Bill No. 5091, which is important for the field of urban planning, was adopted today by the Parliament in the second reading. Protecting the rights of buyers of future real estate is the main goal of the document developed with the participation of BRDO team.
These are individuals and legal entities who buy objects of unfinished construction (for example, cottages), residential and non-residential premises in objects that are under construction. From now on, the buyer of the future real estate is much better protected and receives guarantees of protection of his rights in the event of, for example, incomplete construction.
What is changing?
Draft Law No. 5091 creates effective legal mechanisms for the state’s guarantee of property rights to objects of unfinished construction and future real estate objects. In particular:
1. Funds for the purchase of a future real estate object (apartments, parking spaces, etc.) are raised in one of the following ways:
- by concluding a contract of sale of the future real estate object;
- by concluding an agreement on participation in the construction financing fund with the manager of the construction financing fund;
- by issuing targeted corporate bonds, the repayment of which is carried out by transferring the object (part of the object) of residential construction in accordance with the Law of Ukraine “On Capital Markets and Organized Commodity Markets” with the condition of transferring the object (part of the object) of residential construction in accordance to the concluded notarial contract between the customer of the construction and the owner of such bonds on the reservation (reservation) of the object (part of the object) of residential construction.
2. The buyer is protected by laws on the protection of consumer rights (for individuals) and property rights;
3. Special property rights are registered on the object of unfinished construction, the future real estate object, which makes resale impossible;
4. The construction customer/developer can start selling future real estate only after registering special property rights, separately for all apartments or other objects, which also makes it impossible to purchase residential or non-residential premises in the object of illegal construction;
5. The introduction of a guarantee share of the construction — a part of the object that the developer cannot sell before the end of the construction, which is an effective source for covering costs in case of completion by another customer of the construction of the unfinished construction object;
6. The construction customer/developer is obliged to coordinate adjustments in the project documentation with the buyer, if such adjustments affect the interests of the buyer;
7. The law establishes mandatory requirements for disclosure of information about the customer/developer of construction and the future apartment building.
Read more about the problem cases that have previously occurred in the Ukrainian urban planning market, and how the approved draft law can prevent their recurrence in the future, in the interview of the head of the “Construction” sector of BRDO, Taisia Baringolts, in the publication FAKTY (in Ukrainian).