Transparent primary real estate market: The government approved Resolution No. 596

On June 13, the Cabinet of Ministers of Ukraine approved resolution No. 596 “Some issues of compliance with the requirements of the Law of Ukraine “On guaranteeing property rights to real estate objects that will be built in the future.” The BRDO team participated in the development of the document.

Thanks to this resolution, the effect of the Law “On guaranteeing property rights to real estate objects that will be built in the future” will be extended, at the request of the construction customer, to those objects that began to be built even before this law came into force.

The Resolution approves the Procedure for the application of the Law, and the Procedure, in turn, states the following:

  • the conditions and procedure for the construction customer to make a decision on the extension of the Law to construction objects (their constituent parts), the right to perform construction works in respect of which was acquired before the Law came into force;
  • the procedure for updating information (data) in the Unified State Electronic System in the field of construction is determined;
  • passing the procedure for verifying information about construction financing funds, real estate transaction funds, joint investment institutions, legal entities that raised funds through the alienation of property rights, issuers of targeted corporate bonds, the fulfillment of obligations under which is carried out by transferring the object (parts of object) of housing construction, through which funds were raised from individuals and legal entities, as well as about persons and the transactions concluded with them, which provide for the right to obtain ownership of the construction object or its constituent parts after putting into operation the completed construction object object;
  • provision of bank guarantees in favor of persons who, in accordance with the transactions concluded after the entry into force of this Procedure, acquire the right to receive the construction object or its component parts into ownership after the completion of the construction object is put into operation, regarding the absence of third-party rights to such objects objects or rights of legal entities that raised funds by alienating property rights;
  • determination by the customer of the construction of the list of future real estate objects that will make up the guarantee share (except in cases where the attraction of funds for financing (investing) the construction of the object is carried out through construction financing funds).

The Law “On Guaranteeing Property Rights to Real Estate Objects to be Built in the Future”, which was also developed with the participation of BRDO, creates effective legal mechanisms for the state to guarantee property rights to indivisible objects of unfinished construction and future real estate objects. Accordingly, individuals and legal entities who buy objects of unfinished construction (for example, cottages), residential and non-residential premises in objects under construction are better protected and receive guarantees of protection of their rights in case of, for example, incomplete construction. Read more about this law and the changes it introduces.

Thus, the primary real estate market will become more transparent, developers will be more responsible, and buyers will be more protected from the actions of fraudsters in the construction industry.