UIT Uralstroy violates participatory lending construction law

November 26, 2013. Sverdlovsk Region division of State Construction Surveillance Service conducted an on-site inspection of the developer UIT Uralstroy and detected violations of the federal legislation on the participatory lending construction of apartment buildings and other estate types, the division’s press service reports.

At the time of the inspection, UIT Uralstroy is putting up two apartment buildings with non-residential space on the first and second floors and a half-built-in parking lot and a transformer substation in the place of another, half-finished building that is to be demolished, at 118 Amundsen St in Yekaterinburg; the developer is also working on an apartment building in Mashinostroiteley St in Verkhnyaya Pyshma and two apartment buildings, an underground parking lot, and a transformer substation at 42 Ilyicha St in Yekaterinburg.

An inspection of the participatory lending construction contracts that the company signed with the future owners revealed that no definite date was stated for the transfer of building to the owners, which is a grave violation of the legal requirements. It was also determined that the parties agree on any change that is more than 7% in the total area as a substantial change in the project design documentation, which is also against the current legal regulations.

The future owners’ rights were also infringed in that the developer put it in the contract that in case the actual area of an apartment is different from that stated in the contract, the financial adjustments will only be made for the difference of 1 sq m or more. This condition actually limits the owner’s right to a corresponding decrease in the price of an apartment and allows the developer to change the price in their own discretion.

Besides, some of the contracts actually contain an extended list of force-majeure circumstances that is unreasonably long.

The developer was ordered to eliminate the existing legal violations by March 20, 2014.


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