Less conditions for investors: how to get rid of unfinished projects

  • 28/02/2017

Deputies proposed the Verkhovna Rada to approve a mechanism that will help get rid of protracted. Today in Ukraine there are about 10,000 unfinished construction projects, every tenth of which is located in the capital. Some of the most attractive objects are bought by large construction companies, but most of the buildings remain ownerless and not only spoil the appearance of the city, but also create a danger to its inhabitants.

To solve this problem, the bill No. 6033 is called, which specifies the mechanism for completing the construction of unfinished residential facilities. The document proposes to establish a small fee when applying to the court on issues relating to unfinished construction. Unfinished, according to the bill, does not fall into the liquidation mass in case of bankruptcy of the developer. A construction company, which will undertake the completion of work on the site, will be exempt from the payment of share contributions. Construction investors will be able to create housing cooperatives.

But there were a lot of other innovations in the bill that could bury a good idea. One of the clearest examples is the legislative definition of protracted construction. According to the developers of the document, it is an unfinished residential construction object that was built legally. In other words, the construction company received all permits, and more than ten people should buy apartments in such a house. What, then, should be done by investors who have invested in illegal construction projects? There are quite a few such examples throughout the country.

There are a lot of other problems. For example, what to do if there is no documentation confirming construction costs? The developers also did not specify what is meant by the document giving the right to build. Is it a declaration, or permission, or something else? Thus, the document is incomplete until the end, as there are opportunities for manipulation.

But even if the developer built the house legally, and there are all the necessary documents for construction, an agreement with the buyers of apartments can complicate the process of completion of the object under construction. The list of contracts that, in the opinion of the authors of the draft law, confirm the transfer of property rights, does not cover all existing cases, for example, investors who acquired derivatives or concluded investment contracts, although they are prohibited by law.

Also among the innovations of the draft law is the creation of a new regulatory body - a special temporary commission for the completion of buildings. Moreover, the authors of the bill propose to head such a body to the chairman of the respective village or city council. Such a decision may not simplify, but significantly complicate all the procedures associated with the completion. Practice shows that the creation of such a body will only increase the bureaucratic burden on the whole process of concluding an agreement with an investor.

As a rule, the main problem for the developer is to resolve problems with the land user, as well as the intended purpose of the land plot. In the bill about this is not a word. But among the long-term construction projects there are a lot of objects built with disregard of the intended purpose of the land or in general without the right to use land for the objects. Will these buildings remain protracted? It is not excluded that if all these norms are adopted, it will not be possible to significantly reduce the number of unfinished projects, since only a few objects meet all the requirements of this draft law.

Yevgeny Yermolenko, Head of the Legal Department of Intergal-Bud company

Source: biz.liga.net/all/nedvizhimost/opinion/3614123-vtoroe-dykhanie-kak-izbavitsya-ot-dolgostroev.htm