INVESTOR’S LIABILITY FOR THE LEGAL AND FACTUAL SUITABILITY OF AN APARTMENT UNDER CONSTRUCTION

Abstract

The subject matter of this paper is an analysis of the investor’s liability to ensure that an apartment under construction constitutes, at the moment of delivery and legal transfer, a legally and factually suitable object of acquisition. The aim of the paper is to determine whether the investor’s liability towards the buyer may be understood solely within the framework of the traditional sale of property and the general rules of contractual liability, or whether it represents a more complex form of liability arising at the intersection of public-law requirements governing construction, contractual relationships established during the construction process, and the marketability of the final object of acquisition. The paper is theoretical in nature and is based on normative, doctrinal, analytical, and systemic methods, accompanied by an analysis of relevant domestic legal scholarly literature and applicable legal sources. The principal hypothesis of the paper is that the investor’s liability for the legal and factual suitability of an apartment under construction does not constitute a separate and autonomous legal institution, but rather a specific form of complex contractual and transactional liability, within which the existing rules of public law, the law of obligations, and property law are applied subject to certain specific features arising from the multistage nature of a construction undertaking. The results of the analysis demonstrate that the investor’s liability towards the buyer is not formed only at the moment of sale, but considerably earlier, through the planning, permitting, design, supervisory, and execution phases of the construction process. Consequently, the content of such liability cannot be adequately explained if the investor is viewed merely as a seller or merely as the employer of works under the construction contract.