The key facts

  • Payment for housing will go through a free escrow account at a bank opened in the buyer's name
  • The developer will receive the money only after handing over the building and signing the acceptance act
  • Payment in cash or in kind will be prohibited

Briefing on the draft law on shared-equity construction

The Committee for Urbanization and Sustainable Housing Market Development held a briefing on the draft law 'On the Construction of Multi-Apartment Buildings and Other Real Estate Objects Based on Shared Participation', UzA reports. The focus of the discussion was the escrow account mechanism, designed to protect citizens buying homes in buildings under construction.

How the mechanism will work

According to committee specialists, money paid for an apartment will go into an escrow account opened at a bank in the buyer's name. The developer will be able to receive the funds only after handing over the building and signing the acceptance act. The account is opened and maintained free of charge, and payment in cash or in kind will be prohibited.

Protection of funds even if the developer goes bankrupt

It was separately emphasized that if the developer goes bankrupt, the money in the escrow account can neither be written off nor seized. In addition, such accounts will be included in the deposit guarantee system, giving the buyer an extra level of protection. This means that under shared-equity participation, the risk of losing money due to an unfinished building is significantly reduced — the funds effectively remain under the bank's control until the developer actually fulfills its obligations.