Developers may be required to spend money real estate investors for the construction of their homes

MOSCOW, November 16. The Ministry of construction of Russia in the amendments to the law on real estate investors is proposing to limit the ability of developers use investors funds and spend them only on building houses, which include a facilities sharing agreement. About it reported in a press-Department service.

“Cash equity investors may be used by the developer only for reimbursement of costs for the construction of an apartment building, which consists of objects of share building under the contract, or apartment buildings, which include the objects of shared construction. Provided that the construction of the specified objects of real estate is within the boundaries of the element of the planning structure outlined in the approved documentation for planning the territory”, – the document says.

Under the bill, the developer will be required to keep records of shareholders separately for each construction site.

The new rule, the Ministry of construction proposed to apply from 1 January 2017.

However, the Ministry of construction has proposed to set the size of the authorized capital of the developer, raising funds from shareholders, in the amount of at least 5% of the value of all residential buildings under construction in its portfolio.

“The size of the developer’s equity with the right to attract funds of citizens, shall not be less than 5% from the value calculated as product of living area of all apartment houses built by the Builder for co-funded, on the average price of one square meter in the primary housing market in the region, where the construction”, – stated in the text of the amendments in the law on real estate investors.

As previously reported, the draft law on amendments to the law on joint construction submitted to the government, but will be adjusted. To develop proposals on amendments to the law on share building has been created a special working group under the leadership of the Deputy Minister of construction and housing and communal services Natalia Antipin, which included representatives of developers, banks, NGOs, the state Duma.

In July 2015, first Vice Premier of Russia Igor Shuvalov has instructed the Ministry of construction to develop a proposal on amendments to the law on real estate investors. The main purpose of the changes is to strengthen control over the spending of citizens.