Resolving the problems with unfinished construction projects should be a matter of the intensive dialog between the government, investors and real estate developers in the near future. This thesis became a key point on the basis of results of the round table “Unfinished and illegal construction projects: how to resolve a no-win situation?” organized by the Association of real estate investors on May 30, 2016 in Kyiv. The Construction sector head Olena Shulyak represented the Better Regulation Delivery Office (BRDO) at the event.
The whole complex of problems starting from causes leading to unfinished construction projects to possible options to complete the construction was discussed during the debate.
In the opinion of round table participants, this issue remains extremely important for Ukraine for many years. According to the State Statistics Service of Ukraine, there are 14 915 constructions in progress throughout the country as of the beginning of 2015. There are 3823 residential construction projects with a total area of 16 285 thousand sq. m. (excluding the Autonomous Republic of Crimea and some districts of Donetsk and Luhansk regions) among them. For example, there are 357 residential facilities under construction in Kyiv. According to the Ukrainian Union of Investors, 63 construction projects of them are problematic.
In her speech, Olena Shulyak noted that resolving the problems with unfinished construction projects and illegal construction was inextricably linked to investor rights. “Provided that the average size of an apartment in Ukraine is about 40-60 square meters, it can be said that at least 270 thousand families are a risk group that can be included to the list of defrauded investors. This fact turns the economic problem with unfinished construction projects into the social one,” she said.
The BRDO expert informed the participants that Better Regulation Delivery Office experts are working on a comprehensive solution to this issue. For example, they worked out a number of amendments to the regulatory legislation – from issues of land acquisition for construction to protection of end investors’ rights.
“Today, it is necessary to focus our special attention on the issue of registering property rights on facilities to be built in the future. This will help partially resolve the issue to protect investors’ rights on unfinished residential construction projects,” Olena Shulyak said.
The Better Regulation Delivery Office (BRDO) has already drafted a law that provides for a clear mechanism to protect rights of owners of property that will be built in the future from the double resale and illegal change of its specifications.
Discussion participants supported the BRDO experts’ initiatives and expressed their confidence that issues proposed to solve by making legislative amendments to the regulations on the construction industry were of the utmost relevance. In her turn, Olena Shulyak invited all members of the public, government representatives and construction industry entrepreneurs to participate in the discussion of laws drafted by the BRDO.
The draft Law of Ukraine “On amendments to certain legislative acts to protect ownership rights of immovable property to be built in the future” will be published on the BRDO website.
Nevertheless, now the Better Regulation Delivery Office encourages business representatives and the public to get involved in reforming the regulatory legislation and send their proposals to [email protected]. All proposals and comments coming to the BRDO email will be considered when drafting the regulations.