Rosreyestr: Number of participatory share lending contracts rises 46% in 2013

10 February 2014 (09:30)

February 10, 2014. The number of participatory share lending contracts for the construction of apartment buildings in Sverdlovsk Region rose by 45.9% in 2013 compared with a year earlier, Deputy Head of Sverdlovsk Region division of Rosreyestr Larissa Gashkova said.

‘The increase in the number of such contracts mainly has to do with the fact that there are very few ‘frozen’ construction sites in Yekaterinburg. Besides, the government adopted a number of measures last year to make these deals even more secure. Starting from January 1, 2014, the developer must provide evidence of third-party insurance upon the signature of a contract. In case housing cannot be provided for the lender, the latter can get a compensation of up to 10m RUR,’ she explained.

She pointed out, however, that not a single developer has yet applied to Rosreyestr to register a participatory share lending contract since the new legislation came into effect on January 1, 2014.

‘We believe that registration applications will be submitted again soon. The developers might set up a mutual trust or resort to bank guarantees, which is also perfectly legal,’ she added.

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