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“Private housing construction escrow accounts may appear in Russia”
Dmitry Nekrestyanov Partner, Head of Real Estate and Investments Practice at Kachkin & Partners comments on the private housing construction escrow accounts material.
The government has already approved the corresponding bill, as “Izvestia” writes. If the new law is adopted, contractors hired by citizens using houses kits or according to special standard designs will build private facilities. In theory, this should significantly speed up the process, as well as reduce the cost of construction by 10, and in some cases by 20%.
Dmitry Nekrestyanov’s Partner, Head of Real Estate and Investments Practice at Kachkin & Partners opinion
If this mechanism is extended specifically to mass development projects and in fact creates some kind of alternative to the “low-rise”, I don’t see any problems then. This is an opportunity for current developers to simply diversify their business a little. But I’m not sure it will work. If this is not mandatory for all cases, the majority of individual housing constructions are not built this way.
Despite the fact that the document is still under discussion, some large banks have already begun to use the escrow account mechanism to finance individual housing projects. For now, however, they are very cautious, lending only experienced and large players.
Maxim Tikhonov
The material is published on «Business FM» website 25.10.2023
PhD in Law
Partner
Head of Real Estate and Investments Practice
Attorney
PhD in Law
Partner
Head of Real Estate and Investments Practice
Attorney