What is the "Dolina Effect" and Why It Has Become One of the Key Risks in the Real Estate Market in Russia and the CIS. An Analysis of Threats for Investors, Reasons for Judicial Cancellations of Transactions, and Recommendations for Buyer Protection.
The term "Dolina Effect" entered the vernacular following a highly-publicized case involving the famous singer Larisa Dolina. This term refers to a fraudulent scheme whereby a seller of an apartment (usually an elderly individual) cancels the transaction through the courts after it has been completed, claiming that they became a victim of telephone fraud. This scheme allows the "seller" to reclaim the apartment while keeping the funds paid by the buyer. The emergence of the term has been documented in the media and even in encyclopedic sources: for instance, in late 2025, Wikipedia published an article detailing this phenomenon (primarily associated with cases involving elderly sellers).
The Origin of the Term
At the heart of the matter is the case of Larisa Dolina. In the summer of 2024, the singer sold her apartment in Moscow, handing over the received funds to fraudsters (part of which was channeled through "safe accounts"), only to later discover that she had been deceived. In September 2025, the court deemed the transaction invalid due to Dolina's "defect of will" (as she had been misled), returning her the apartment while the buyer was left without both housing and money. This sensational precedent sent shockwaves throughout the country, leading to similar stories emerging everywhere. Sellers and their relatives began to go to court with claims for the return of their property, asserting that they had been misled. In the media and legal communities, this scheme came to be known as the "Dolina Effect," as a singular precedent evolved into a widespread fear in the secondary real estate market.
The Legal Essence of the Problem
The conflict of legal interests here is straightforward: on one side is the need to protect the rights of the "aggrieved" seller (particularly vulnerable elderly individuals) to reclaim their property; on the other is the legitimate buyer's right to retain the acquired housing. Since proving any criminal link between the buyer and the fraudsters is usually impossible, courts often apply norms that protect the seller from misunderstanding or deceit. The main grounds for declaring a transaction invalid are significant misrepresentation of the seller or fraud (Articles 178, 179 of the Civil Code of the Russian Federation).
- Courts frequently declare transactions involving vulnerable sellers invalid under Articles 177-179 of the Civil Code (incapacity, misunderstanding, fraud).
- In practice, after a challenged contract, the buyer often finds themselves without property, and the funds paid are rarely returned — frequently, the money remains "frozen" until the criminal proceedings against the fraudsters are concluded.
- The courts' position generally revolves around protecting the "weaker party" of the transaction: if it is proven that the seller acted "unaware" (due to age, illness, stress, or coercion), the contract is rescinded, irrespective of its formal legality.
Scale and Consequences for the Market
This issue has extended far beyond just one case: in 2025, thousands of transactions across Russia were contested using such schemes. Even if the official transaction figures remain stable, market participants note a rising sense of alarm. Buyers are shying away from deals involving suspiciously low prices or elderly sellers and are demanding additional guarantees. Many secondary transactions now come with extra checks and conditions.
- In major cities, there has been a sharp rise in secured transactions: for example, notaries in St. Petersburg report that by autumn 2025, the number of transactions through notary deposits more than doubled.
- Real estate agents note that transactions involving "senior" apartments have become more complicated: requirements for certificates from psychiatric hospitals, the involvement of relatives of the owner, recording video sessions, and detailed document assessments are now commonplace.
- There is a probable decrease in liquidity for such properties: the market is wary of "volatile" offers, and senior citizens' housing is being traded at a discount or remains on the market for longer periods.
Risks for Buyers and Sellers
- Buyer: loss of ownership rights (the apartment is returned to the original owner), freezing of invested funds and mortgage obligations, prolonged litigation costs, and reputational risks.
- "Seller"-victim: risk of being left without both the apartment and money (especially if funds are transferred to fraudsters), pressure from relatives and law enforcement, the need to provide testimony, and participate in legal disputes.
Government and Professional Community Response
The government has begun to closely monitor the situation. In the State Duma, legislative proposals and protective measures are being discussed: mandatory notarization of real estate transactions, compulsory insurance of apartments under special circumstances, and the introduction of a "cooling-off period" (holding funds in a bank deposit for several days). Agencies are coordinating evaluations of judicial practice. Professional communities are also proposing new standards: for instance, expanding notaries' rights to verify property history and the seller's condition, strengthening banks' compliance measures (banning "safe accounts"), and developing recommendations for realtors when dealing with vulnerable owners.
Practical Recommendations for Buyers
To mitigate the "Dolina Effect" in a specific transaction, buyers should:
- Carefully verify the seller and property: request a recent extract from the Unified State Register of Real Estate (which reveals the chain of owners and encumbrances), study the ownership documents, and check for liens.
- Assess the seller's condition: meet in person, clarify their family and financial situation, and analyze suspicious signs (sharp discounts, urgency, emotional states).
- Conduct transactions under expert supervision: involve an experienced lawyer and notary, arrange payments through a bank escrow or notary deposit, where funds are transferred to the seller only after the transaction is registered.
- Seek guarantees: involve the seller's relatives or guarantors in the transaction, who can confirm the seller's voluntary consent and be ready to return money to the buyer if the deal is canceled.
- Consider title insurance: such a policy can compensate for paid money in the event of a subsequent declaration of the transaction as invalid.
Practical Recommendations for Elderly Owners
To avoid becoming a participant in such a story, elderly property owners should:
- Not trust dubious calls: ignore messages from "authorities" and offers to transfer money to "safe accounts" from strangers.
- Consult before selling: discuss conditions with trusted relatives and a lawyer, avoid hasty transactions under pressure, and not sign documents without understanding their contents.
- Conduct transactions securely: whenever possible, use notarization and asset listings, and avoid granting extensive powers of attorney without necessity.
- Utilize protective mechanisms: in agreement with family members, issue limited powers of attorney, guardianship, or restrictions on registered transactions without personal participation. Also, consider preparing a will or marital contract to determine the fate of the property in advance.
Possible Future Scenarios
If the current practice continues, the number of legal disputes and distrust will only grow: transactions will become more expensive and prolonged, and the segment involving elderly sellers may slow down. At the same time, authorities and businesses are searching for a balance of interests. Among the discussed measures are expanding the practice of mandatory title insurance, introducing a "cooling-off period" (for example, a week during which funds are held in the bank), creating centralized risk registries, and mandatory assessments of the mental and financial states of transaction owners.
Conclusion
The "Dolina Effect" is not just a singular case of notoriety, but a symptom of systemic vulnerability in the real estate market to fraud and legal uncertainty. Investors must remember that real estate transactions require meticulous preparation and professional support, especially when the seller is vulnerable. Only a comprehensive approach — thorough property verification, notarial support, careful arrangement of payments, and risk insurance — can prevent costly losses. Without such measures, the "Dolina Effect" can affect virtually any home buyer.
