Nowadays you can buy everything, or almost everything, with cryptocurrency. And you need to protect yourself when it comes to such serious things as the purchase and sale of real estate, and most importantly, what rules should be followed when drawing up such contracts. It is in the legal aspects of transactions for “cryptocurrency” that we will try to understand our material today. For there is no absolute recipe in nature, but there are some ideas in this regard, taking into acco...
unt existing realities.
The total capitalization of the top ten cryptocurrencies in the world currently, according to experts, reaches more than 300 billion US dollars. And this figure continues to constantly grow. It should be noted that this process has a two-vector tendency, that is, it is directed not only towards investing in digital currencies, but also vice versa - towards the acquisition of various assets for it. The acquisition of houses and apartments has always been considered the most reliable, albeit old-fashioned, method of investment.
There are many cases of cryptocurrency transactions for the sale of real estate in the world.
The first home purchased with digital currency was in Canada in 2013. A local resident, having valued his house at $405 thousand, allowed the buyer to pay for the purchase with BTC (at that time, 1 BTC was equal to $45). In 2014, a mansion in Israel was sold for 5,000 BTC, which at that time was about $3 million. Similar examples occurred in other cities around the world: Miami, New York, Toronto, Dubai and others. Selling villas for Bitcoin at resorts (in Bali, for example) is especially popular.
In Ukraine, the first cryptocurrency transaction for the purchase of real estate was registered in the fall of 2017. The purchase took place in Kyiv and became the first transatlantic operation. The seller was New York resident Mark Ginzburg, who owned an apartment in the Ukrainian capital and decided to sell the apartment to Michael Arrington, also a resident of America. The apartment was valued at 212.5 ETH, which at the then exchange rate was the equivalent of 60 thousand US dollars. Moreover, the transaction took place with the participation of several legal organizations. Support for the purchase/sale process on the American side was undertaken by Velton/Zegelman, and Ukraine was represented by the law firm Juscutum. The legality of the operation was also confirmed by the Electronic Governance Agency of Ukraine.
Having walked through popular foreign and post-Soviet real estate sites, we drew attention to the fact that advertisements for the sale of luxury real estate often offer cryptocurrency, and not just Bitcoin, as an alternative to payment. Here are some of these advertisements:
- https://www.redfin..com/FL/Miami/480-NE-30th-St-33137/unit-2206/home/43370743
- https://www.olx.ua/obyavlenie/kottedzh-421-kv-m-s-vishenki-ul-zoryana-ryadom-kgzoloche-hozyain-IDyJ8Mq.html
- https://www.olx.ua/obyavlenie/dom-osobnyak-IDBEL3T.html
- https://www.olx.ua/obyavlenie/prodam-dom-IDBSlpN.html
- https://www.olx.ua/obyavlenie/prodam-dom-za-bitkoiny-v-sovinone-lyustdorf-vozle-morya-s-mebelyu-IDAnHLS.html
- https://www.avito.ru/moskva/doma_dachi_kottedzhi/kottedzh_420_m_na_uchastke_14.2_sot._987358462
It seems that the choice of one or another cryptocurrency when calculating, as well as the exchange rate itself, is rather a matter of private agreements with the seller, who is a priori ready for the cryptocurrency option transactions.
Despite the fact that selling real estate for cryptocurrency is becoming popular around the world, in most countries, purchase and sale transactions for virtual currency are illegal. And this is due to the fact that the state. Regulators in such countries recognize only the national currency as the only legal form of payment.
But still, if the buyer and seller of real estate for cryptocurrency have agreed on the price and other conditions, how to competently formalize such a transaction legally?
We will give specific examples of “way out of the situation” according to domestic legislation, which has common roots in countries such as Ukraine, Russia, Georgia, Belarus, etc. Today, the legal status of cryptocurrency as an object of civil rights is not thoroughly defined at the legislative level in these countries. Moreover, cryptocurrency cannot act as an official means of payment.
Therefore, when drawing up a real estate purchase and sale agreement, the notary will have to be guided simultaneously by several related rules of law. That is, to apply, whenever possible, the norms of an exchange agreement, and in the case of a direct prohibition, to apply the norms of a mixed agreement, where, in addition to the “purchase and sale block,” additionally implement the legal “block on the alienation (assignment) of property rights.”
It is also possible to provide a design with an alternative obligation on the buyer’s side, where he may be able to pay for the property in both cash and cryptocurrency. This contractual structure will significantly reduce the risk of the contract being recognized as worthless.
An option mechanism can be considered as an additional option to the main contract..
That is, in accordance with the option agreement, the buyer undertakes to transfer the cryptocurrency to the other party (seller) in exchange for the funds he owes under the real estate purchase and sale agreement. An agreement for the purchase and sale of real estate for cryptocurrency is divided into two documents: the main agreement for the purchase and sale of real estate and an option agreement, which simplifies the registration of rights to real estate in state registers, where only the agreement for the purchase and sale of real estate is provided.
Thus, it is possible to buy real estate for cryptocurrency and correctly execute the transaction. So far this is a complex and time-consuming process. But in the future, with an increase in supply and demand in the real estate market, the transaction process will become more refined and more realistic. And after the introduction of smart contracts, execution of real estate transactions will become cheaper and more transparent.
According to https://bitcryptonews.ru/analytics/blockchain/dom-dlya-kriptobiznesmenov-kak-prodat-i-kupit-nedvizhimost-za-bitkoinyi
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