Amount of developer’s authorized capital to depend on gross building area
Authorized capital of a developer will depend on the gross area of constructed objects, said Konstantin Timofeev, Chairman of Moskomstroynvest (Moscow Committee for Realization of Construction Investment Projects and Co-Investment Agreements) at the VIII Seminar “Dialogue with investor.”
According to him, this rule may be introduced in July, 2017. For the moment, only a small number of real estate developers in Moscow fulfill the necessary requirements for availability of funds, reported in Moskomstroyinvest.
“Nowadays, many companies have authorized capital of 10 thousand rubles. It is clear that these developers will not be able to attract public funds for construction of new houses,” said Konstantin Timofeev.
However, they still have the opportunity to bring their financial performance into compliance with the current rules. Amendments to the Federal law on participation in the shared-equity construction (214-FZ), which in particular regulate requirements for financial stability, will enter into force since 1 July, 2017.
“Currently, amendments to the law on shared-equity construction are under consideration in the State Duma. According to them, authorized capital of developers will be calculated in dependence to the gross area under construction,” said the Chairman of Moskomstroyinvest.
Konstantin Timofeev noted that in any case this measure should not be regarded as a limitation of competition. “We want to weed out unfair developers in the construction market of Moscow, that will encourage the development of this sector,” he concluded.