AZE.US
Apartment buyers in Azerbaijan may seek compensation from a developer if the property’s actual usable area is smaller than the size specified in the purchase contract, according to guidance from the country’s Supreme Court.
However, a difference between the area listed in the contract and the figure recorded in the state property registry does not automatically mean that the developer breached its obligations.
The Supreme Court said courts examining such disputes must first review the terms agreed upon by the buyer and the construction company.
If the contract specifies how the apartment’s area should be calculated, such as by internal measurements, external measurements or urban planning rules, the dispute must be resolved based on that method.
If the contract does not establish a calculation method, an on-site inspection should determine whether the apartment’s actual usable area matches the figure stated in the agreement.
Usable area is calculated without including external and internal walls, railings and certain other structural elements. The reduction coefficients applied under urban planning and construction regulations are also excluded from this measurement.
If the inspection confirms that the usable area matches the contract, the developer is considered to have fulfilled its obligations. If the apartment is smaller, the buyer may claim compensation for the missing square meters.
Why the Registry May Show a Smaller Area
The area recorded in the state property registry is often lower because balconies, terraces and some other open spaces are calculated using a reduction coefficient.
Under the applicable methodology, these areas are included in the apartment’s total size at a coefficient of 0.3 because they do not have the same functional value as residential rooms.
For example, a 10-square-meter balcony may count as only three square meters when the apartment is registered.
The Supreme Court stressed that this accounting method does not physically reduce the apartment’s size. It is used to ensure that properties are recorded under a uniform methodology.
Unless the contract specifically states that the apartment’s area will be calculated under those rules, a smaller figure in the registry does not by itself prove that the developer violated the agreement.
Compensation May Reflect Current Market Prices
If an inspection establishes that the apartment’s usable area is smaller than promised, the buyer may demand payment for the missing space.
The compensation can be calculated using market prices in effect when the dispute is considered, rather than only the price per square meter paid when the apartment was purchased.
Any renovations or layout changes made by the owner after taking possession should not be counted against the developer. In such cases, the apartment must be assessed based on its condition when it was delivered and the original project documents.
Buyers Have Five Years to File a Claim
A five-year statute of limitations applies to claims involving the improper fulfillment of an apartment purchase contract. The period begins on the date the buyer physically takes possession of the property, not when the state registry extract is issued.
The Supreme Court said buyers have a reasonable opportunity to verify whether the apartment’s dimensions match the contract when taking possession or shortly afterward.
Even if a shortage is later confirmed, a court may reject a claim filed after the five-year deadline if the developer invokes the statute of limitations.
AZE.US