Uzbekistan Considers New Shared-Equity Housing Rules

Tashkent, Uzbekistan (UzDaily.uz) — The Legislative Chamber of the Oliy Majlis of Uzbekistan considered in its first reading a draft law on the construction of apartment buildings and other real estate projects based on shared-equity participation. The document establishes new rules for raising funds from citizens and introduces mechanisms to protect equity investors' investments.

As noted during the meeting, the scale of housing construction in the country has grown significantly in recent years. At the same time, certain projects are not commissioned on schedule, and relations in shared-equity construction have not been regulated by a separate law. Consequently, citizens face problems when purchasing housing.

The draft law establishes the rights and obligations of shared-equity construction participants, the powers of state bodies, and the procedures for their interaction. Specific provisions regulate the collection of funds from individuals and legal entities for the construction of apartment buildings and other real estate objects.

One of the key provisions is the introduction of an escrow account mechanism. Citizens' funds will not be at the direct disposal of the developer, but will instead be held in a special bank account. They can only be transferred to the developer after construction is completed in accordance with established requirements and the facility is commissioned.

A developer will be able to raise funds from the public only if it complies with statutory requirements, registers in the Unified Information System, concludes a master agreement with an authorized bank, and publishes a project declaration.

The bill proposes making notarization and state registration mandatory for shared-equity participation agreements. According to the authors, this will prevent the resale of the same property, the execution of illegal contracts, and other violations.

If a developer raises funds from citizens in violation of established requirements, the equity investor will be able to demand a refund and interest payment for the use of the funds. If this demand is not fulfilled within the set timeframe, the citizen can file a lawsuit.

The draft law also provides mechanisms to ensure the timely completion of construction projects. In particular, provision may be made for replacing an authorized bank or developer if necessary, as well as applying financial mechanisms to ensure continuous project funding.

Information regarding shared-equity construction will be published in the Unified Information System. Citizens will be able to obtain information about the developer, the property under construction, and the progress of project implementation.

In addition, the bill proposes establishing liability for violations of legislation governing the construction of apartment buildings and other real estate projects through shared equity.

During discussions, deputies raised questions regarding specific provisions of the draft law and submitted proposals for its further refinement. Following the debate, the document was passed in its first reading.