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Draft law on protection of investors' rights will stimulate development of mortgage lending – expert
KYIV. Sept 28 (Interfax-Ukraine) – The bill on guaranteeing rights to real estate objects to be built in the future (No. 5091), adopted by the parliament at first reading, will stimulate the development of mortgage lending in Ukraine, the head of the legal department at Intergal-Bud, Vitaliy Saliy, has told Interfax-Ukraine.
"Registration of real rights to apartments during construction, which is provided for by the bill, opens up the possibility of using them as collateral, which means that the volume of mortgage loans will increase," he said.
The expert recalled that bill No. 5091 is aimed at protecting the rights of the consumer, who turns from an investor of a construction site into a guaranteed buyer.
"This is undoubtedly a positive innovation. It will reduce the risks when buying primary real estate and provide state protection of the buyer’s rights in the event of unfinished construction or changes in the project documentation of the object that have not been agreed with him," Saliy said.
He noted another innovation that will increase the protection of the investor – the introduction of a guarantee fund of square meters for the completion of construction.
"Such a fund will be part of the object that the developer will not be able to sell until the construction is completed," Saliy said.
At the same time, in his opinion, the changes in the rules of the game in the construction market, spelled out in the bill, may have certain negative consequences for buyers.
"First of all, we are talking about the potential rise in the cost of apartments. As developers will be forced to include the cost of state registration in the price per square meter, which will lead to higher prices in the market. And the improvement of conditions for mortgage lending will lead to an increase in the number of such transactions, which, of course, will also entail an increase in the value of real estate," Saliy said.
