Buying an apartment in a new build: the developer contract and the risks
An apartment in a building under construction is cheaper and newer, but you are paying for something that doesn't exist yet. How to check the developer and the plot, what the contract should contain and how to reduce the risks.
Contents
How buying during construction works
Until the building is completed and commissioned, ownership of an individual apartment generally cannot be registered: the unit does not yet exist in the Cadastre. So the buyer and developer first sign a contract with obligations for the future — most often a preliminary sale contract with a payment schedule — and the main contract and registration of title follow once the building is completed.
Keep in mind: under the Civil Code a preliminary contract takes the form of the main contract (Article 445), and a contract for the sale of real estate must be notarised (Article 562). If the developer offers a different structure — an investment agreement, a construction participation agreement or something else — ask a notary or lawyer to explain what rights it gives you and what happens if deadlines are missed.
Check the developer and the plot
- Who owns the plot or holds the development right: order a Cadastre extract for the land — information on rights is available to anyone.
- Whether the plot is mortgaged or has other restrictions — this also shows in the extract.
- Whether there is a building permit, and for how many storeys and what floor area: ask the developer for a copy.
- Which buildings the company has already delivered, whether on time, and how they look a few years on. Go there and talk to the residents.
- Whether banks work with the project. A bank mortgage is not a guarantee, but it is an extra check on the project.
What the contract should contain
- An exact description of the apartment: floor, number, design area and layout — ideally with the floor plan attached.
- How the price is recalculated if the actual area after measurement differs from the design area.
- The condition on handover: shell, basic finish or full finish — with a list of works.
- The deadline for commissioning the building and for signing the main contract.
- A payment schedule tied to construction stages, not just to dates.
- The developer's liability for delay and the procedure for cancelling with a refund.
- Who registers ownership and when, and who pays the related costs.
The main risks and how to reduce them
| Risk | How to reduce it |
|---|---|
| Construction delayed or frozen | A proven developer, stage-based payments, a penalty clause |
| The apartment is sold to two buyers | A notarised contract, a check of rights to the plot, payment through a bank |
| Wrong area or layout | Floor plan attached to the contract, price adjustment for any difference in area |
| Quality worse than promised | A list of works in the contract, an inspection before signing the acceptance certificate |
| Building finished but nobody manages it | Find out in advance who will manage the building and for what fee |
Mortgages for new builds
Banks lend for apartments in buildings under construction, but terms depend on the bank and the project. In Yerevan, the income tax refund on mortgage interest for primary-market purchases no longer applies to loans taken out from 1 January 2025, except for projects with a building permit issued before 1 January 2022 (data as of June 2026). Before signing, check with the bank that it lends on this particular building, and estimate the payment with the mortgage calculator.
Key points
- In a building under construction you are buying the developer's obligation, not a finished flat — so checking the developer matters more than the price.
- Sign the preliminary contract for an apartment at a notary and tie payments to construction stages.
- Check rights to the plot in a Cadastre extract and ask to see the building permit.
- Put deadlines, area, finish and liability for delay into the contract.
