Unfinished residential buildings are pretty common in Ukrainian realities. This means at least 200,000 families who have invested in construction but have not received any housing.
Why so? Because the legislative regulation of relations in this area has a number of gaps while being ineffective. Hence, it results in the lack of an effective system of guaranteeing the fulfillment of obligations to investors, the possibility of illegal construction, misuse of investor funds, improper control over activities of developers performed by supervisory and law-enforcement authorities and so on.
As a result, the rights of housing construction investors are virtually unprotected against the actions of unscrupulous real estate developers. Often, investors are neither able to obtain ownership of real estate units nor to repay the funds involved in such a construction project.
To address the problems of affected investors, parliamentary hearings with the participation of BRDO Head Oleksii Dorohan were held today. A few years ago, a law #7084 aimed at protecting investments in construction projects and preventing problematic real estate developments was drafted with the involvement of the BRDO Office.
In particular, it provides for:
• establishing an exclusive list of ways to attract funds from individuals and legal entities for residential real estate construction;
• introducing a mechanism of state registration of the ownership of objects under construction;
• uselessness of a contract of construction object purchase, if the ownership of this object is not registered in the State Register of Real Property Rights;
• regulating a procedure for conclusion, execution and termination of sale and purchase contracts for objects under construction;
• the need to agree significant changes to construction projects that directly affect investors’ rights and interests (change in the number of floors, total area, plan, etc.) with investors;
• transparency of information on construction and financing of projects (in particular, documents related to the construction, its status, planned date of commissioning, etc.).
We hope that the document will be finalized and submitted to the Parliament in the near future.