Defrost it faster!
Developers will be able to receive money from escrow accounts earlier
The Ministry of Construction of Russia advocates a faster admission of developers to funds on escrow accounts – immediately after receiving permission to put the facility into operation (RVE), without waiting for the registration of the first title to the project. The corresponding proposal of the department is contained in the list of recommended measures to improve legislation.
The issue of the need for a phased “unfreezing” of special accounts has been discussed since the summer of last year – since the transition of the housing market to project financing. However, with the onset of the coronavirus pandemic, discussions on this issue have intensified. The point of view of the Russian Ministry of Construction last week was formulated by the head of the department, Vladimir Yakushev. “Our joint position with the Central Bank of the Russian Federation is as follows. At the moment, the system and banks are not ready for such a difficult issue (stage-by-stage disclosure of escrow accounts – “SG”), because it requires strict administration, the minister said. – The topic has been postponed to the medium term, but the amendments, which are now being prepared in 214-FZ, offer the following solution: the developer can transfer funds and disclose escrow accounts not after registration of ownership, but immediately after the facility is put into operation. We believe that at this stage there are no longer any risks, and the developer will receive his money invested in the implementation of a particular project at least three months earlier, return the project financing, and accordingly, stop paying interest for it. ”
Stroygazeta asked market participants to comment on the authorities’ initiative. Thus, Dmitry Kotrovsky, the public ombudsman for the protection of the rights of construction entrepreneurs, the head of the branch committee “Opora Rossii”, stressed that this was a compromise reached by the Central Bank, banks, developers and the relevant ministry. “The position of the business community boiled down to the fact that in the registration process the developer is only a participant, and not the person in charge,” Kotrovsky said, “and the document confirming the commissioning of the facility records compliance with all the requirements for the facility specified in the project declaration.”
In turn, the commercial director of the Rodina group, Ksenia Yurieva, believes that disclosure of escrow accounts before the registration of the first ownership right will not be a significant help for bona fide developers. “The bulk of work and financial costs (by this time) are already behind us, however, if this initiative is implemented, the business will be able to quickly pay off the debt to the bank,” she explains.
According to Igor Kozeltsev, General Director of the Razvitie company, by the time the RVE was issued, the developer had already fulfilled almost all obligations to equity holders and, in fact, had “worked out” the amounts stored in escrow accounts.
As for the interests of home buyers, the proposed innovation, in the opinion of Andrey Kolochinsky, managing partner of VectorStroyFinance, does not in any way infringe upon them and, in general, does not contradict the essence of the shared construction reform. “Under the current regulation, all risks of the implementation of development projects are borne by credit institutions, and only partial disclosure of escrow accounts at earlier stages of construction can reduce control over the spending of funds and make buyers worry,” the developer emphasizes.
“The essence of the transition to escrow accounts is to protect the shareholder at all stages of participation in construction,” recalls Ksenia Yurieva. – And the last stage of this process – the period between the receipt of the RVE and the registration of property rights – is no exception. But, of course, most often, the developer has problems with adherence to the schedule at the previous stages: during the construction of a house, connection to utility networks. ”
“Now the disclosure of escrow is tied, among other things, to the registration of the first ownership right by an individual,” adds Nadezhda Korkka, Managing Director of Metrium (member of the CBRE partner network). – After the building is commissioned, the keys are handed over to equity holders. At the same time, buyers evaluate the quality of the product received, and if it does not suit them (for example, double-glazed windows are poorly installed in the apartment, pipes are leaking, etc.), then the client has the right not to sign the acceptance certificate of housing, and the developer is obliged to eliminate the identified deficiencies. Accordingly, until this is done, hypothetically, the developer may not receive funds from escrow accounts if all other buyers find the same flaws. ”
Last year, using escrow accounts in Russia, 262 houses with an area of 1.7 million square meters were commissioned. m. According to the EHIS data, as of June 17, 2,437 projects (33.8 million square meters of housing) are being implemented in the country under the new scheme. The leader in opening special accounts is now Sberbank, which accounts for 19.36 million square meters of current construction in a new way.
Source: Storitelnaya gazeta №25 26.06.2020