Question 1. What is a real estate?
Answer: Real estates are considered the parcels of land, subsoil plots, isolated water objects, the woods, perennial plants, underground and aboveground, including also buildings, constructions, and other estates attached to the ground.
Question 2. What is a Fundamental Structure?
Answer: Fundamental is considered the building, which is the predominant (main) among other buildings on the land, based on the features of the fundamentality of the construction, architectural composition and aim of significance. More than one fundamental building can be located on the same land.
Question 3. What is an ancillary structure?
Answer: Ancillary is considered the building that is of secondary importance to the fundamental building on the same land. Ancillary buildings include livestock buildings, granaries, larders, haylofts, woodsheds, private garages, sheds, cellars, etc., and yard structures.
Question 4: What is an unauthorized structure?
Answer: Unauthorized structure is considered a building, a construction or other structure built or reconstructed on a land plot not allocated for that purpose in the manner established by the law or other legal acts, without permission or with significant violations of the terms defined by the permission or norms and rules of urban development. An unauthorized structure located on state or community property is recognized as state or community property, regardless of who built it. The unauthorized structure is recognized as the property of the person who owns the land on which the structure is located.
Question 5. What is the property acquired during the marriage? In what shares is the property acquired by the spouses during the joint marital life divided?
Answer: The property acquired by the spouses during the marriage is their joint property, unless otherwise provided by law or by the contract concluded between them. The property of each spouse before the marriage, as well as the property received by one of the spouses as a gift or inheritance during the marriage, is his/her property. Property for personal use (clothing, shoes, etc.), except for valuables and luxury items, even if it was acquired at the expense of the spouses' common means during the marriage, is considered the property of the spouse who used the property. The property of each spouse can be recognized as their joint property, if it turns out that during the marriage investments were made at the expense of the common property of the spouses or the personal property of the other spouse, which significantly increased the value of that property (major renovation, reconstruction, re-equipment, etc.) if not otherwise provided for in the contract concluded between the spouses. For the obligations of one of the spouses, confiscation may be applied to the property owned by him/her, as well as to his/her share in the joint property of the spouses.
Question 6. What is inheritance? Who are considered heirs?
Answer: The property (inheritance) of the deceased passes to other persons without change, as a whole, in the manner prescribed by law. Inheritance is made by will and by law.
The inheritance is made according to the law, if there is no will or there exists a will, but it does not define the fate of the entire inheritance of the predecessor.
In case of inheritance according to the law, the heirs are invited to inherit in the following order:
a) first of all, the children of the heir, the spouse and the parents. The grandchildren of the heir inherit with the right of representation.
b) secondly, the heirs are the birth siblings with the same father or mother. The children of the heir's brothers and sisters inherit with the right of representation.
c) third, the heirs are both the paternal and maternal grandparents of the predecessor.
d) fourth - the brothers and sisters of the heir's parents (uncles, aunts).
Question 7. How to receive the inheritance?
Answer: The co-heir of the inheritance must accept it, it must be done within six months from the moment of opening the inheritance. The inheritance is accepted:
a) submitting the application of the heir to accept the inheritance or to receive a certificate of inheritance right to the notary of the place of opening the inheritance.
(b) the inheritance is deemed to have been accepted by the heir when he/she begins to actually own or manage the inherited property.
In case of non-observance of the six months, the person can accept the inheritance, if all the other heirs who have accepted the inheritance have given their consent, or when the heir who missed the six-months period can prove in court that he/she did not know, did not have to know about the opening of the inheritance and that he/she has applied to court within six months after the elimination of the causes of missing the term.
Question 8. What is inheritance transmission?
Answer: If the heir invited by the will or by law for inheritance dies after the opening of the inheritance, not managing to accept it, the right to accept the inheritance due to him/her passes to his/her heirs. In the case of hereditary transmission, the heir may accept the inheritance during the remaining period of the inheritance, and if that period is less than 3 months, it is extended. The right to accept the inheritance of the deceased heir is exercised by his/her heirs on the general principles provided for in Chapter 73 of the RA Civil Code.
Question 9. What is the difference between a will and a donation?
Answer: The Will and the Donation differ from each other in that after making a donation, the person can not return the property and in case of a will, the will can be changed at any time. The donation can only be returned if it is not proven that the donor was mentally unbalanced at the time. And it is very difficult to prove it. In case of a will
The testator has the right to cancel, amend or supplement his/her will at any time after making a will, and he/she is not obliged to state the reasons for canceling, changing or supplementing the will. In our opinion, a will is the right choice because it is safe and secure.
Question 10. What is a Notary public and what actions does he/she perform?
Answer: A notary public is a person providing public services contributing the administration of justice, who, on behalf of the Republic of Armenia, in accordance with the RA Constitution and the laws, carries out notarial actions and services provided by this law. A notary performs notarial actions by ratifying documents or providing certified documents or performing other actions provided by law. The notary, certifying the document, confirms its legality, certifies the full probative force of the document. A notary has the right to provide services, including legal aid, advice, clarification or legal opinion, or drafting transactions or other legal documents, performing other legal services, as well as other functions ensuring the performance of notarial actions.
Question 11. Which institutions can carry out notarial actions?
Answer: RA diplomatic missions and consular institutions in foreign countries are authorized to notarize the documents intended for use in the RA. They may legalize documents intended for use in foreign countries that are related to the citizens of the Republic of Armenia, as well as the documents belonging to foreign citizens or their copies that relate to their activities and residence in the Republic of Armenia. Diplomatic missions and Consular institutions perform the following notarial actions:
a) ratify transactions, contracts, powers of attorney, agreements;
b) take measures for the protection of inherited property;
c) certify the accuracy of the copies of the documents (photocopies) and their extracts;
d) certify the authenticity of the signatures on the documents;
e) certify the accuracy of the translation of the document from one language to another;
f) confirm the fact that the citizen is alive, is in a certain place;
g) confirm the identity of the person in the photo and the citizen;
h) confirm the time of submission of documents;
i) accept documents for safe custody.
Question 12. How is real estate traded?
Answer: The contract for the sale of real estate is concluded in writing by drawing up one document signed by the parties. The contract for the sale of real estate is subject to notarization, and the transfer of ownership of real estate to the buyer is subject to state registration. The rights arising from the transactions (except for unilateral transactions) aimed at the origin, change, transfer of rights towards the real estate must be submitted to state registration no later than within 30 working days from the date of notarization of those transactions. The state registration of the right is done on the 4th working day from the day of submitting the application, and for shorter periods a surcharge defined by law is charged.
The contract can be concluded in the State Committee of the Real Estate Cadastre, as well as at the notary public. The following are submitted to the RA State Committee of Real Estate Cadastre for the registration of rights towards the real estate:
a) an application;
b) a copy of the applicant's identification document (passport);
c) the original legal document (sales contract) required for registration;
d) Receipt of state duty payment.
Question 13. Which buildings and structures are considered objects taxable with property tax?
Answer: According to the Law of the Republic of Armenia "On Property Tax" objects taxable with property tax are considered:
a) apartments in apartment buildings;
b) non-residential areas in apartment buildings (basement, semi-basement, opening, attic, upper story, etc.).
c) individual residential houses, garden houses (summer houses) and ancillary buildings adjacent to them;
d) separate garages;
e) buildings of public significance;
f) buildings of industrial significance;
g) unauthorised buildings or structures built on the land by persons with the right of ownership or use of land, including unauthorised structures in apartment buildings or adjunct to buildings.
Question 14. What is a mortgage and when is a mortgage loan provided?
Answer: A pledge of the right to construct a real estate as well as a plot of land is called a mortgage. A mortgage loan is provided to buy, renovate, or build a house by mortgaging the house, and in the case of housing the plot land, the right to the housing of the plot land is pledged.
Question 15. What is the income tax and how to use it in case of buying an apartment with a mortgage?
Answer: Income tax is a direct tax paid by taxpayers to the state budget of the Republic of Armenia in the manner, amount and within the terms defined by the RA Law “on Income tax”. According to the decision of the RA Government as of September 14, 2018, on making amendments and additions to the decision N 98-N of the Government of the Republic of Armenia of January 29, 2010, the legislative possibility of income tax refund will apply to hired individuals:
a) in case of purchasing an apartment directly from the developer in a constructed or under construction residential apartment building;
b) in case of purchasing a private dwelling house directly from a developer who is an organization or a sole proprietor in residential districts or complexes, or if the borrower with a given mortgage loan builds a private dwelling house on the land plot owned by him/her with a legal construction permit.
Question 16. How often and with what amount is realized income tax refund?
Answer: Mortgage interest payable/returned interest is refundable on a quarterly basis to hired individuals.
The amount of income tax calculated from the salary and from equalized to it payments to the given hired employee during the respective quarter is subject to refund, taking into account the following restrictions:
a) the value of the apartment to be aquired / apartment under cnsotruction / should not exceed 55,000,000 AMD
b) The quarterly sum of interest payable/returned on the mortgage loan may not exceed 1,500,000 AMD.
Question 17. How is the apartment lease contrct concluded?
Answer. Under the lease contract, the lessor or his/her authorized person is obliged to transfer to the temporary possession and (or) use of the lessee a living space (apartment, dwelling house) against a fee. The living space lease contract is concluded in writing and is subject to notarization. Failure to keep the notarial form of the contract will invalidate the transaction. Such a deal is null and void. The rights arising from the living space lease contract are subject to state registration with the State Committee of Real Estate Cadastre adjunct to the Government of the Republic of Armenia.
The lease contract is concluded for the term specified in the contract. If the term of the lease is not specified in the contract, the contract is considered concluded for an indefinite period. In that case, each party shall have the right to withdraw from the lease agreement at any time by notifying the other party three months in advance.
Question 18. What is the period of limitation of acquisition?
Answer: A citizen or legal entity that does not own the real estate, but has owned it in good faith, openly and continuously for 10 years, acquires the right of ownership towards that property. A person referring to the period of limitation of possession may add to the period of possession the time during which the property was owned by the person whose legal successor he/she is. Prior to acquiring the right of ownership towards the property by virtue of the period of limitation of acquisition, the person holding the property as an ownership has the right to protect it from third persons who are not the owners of the property and have no right of possession over it on other grounds provided by law or contract. The right of ownership over real estate arises from the moment of state registration of that right by the person who acquired the property by virtue of the period of limitation of acquisition.
Question 19. What are the differences between shared and joint ownership?
Answer: The property owned by two or more persons belongs to them under the right of common ownership. If the share of each of the owners in the common property is determined, then the form of ownership is called shared. In case of shared ownership, the shares are indicated in fractional terms in the certificate of ownership, and in case of joint ownership, only the names, surnames and patronymics of the owners are mentioned in the certificate, without fractional numbers.
Owners of jointly owned property may decide their shares by mutual agreement, or if there is no agreement, one of the owners may go to court to claim his/her share in the common property.
The property under shared ownership is managed with the consent of all its participants.
The jointly owned property is managed with the consent of all participants, regardless of which of the participants enters into the property management transaction.
Question 21. What are the grounds for declaring bankruptcy? Who can apply for bankruptcy?
Answer. Bankruptcy application can be filed against both a legal entity and an individual. The debtor can be declared bankrupt by a court decision on his/her own initiative (voluntary bankruptcy application) or at the request of the creditor (forced bankruptcy application).
On the basis of a compulsory bankruptcy application, the Debtor may be declared bankrupt by a court decision if:
• the obligation is overdue for more than 60 days;
• The debtor's debt exceeds 1 million drams;
• The debtor's debt is substantiated by a document or a court decision; there is no outstanding liability.
On the basis of a voluntary bankruptcy application, the Debtor may be declared bankrupt by a court decision if:
• if the liabilities exceed 1 million drams,
• The debtor's assets were valued at less than 1 million AMD.
Compulsory bankruptcy application may be filed jointly by one or more creditors, and the right to file and withdraw voluntary bankruptcy have on behalf of legal entities - their bodies or their representatives acting within the powers vested in them by law or charter and on behalf of a physical person - the physical person or his/her representative.
From January 1, 2019, bankruptcy case management is realized in the Bankruptcy Courts, and all bankruptcy cases in the Republic of Armenia are transferred to the Bankruptcy Court within one month.
Question 22. What is a donation? What is the difference between a donation and endowment?
Answer: The donation is made by a donation cntract, by which one party (donor) transfers or undertakes to transfer a property to the other party (donee) free of charge or undertakes to transfer a property or a property right (claim) towards himself or towards a third person, or releases or undertakes to release him/her from the property obligation toward himself or towards a third person. The donation contract is concluded in writing, and it is subject to notarization.
The donee has the right to refuse the gift at any time before handing it to him/her. In this case, the donation contract is considered terminated.
A donation of property or rights for socially useful objectives is recognized as an endowment.
Endowments can be made to citizens, medical, educational institutions, social protection and other similar institutions, charities, scientific and educational institutions, foundations, museums and other cultural institutions, non-governmental and religious organizations, as well as the state and communities. Moreover, no permission or consent is required to accept an endowment. The endowment of a property by the grant maker to a citizen must be conditioned, and to legal entities, it can be conditioned by using it for a certain purpose. In the absence of such a condition, the endowment made to a citizen is considered an ordinary donation. In other cases, the endowed property must be used by the donee in accordance with its purpose.
If, due to a change in the situation, the use of the endowed property becomes impossible in accordance with the purpose set by the grant maker, it can be used for another purpose only with the consent of the grant maker, and in case of death of the grant maker or liquidation of the legal entity - by court decision.
If the recepient has used the endowed property in a manner inconsistent with the grant maker's designated purpose, or that designation has been changed in violation of the above rules, the grant maker, his or her heirs or other successor shall have the right to request the cancellation of the endowment.
Question 23. What is the Found property and how to deal with it?
Answer: The finder of the lost property is obliged to immediately inform the person who lost the property or the owner of the property or the person he/she knows who has the right to receive the property and to return it. If the property is located in a building or vehicle, it must be handed over to the owner or possessor of that building or vehicle. In the mentioned cases, the person to whom the found property is handed over acquires the rights of the person finding the property and bears his/her responsibilities.
If the person entitled to claim the return of the property or its location is unknown, the person finding the property must report the found property to the police or local government.
If, within 6 months of the notification to the police or the local self-government body, the person entitled to receive the found property has not been found or has not declared his/her right towards the property to the person who found it, the police or local government body acquires ownership of the property. If the finder of the property refuses to turn the found property into property, it becomes the property of the community.
If the person who found the property has reported to the relevant persons or bodies, he/she is entitled to receive from the latter a compensation of expenses of up to 20% of the value of the property. If the found property is of value only to the person entitled to receive it, the amount of its remuneration is determined in agreement with that person, and in case of failure to obtain an agreement, in court.
Question 24. For how long are residence statuses granted? What rights do persons who have acquired residence status in the Republic of Armenia enjoy?
Answer: There are three types of residence statuses in Armenia.
1. temporary (given for up to 1 year, with the possibility of extension for 1 year each time),
2. permanent (given for a period of 5 years, with the possibility of extension for the same period each time);
3. special (given for a period of ten years. It can be given more than once.
The documents confirming the listed residence statuses are the temporary residence card, the permanent residence card and the special passport.
In case of obtaining residence status, persons are allowed to enjoy the following rights:
• Right to work
• The right to basic general education;
• The right to receive medical care;
• The right to social security;
• The right to carry out entrepreneurial activity.
At the same time, persons who have acquired residence status cannot:
• Participate in national elections;
• serve in the RA Armed Forces;
• Have ownership of the land.
Question 24. In what order is the money received from the sale of the Debtor's property distributed among the claimants?
Answer: The sums received from the sale of the debtor's property, including the sale of the debtor's property, as well as the value of the property subject to confiscation, are distributed in the following order in case of more than one claimant:
1. the claims secured by the debtor's property are satisfied;
2. court and enforcement costs are covered;
3. the amount of the fine imposed on the debtor during the compulsory execution is paid;
4. Alimony claims for damages to life or health, as well as obligations to compensate for damage caused by a crime are satisfied;
5. the requirements for the payment of remuneration under employment and copyright contracts and the mandatory social payments arising from their satisfaction are met;
6. Liabilities towards the state budget of the Republic of Armenia and towards the budgets of the communities are satisfied, as well as the obligations conditioned by the mandatory state social security payments;
7. The claims of the other claimants are satisfied, according to the order of submission of the writ of execution, except for the cases provided by this article.
The distribution of the money received from the sale of the property among the claimants is done by the compulsory enforcement officer. The requirements of each order are met after the requirements of the previous order are fully met. For example, only the court and enforcement costs are satisfied after the claims secured by the property received from the sale of the debtor's property are fully repaid.
If the claimants of the same order submit the writs of execution on the same day, the claims of the writs of execution are satisfied in proportion to the amounts to be satisfied.
Question 25. What is an Exchange Contract?
Answer: Under an exchange contract, each party undertakes to transfer the goods to the other party as property in exchange for other goods. The rules of purchase and sale shall apply mutatis mutandis to an exchange contract, provided that this does not contradict the essence of the provisions of the exchange contract. Under the exchange contract, each of the parties is considered the seller of the goods that he/she is obliged to deliver, and the buyer of the goods that he/she is obliged to accept in exchange.
The goods to be exchanged shall be deemed to be equivalent and the costs of delivering and accepting them shall in each case be borne by the party having the relevant obligations, unless otherwise provided by the exchange contract.
In the event that the goods exchanged in accordance with the exchange contract are deemed inadequate, the party who is obliged to deliver the goods whose price is lower than the price of the goods presented by the other party for exchange must pay the price difference before or after fulfilling its obligation, if not otherwise defined by the contract.
Question 26. What is a legal entity? What types are there?
Answer. The most important precondition for carrying out entrepreneurial activity is the establishment of a legal entity.
A legal entity is an organization that has separated property as an ownership, and is responsible for its obligations with that property, can acquire and exercise property and personal non-property rights on its behalf, bear responsibilities, appear in court as a plaintiff or defendant.
Legal entities can be commercial and non-commercial.
Legal entities that are commercial organizations can be established through economic associations or companies.
Legal entities considered to be non-commercial organizations may be established through non-governmental organizations, foundations or other forms provided by law.
As for Cooperatives, depending on the nature of their activities, they can be both commercial and non-commercial.
Contact us for more details.
Question 27. Is it possible to acquire the right to limited use of someone else's property?
Answer. According to the RA Civil Code, everyone has the right to limited use of someone else’s property (right of servitude).
The right of servitude arises in the case when, for example, a person who has a dwelling house and adjacent plot of land, where access is possible only when passing through a part of the neighbour’s plot. The granting of such a right may be voluntary or compulsory.
Voluntary property servitude is defined with the written consent of the person requesting the servitude and the owner of the serving property. The contract on establishing a voluntary property servitude must indicate the subject of the servitude, the validity period, the amount of compensation and the conditions.
A compulsory property servitude may be established to pass through, walk through adjacent or other plot, pass and operate power transmission, communication lines or pipelines, carry out water supply, land reclamation, renovation, construction works, or to satisfy other needs of the owner of a priority property, which cannot be provided without servitude or whose provision is associated with disproportionately significant costs. Compulsory property servitude is established by the court at the request of the person requesting servitude in case of disagreement on the establishment of voluntary property servitude.
It is necessary to mention that in case of encumbering the real estate with property servitude, the property owner is not deprived of the rights to own, use and dispose of that real estate, which he can exercise without violating the restrictions provided by the servitude.
Question 28. What are the ways of acquiring property rights over a real estate?
Answer: Real estate ownership can be acquired by the following ways:
a) through alienation, when there is an action of both parties or the law, as a result of which the right of ownership over the real estate passes from one person to another. It includes the purchase (sale) of real estate, donation, exchange, privatization of state-owned real estate, as well as foreclosure by judicial order.
b) by will, when the right of ownership over the real estate passes from one person to another after the death of the owner, according to the will of the latter;
c) by legal succession or inheritance, when the right of ownership passes from one person to another in the absence of alienation or will.
How is the apartment lease contract concluded?
Answer: Under the lease contract, the lessor is obliged to transfer to the temporary possession and (or) use of the tenant a living space against a fee. The living space lease contract is concluded in writing and is subject to notarization and the rights arising from the living space lease contract are subject to state registration with the State Committee of Real Estate Cadastre adjunct to the Government of the Republic of Armenia. Failure to keep the notarial form of the contract will invalidate the transaction. Such a deal is null and void.
Therefore, in order to avoid problems arising from the contract, we recommend that it be notarized and state registered when concluding a lease contract.
