Insurance for property developers will no longer be mandatory
Insurance for developers of residential properties will no longer be mandatory. The law will lose its force in the autumn, said the Head of the Ministry of Construction of Russia Mikhail Men.
“Companies engaged in insurance activities, and the mutual insurance companies will continue to fulfill the undertaken obligations. However, their fate will be decided,” said the Head of the Ministry of Construction.
Since July 3 of this year, certain innovations in the federal law came into force, they concern participation in shared construction of multifamily residential buildings and other items of real estate. It is planned to establish a special fund, which will be replenished with mandatory deposits of developers which use citizens’ money for construction of multifamily residential buildings.
In addition, the amount of mandatory deposits to the fund is clearly defined. Deposits amount to no more than 1% of the cost estimated for construction of a multifamily residential building or another object that is fixed in the project documentation.
According to Mikhail Men, these payments will not duplicate the mandatory insurance contributions.
The minister also stressed that the Federal Law will come into force on January 1, 2017.