Seller (the construction client or the company that has a contract with the client) first registers the finished apartment in its name and then sells it to you. At that stage you sign the main sale and purchase agreement and receive your housing.

From a legal point of view, this scheme poorly protects the buyer’s rights. But many developers use it and the main question is whether the complex has serious problems. After all, if the building is commissioned, you will not face the risks of this agreement. But if the building is not commissioned and you want to sue, the first thing the court will look at is your contract, and then the risks of this investment scheme will surface.

At the sales office I asked them to send me a draft of the preliminary agreement, and on its example I will give my recommendations. In the contract pay attention to the following points:

• You will sign the preliminary agreement with an Investment Fund. You should ask the sales office for the agreement between the construction client (the company BAU-Ukraine) and the Investment Fund with which you are concluding the contract. You must know on what grounds this Investment Fund operates and whether it has the right to sell you this apartment.
• In the contract you need to verify the correctness of the parties’ designation. I’ll explain what I mean. In the draft agreement it is stated:

But, a little earlier, when we talked about the land, I shared an extract from the property register. It clearly stated that ownership rights to the building after completion arise with LLC “BAU-Ukraine”. So, if we name the parties as indicated in the contract, it turns out that the Investment Fund received authority to sell you the apartment from PE Kreator. But according to the property register, the building after completion will belong not to PE Kreator Bud, but to LLC BAU-Ukraine.

This point MUST be clarified with the sales office and it is highly desirable that your trusted lawyer does this for you.

• The contract states a planned date for the building’s commissioning. This is not a very good formulation. It is only a planned date. It would be better if the contract specified a final deadline by which the building must be commissioned.
• The draft contract states that if the Seller violates the deadlines for concluding the main agreement with you, he must refund your money. But these deadlines are tied to the actual date of commissioning, not the planned date that was promised to you. So the countdown for signing the main agreement will start only when the building is commissioned. Until commissioning – you just wait.

Unfortunately, the realities of our real estate market are such that criminal cases against Kyiv developers are not surprising. Yes, developers solve these problems. Yes, not all court cases initiated by the prosecutor’s office, GASk or someone else have real grounds. Sometimes it rather resembles a fight for a valuable piece of land and a delay of construction. But in the case of RC CREATOR CITY it seemed to me that the criminal case is being actively pursued and it does not look like it will simply be swept under the rug.

Therefore, before investing in this complex it is really worth conducting a thorough analysis of both the preliminary agreement, which is not the best option for investment, and all the criminal cases that accompany the participants in the construction of this complex, and only then make a decision.

I have nothing against this complex and if such beautiful projects with excellent landscape solutions are built in Kyiv – that’s great. I’m only saying that before making a decision you need to gather as much information as possible.