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False purchase and falsified sale of apartments in the Republic of Armenia

A falsified deal is a deal that is made without any intention to create legal consequences. In fact, the contract of sale may be executed in compliance with all the requirements of the legislation of RA, but the change of ownership takes place only formally. In practice the owner of the property, and the user of said ‘sold’ property remains the original owner. The purpose of this types of transactions is to release the property from the seller of the property in respect of which the penalty for his/her debts cannot be carried out. After all, if there is no property, savings, income, then the debt payment in reality is not possible.

This practice is quite widespread in the Republic of Armenia when debtors try to transfer the nominal ownership of the apartment/property/business to a trustee and/or close persons. This explains the large number of cases in the courts of RA connected with the defense of alleged and/or falsified transactions.

Challenging the alleged transaction in the Republic of Armenia

To legally recognize the transaction as invalid it is necessary to prove the fact that the former owner has kept the connection and interest in the property and still uses it. For this purpose one can attract the neighbors as witnesses who may confirm that the latter still lives in this property. One can also contact the police in order to verify the fact that the seller is staying in the property, after which an official protocol is drawn up, that will be legally binding and can be used as evidence in courts.

Other forms of evidence to serve in proving the falsified transactions may be lack of official paperwork registering the alleged sale and/or transfer of property with the appropriate legal registries in the RA, or a document confirming payment of the purchase price of the property. Additionally lack of named deeds to the property is also considered strong evidence of falsified sale. Often times a written response may be submitted to request a statement of the alleged buyer’s income level, which is supplied to the tax bodies of RA. Often, the alleged buyer may be a person that is simply not able to afford the purchase of an apartment and/or other property, and thus, the court will be able to prove that the property was handed over in order to conceal assets from the creditors. This is strong grounds for invalidation of the alleged transaction.

Actions taken by alleged seller and buyer in false transactions

When attempting to falsify a sale the parties concerned are acutely aware that the transaction must comply with all legal requirements. Therefore all their actions are usually thought out in advance, or as they know, the court will find the transaction invalid. The contracting parties often resort to a number of different actions. There are cases where the buyer is doing everything possible to prove actual use and care of the purchased apartment: getting registered at the address of the apartment, paying for the utilities and property taxes in their name, concludes contracts for repairs or the supply of goods to the address, while the alleged seller makes a loan agreement, to show where the money from the sold property were sent.

The transactions that are registered in the database of the State Registry of real estate in RA, are rather difficult to challenge. Therefore one should pay close attention to the actions that preceded the state registration. Especially pay attention to the presence or absence of a written receipt of transfer of moneys, as the contract of sale in and of itself does not always confirms the receipt of moneys. Additionally pay attention to existence of named and dated deeds to the property in question, since this document captures the moment of transfer of property from the seller to the buyer.

If these documents are made by the parties of the alleged transaction, it is necessary to request a full examination. This is to establish whether the sides have resorted to forgery and falsification of evidence. The falsification or forgery of official legal documents, including with respect to this paragraph is punishable by law and carries criminal liability. Should it be established by way of forensic examination that the deeds, or transfer of funds was made later than the date specified therein, then these facts will prove the fact of falsification of official state documents.