The Better Regulation Delivery Office (BRDO) together with the Ministry of Justice develop a mechanism to protect the investors’ rights for real estate property that will be built in the future. The Office experts discussed the proposals on improving the legislation in this area with the head of the department of regulatory support for state registration Anatoly Leshchenko during the working meeting today.
According to the expert of the BRDO construction sector Taisiya Barynholts, today individuals and legal entities investing in construction-in-progress property are not protected as concluded agreements are without mandatory notarization and state registration.
“One of the risks of investing in a housing project is the possibility of its double resale by unscrupulous real estate developers. At the same time, none of the existing in Ukraine ways to invest in construction of residential facilities can fully protect investors from these risks,” Taisiya Barynholts said.
This problem can be resolved by registering the ownership of real property facilities that will be built in the future. Therefore, the BRDO and the Ministry of Justice are working to develop the relevant draft law in order to provide this mechanism with a real effect.
The Office experts and Mr. Leshchenko discussed the main provisions of the draft law during the meeting.
In particular, the BRDO head Oleksiy Honcharuk offered to secure a legal right of contract parties to regulate purchase-and-sale relations as for real property that will be built on the basis of a model contract.
The mechanism of registration was also agreed at the meeting. According to it, first the ownership of each facility that will be built (for example, an apartment) will be registered to a real estate developer. Then the developer obtains the right to sell the construction-in-progress property. The ownership titles for a sold facility will be reregistered to investors and when it is commissioned, these rights will be automatically attached to their owners.
The Office experts also drew attention to the advantages of adding the real estate developer’s duty to create a website on a residential facility that will be built in the future to the draft law. This web resource should contain the information on a construction project, approved construction project documentation, information on housing that has been already sold and still available for purchase as well as an investors’ forum.