Reducing the potential risks of fraud by real estate developers in the case of housing purchase and protecting residential property investors. Changes in the legislation reflected in the draft Law “On Amendments to Certain Legislative Acts of Ukraine on the Protection of Construction Creditors’ Rights” developed with the participation of BRDO experts are focused on this goal.
Why is this important?
In Ukraine, residential property investors often face serious problems instead of promised apartments they have already paid for: suspended construction projects, the bankruptcy of project developers, lack of construction permits, and in some cases, double sale of real estate. That is, sometimes an apartment is sold to two people at the same time.
According to the official statistics of the Ministry of Regional Development, as of the end of 2019, there were already more than 150 problematic housing projects in Ukraine. This means more than a hundred thousand affected citizens who did not receive their paid housing.
Note that the changes in the legislation will apply only to facilities, for which the right to perform construction activities will arise after the law enters into force. That is why the draft law should be adopted immediately. After all, the document should serve as an effective safeguard against many risks of problematic construction projects for citizens who plan to buy an apartment.
What do the changes in the legislation provide?
The main purpose of the draft law is to protect the rights of construction creditors by creating mechanisms for the transparent attraction of funds of individuals and legal entities in construction, introducing a guaranteed share of real estate construction, and using it to build construction objects in case of construction project owner’s financial insolvency, establishing a special mechanism of the bankruptcy of legal entities acting as construction project owners.
First of all, investors will be able to see for themselves the legality of construction projects by verifying the data in the register of proprietary rights for real estate. If the rights to a construction object are available in the register, it means that the state has verified the availability of permits and ensures that the construction project is legal.
Moreover, a procedure for registration of rights to future real estate objects will be introduced. After all, the current legislation does not provide for the registration of rights to future real estate objects (apartments).
We invite you to view the draft law and the presentation to learn more about other important changes in the legislation on the protection of real property investors’ rights.