By AZE.US
Baku homeowners whose properties are slated for demolition may gain more by accepting an apartment in the replacement building than by taking cash compensation, according to a local real estate expert.
Under Baku’s development master plan through 2040, aging and structurally unsafe buildings and residential blocks are being demolished in several parts of the capital and replaced with modern high-rise complexes.
Property owners affected by such projects are generally offered a choice between monetary compensation and an apartment in the new building, real estate expert Anar Nasirov told Demokrat.az.
Nasirov said accepting a replacement apartment – particularly one with additional floor space – could ultimately be more profitable. Newly completed apartments are typically offered at higher market prices once construction ends, while owners who take cash may struggle to purchase comparable housing in the same neighborhood.
“If we compare receiving money with obtaining an apartment in the building that will be constructed on the site, the second option may be more profitable,” Nasirov said. “The owner can receive a new apartment with additional square meters and later sell it at a higher price.”
Four Terms Owners Should Negotiate
According to Nasirov, an agreement between the property owner and developer should address four main issues.
The first is the exact size of the property being demolished. The home must be measured, and the recognized floor area should be recorded in writing and approved by both parties.
The second is the size and specifications of the replacement apartment. The contract should state how many additional square meters the owner will receive, along with other essential details about the future property.
The third issue is whether the apartment will be delivered fully renovated or unfinished. Owners may accept a completed apartment or take the money allocated for renovations and arrange the work themselves.
The fourth concerns temporary housing. After the original building is demolished, the developer is expected to cover the owner’s rent until the replacement apartment is completed and formally handed over.
The monthly rental payment, payment schedule and duration of the developer’s obligation should all be clearly included in the written agreement.
Why Cash Compensation May Be Riskier
An owner who accepts a lump-sum payment could find that the money is insufficient to purchase a similar apartment in the same area, particularly if property prices rise while negotiations and redevelopment are underway.
By contrast, a newly built apartment may offer additional floor space and a higher resale value. Nasirov said the replacement option could remain financially preferable even if the unit is delivered without final interior finishing.
However, the actual benefit depends on the project’s location, the amount of additional space offered, construction deadlines and the developer’s compliance with the agreement.
For affected homeowners, the most important step is therefore not simply choosing between cash and an apartment. Every commitment – including floor area, additional space, renovation status, rental payments and the delivery deadline – should be specified in the contract before the property is vacated.
AZE.US