Uzbekistan Introduces Draft Law for Mandatory Escrow System

Tashkent, Uzbekistan (UzDaily.com) — Uzbekistan has prepared a draft law to implement an escrow system for housing sales. Minister of Construction and Housing-Communal Services, Sherzod Hidayatov, announced this on March 5 during a press conference in Tashkent.

The document has been submitted to the government and subsequently to parliament, where it is currently under discussion in the Oliy Majlis.

At present, the escrow system operates on a voluntary basis. Buyers and developers may use the mechanism at their discretion, but once the law is adopted, it will become mandatory nationwide. Private banks and entrepreneurs have already expressed interest in testing the new model.

Under the escrow mechanism, the buyer transfers funds to a special bank account rather than directly to the developer. The money is released to the seller only after construction is completed and all necessary documentation is finalized, ensuring greater safety for real estate transactions.

Sherzod Kudbiyev, Chairman of the Committee on Urbanization, emphasized that the law should establish clear rules for real estate deals. Key issues include the maximum funds that can be collected from buyers, liability in case of construction delays, and measures in case a developer goes bankrupt.

The draft law is being carefully prepared in cooperation with the Ministry of Justice to ensure effectiveness. Authorities aim to pass the law by July 1. If submitted to the Legislative Chamber in March–April, it will mark an important step in the reform of the construction sector.

The introduction of the escrow system was originally planned by presidential decree to start on 1 July 2025. The initiative aims to enhance market transparency and protect citizens’ rights. The model was developed with the participation of a Russian company and is designed to reduce risks of fraud by unscrupulous developers.