Mongolia Properties

The process for buying an apartment in Ulaanbaatar is relatively straight forward. Below are described the various steps required to complete the transaction:

The Negotiation Process

Negotiation in Mongolia is often tricky. Many Mongolians still find the concept alien and the asking price is final. It is often better and more rewarding to negotiate not on the price but on other matters such kitchen cabinets, lamps, curtains, the fridge or TV, furniture and so forth. If you like some of the things in the apartment you are more likely to win a negotiation over those than price. Nevertheless, it is essential to negotiate on price. Other subjects of negotiation are the time at which the person can move out, and more importantly the Property Tax (2%) and the Legal costs. It is often the case that the seller will agree to split them or at least to take part in the costs. Mongolians can be very stubborn in their negotiations and it can sometimes be a very demanding and frustrating process, as a verbal agreement is always liable to change.

The Certificate Verification Process

Every apartment owner owns an immovable property ownership certificate which is linked to the apartment and is proof of ownership. If the apartment is used as collateral for a bank loan or given to a pawn shop they will keep the certificate. If the owner has the apartment in his full right he will have the certificate with him. We will check the certificate to make sure it is a real certificate, that the person claiming to be the owner is indeed the owner and that there are no outstanding bills or debts linked to the property. This usually takes one or two days.

The Notarised Sales and Purchased Agreement

Once arrangements have been made and all parties are in agreement, everyone goes to the Notary. The Notary draws up a standard contract, and makes copies of all the passports and certificates. Everyone signs and shakes hands, and big red stamps are applied on every page and signature. Once this is done all parties involved go to Ulaanbaatar Bank in the city centre. It is usual at this stage for the buyer to pay a percentage of the price of the apartment, generally 30 to 50%.

Paying the Property Tax

There is a 2% tax applicable on all property in Mongolia. This tax is payable at the Bank. Depending on negotiations, either the seller or the buyer (or both) go to the bank with the contract and pay the 2% over the counter and get a receipt for it. You will need to show the contract in order to pay the property tax.

Altering the Ownership Certificate

After the property tax is paid comes the chaotic stage. The seller and the buyer, accompanied by the Agent, go to the Immovable Property Registration Office. It is a small building with lots of people fighting to get into it. You need to complete a long and complicated form (there are clerks on hand happy to help for a few hundred tugrig). This form needs to be taken to various counters, stamped, fees paid and moved to the next counter. There is much use of elbows, biting and spitting but eventually you will manage to get your certificate and paperwork in the right pile and 3 to 5 days later you will get it back with your name on it. It is possible to rush it to be done on the same day, but only if you submit the paperwork in the morning. Once the certificate has been changed to your name and you are in possession of it, it is usual to pay the remainder of the price of the apartment.

Paying the Agency Fee

Mongolian Properties charges buyers a 3% fee of the total purchase price for its services. An invoice is issued at the same time as the notarised contract is signed, and you will then have 5 business days to pay the invoice. This can be done by bank transfer, credit card payment or cash.

Moving in

Once the certificate has been received, it is usual to give the person moving out about a week to do so. It is advisable to withhold a small percentage of the price of the apartment until the day you move in. This is because nasty surprises can still happen with the previous owner taking away doors, flooring, electrical fuses and everything that is humanly possible to remove from the apartment. Withholding a small percentage means that you retain some sort of power against this eventuality. If everything is correct in the apartment once you are given the keys, you may pay the remainder of your payment.

Changing the locks

The first thing to be done when you move into a new apartment you have just purchased is to change all the locks on your main entrance. This is because it might just be possible that the previous owner retains a key and might just feel nostalgic for his old apartment on one of those long wintry nights where he has had a little bit too much to drink.

Doing it from Overseas

The process described above requires your presence in Ulaanbaatar to sign and pay the landlord. It is easy to do all of this even if you are not in Ulaanbaatar. The contracts can be signed abroad and formalised by a notary here. In this certified copies of your passport as well as power of attorney in those matters will be required by Mongolian Properties.

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