21 February 2008, 16:39
This Decision followed a deliberation on Bills on amendments to the Law, ‘On Finance and Credit Mechanisms and Property Administration in Housing Construction and Property Transactions´ (appertaining to protection of investors (Reg. No.1045); on amendments to several Laws of Ukraine (appertaining to protection of citizens investing in housing construction) (Reg. No. 1045-1); and on amendments to several legislative acts of Ukraine appertaining to improving the financing mechanisms of construction (Reg. No. 1418).
The Bill No.1045 creates additional judicial guarantees for investors against the loss of monies invested in housing construction, in the event of an early termination of contracts due to delays in the commissioning of facilities. A new provision is added entitling the investor/principal to terminate early the housing construction, where the builder fails to construct the facility in due time, or where the manager effects inappropriate control of the quality and progress of construction. In the event of an early termination of the contract by the investor due to a failure of the builder or manager their contractual obligations, the market cost of a similar housing shall be covered.
The alterations proposed in the Bill No.1045, aim to enhance the protection of persons investing in housing construction. It specifies in greater detail, the operational system of a construction financing fund and a property transaction fund, text of the contract entered into re the construction financing fund, and the monitoring procedure for the execution of contractual obligations and contract termination.. It establishes the authorized minimum capital the financial institutions should have in place, if they intend to attract monies from the public, etc.
The legislative document No. 1418 seeks to create a unified approach to regulating jural relations in housing, connected with ensuring the execution of obligations. It envisages an extension in the application of financial tools, such as Certificates of Property Transaction Funds (PTF Certificates), and clarifies provisions related to their further use in the system of finance and credit mechanisms.
The Bill also defines a procedure to assign one apartment only per investor, 'to exclude fraudulent actions on the part of unscrupulous managers (sale of one and the same apartment to several investors)´. It also provides for the mechanism of a more proactive involvement of banks, builders and lessor businesses in tackling the problem of providing housing for masses.
During deliberations on these Bills, the Committee Chairman, Mykola Azarov, pointed out the constructive provisions regulating the related sectors, and noted their urgency and topicality.
Committee members upheld a proposal to set up a Task Force to deal with improvements in the legislative mechanisms underpinning the financing of construction. The positive provisions of these Bills will be put together and a new cohesive document drafted on this basis.
Invited to the Force Task will be People´s Deputies, the Sponsors of the Bills at issue, members of the relevant State Authorities and experts in the area of construction investment.