Baiterek sets up housing construction guarantee mechanism
Under the new Kazakhstan’s Law on the equity participation in housing construction, the Fund will provide guarantees of the completion of construction of residential houses to real estate investors. The purpose of the Fund is to ensure the stability and effectiveness of the system of guaranteeing equity in housing construction, protection of the rights and legitimate interests of shared-equity construction participants upon the occurrence of warranty case, as well as stimulation of the shared-equity housing construction market.
A warranty case is a violation of terms of commissioning of apartment houses; an inappropriate use of funds; a failure of the developer on the basis of the court decision.
After receiving an application the Housing Construction Guarantee Fund will first of all check the developer for compliance with the new law. In the case of compliance with all the requirements, the Fund will conclude a contract on granting of a guarantee with the developer and the authorized company. Subsequently, the Fund will monitor the targeted use of the shared-equity construction participants’ funds through an independent engineering company, which, in turn, will also monitor the quality of new housing.
In general, the implementation of the mechanism of housing construction guarantee will ensure the investment attractiveness of the construction industry both for shared-equity constriction participants and for investors. The transparency of the construction industry will improve, and the developers’ responsibility will increase.