Uzbekistan Considers New Shared-Equity Housing Rules
Uzbekistan's parliament reviewed a bill establishing new rules for shared-equity construction and mandatory escrow accounts to protect homebuyers.
Uzbekistan is contemplating new regulations for shared-equity housing, with a draft law recently reviewed in its initial reading by the Legislative Chamber of the Oliy Majlis. This proposed legislation aims to introduce fresh guidelines for collecting funds from citizens and to implement safeguards for the investments of equity participants in the construction of apartment buildings and other real estate ventures.
During the meeting, it was highlighted that housing construction in the country has expanded considerably in recent years. However, some projects have experienced delays, and the realm of shared-equity construction has lacked specific legal oversight. This regulatory gap has led to difficulties for citizens purchasing homes.
The draft law delineates the rights and responsibilities of those involved in shared-equity construction, outlines the powers of state bodies, and defines their interaction protocols. It includes specific clauses governing the collection of funds from both individuals and legal entities for the development of apartment buildings and other real estate.
A significant feature of the bill is the introduction of an escrow account system. Under this system, citizens' contributions will not be directly accessible to the developer but will instead be held in a dedicated bank account. These funds will only be released to the developer once construction is completed according to specified standards and the property has been officially commissioned.
Developers will only be permitted to solicit funds from the public if they meet statutory criteria, register within the Unified Information System, enter into a master agreement with an authorized bank, and issue a project declaration.
The bill also mandates that shared-equity participation agreements undergo notarization and state registration. Proponents of this measure believe it will prevent issues such as the multiple resale of the same property, the execution of illicit contracts, and other irregularities.
Should a developer collect funds from citizens in contravention of the established requirements, the equity investor will have the right to demand a refund along with interest for the use of their funds. If this demand is not met within the stipulated timeframe, the citizen can initiate legal proceedings.
Furthermore, the draft law incorporates mechanisms to ensure the timely completion of construction projects. These may include provisions for replacing an authorized bank or developer if necessary, and the application of financial tools to guarantee continuous project funding.
Information pertinent to shared-equity construction will be made public through the Unified Information System, allowing citizens to access details about the developer, the property under construction, and the project's progress.
The bill additionally proposes establishing accountability for breaches of legislation governing shared-equity construction of apartment buildings and other real estate projects.
During the deliberations, deputies raised questions concerning specific aspects of the draft law and put forth suggestions for its further refinement. Following the discussion, the document successfully passed its first reading.