Alexander Ruchiev: participation in compensation fund is vital issue for developers

25.07.2016

ruchiev2Developers which do not participate in the compensation fund, would face the collapse, considers Alexander Ruchiev, President of Morton GC.

He also said that the funds of a mutual insurance society (OVS) can be transferred to this compensation fund created by the developers of residential real estate. The mutual insurance society can be disbanded.

Alexander Ruchiev added that there is also the option to reverse OVS into an investment fund, steering the funds on some particular project.

“The fund is formed by mandatory contributions of developers, which attract money of equity holders,” said the Head of Morton GC.

According to him, it may happen that a developer applies to the fund upon receiving a construction permit and filling in a project declaration, but the fund can dismiss this application on the grounds that it does not meet the criteria.

“Technically, it would mean the collapse for a developer. Here we see the weakest point of the already adopted law,” noted Alexander Ruchiev.