Commission‑Based Real Estate Transactions and Purchaser Protection: Contingent Obligations and Expectant Rights

The paper substantiates the admissibility of commission transactions involving real property, taking into account Article 996(1) of the Civil Code of the Russian Federation, and proposes mechanisms for protecting an acquirer under such a transaction. Distinguishing among several models of a commission mandate makes it possible to delineate the scope of the debate concerning the permissibility of such transactions and to demonstrate that the issue should not be framed as one of their absolute prohibition, but rather as the admissibility of a commission agent's disposition of the principal's real property. It is argued that such disposition is possible where the principal confers dispositive authority upon the commission agent; this may be presumed where the commission agreement adopts a model under which the commission agent not only concludes the contract but also independently enters into the dispositive transaction. With respect to a commission for the purchase of real property, the article maintains that registration of title directly in the name of the principal reflects policy considerations, whereas interim registration in the name of the commission agent undermines the public reliability of the register. The Supreme Arbitrazh Court of the Russian Federation has failed to address the risk that a commission agent may be unable to perform its obligation in kind, thereby jeopardizing the acquirer's interests. To resolve these issues, the study proposes using the construct of the commission agent's conditional obligation and an expectancy right in the form of a registrable encumbrance over real property, including the possibility of its provisional registration in favor of a future unidentified person, followed by subsequent identification. It concludes that these approaches ensure a balance of the parties' interests and the stability of civil transactions.

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