In the middle of the year, Kazakhstan adopted amendments to the Law “On Amendments and Supplements to Certain Legislative Acts of the Republic of Kazakhstan on Issues of Shared Participation in Housing Construction, Highways and the Provision of Transport Services to Disabled Persons“.
The new law introduced two key changes to the housing construction sector. First, construction companies are prohibited from raising funds from unit owners without a guarantee from “Kazakhstan Housing Company“ JSC or permission from the local executive body (akimat, ed. note). Second, the purchase of apartments in cash is now prohibited - funds from capital owners can be transferred to construction companies only through banks.
The first change, although insignificant, may still affect housing prices, while at the same time “cleaning“ construction market by unreliable players.
In the short term, a slight increase in prices or a decrease in supply is possible. This is due to the fact that some small companies will not be able to continue operating without cash, and therefore prices are likely to increase slightly. However, in the long term, the market will be freed from small and financially unstable companies. Only reliable and sustainable entrepreneurs will remain. This, in turn, will provide consumers with access to high-quality and legally secure housing, the lawyer noted.
The ban on buying apartments in cash is also aimed at preventing money laundering and limiting the flow of illegal income into the real estate market.
These changes were adopted in order to protect citizens' finances. Previously, it was common for construction companies offering apartments for cash to collect money from buyers in advance, but then not to start construction. Such schemes were especially common among companies without a permit to attract shareholders. In addition, there was a practice of concealing the sources of illegal income. Some individuals who earned money through criminal activity or corruption purchased apartments in order to launder their funds. When paying through a bank, mandatory financial monitoring is carried out and, if necessary, the question “Where did you get these funds?“ can be asked. Therefore, this regulation can also be considered an effective tool in the fight against corruption, Arjan Sadouakas explained.
Purchasing housing with cash often becomes a source of fraud. Therefore, cashless payments through banks not only prevent corruption risks, but also protect citizens from possible fraud by unscrupulous entrepreneurs.
Bakhizhan Zhunisbekov, Chairman of the Commission for Construction and Housing and Communal Services under the Ministry of Industry and Construction of the Republic of Kazakhstan, emphasized that the mandatory receipt of a guarantee from the Kazakhstan Housing Company (KHC) by construction companies significantly strengthens the mechanism for protecting the rights of citizens purchasing housing.
To obtain a guarantee, the entrepreneur, together with an authorized company, submits an application to the Commission for Housing and Communal Services, providing all necessary documents confirming the legal validity of the project, its economic feasibility and the financial solvency of all participants. The Commission for Housing and Communal Services conducts a comprehensive assessment of the project, including a technical, economic, financial and legal assessment, as well as an analysis of potential risks and the financing structure. Before signing the guarantee agreement, the authorized company is obliged to conclude an agreement with the general contractor and sign a tripartite agreement with the Housing and Communal Services Commission and the engineering organization. The latter will carry out technical supervision, monitor the timing and volume of construction and installation works and ensure the targeted use of shareholders' funds, he said at a press conference at the Central Communications Service.
In addition, according to him, after completing all preliminary procedures, the Housing and Communal Services Commission and the authorized company sign a guarantee agreement, which determines the obligations of the parties and the conditions for recognizing a guarantee event.
The guarantee from the Unified Operator allows capital owners to obtain a mortgage for housing under construction without providing additional collateral, as well as to use pension savings through the Otbasi Bank system. Thus, the guarantee mechanism provides reliable legal protection for capital owners, transparency of construction financing and, in case of financial difficulties for the entrepreneur, completion of the project, emphasized Bakhytzhan Zhunisbekov.
At first glance, it may seem that the new legal requirements tighten working conditions for entrepreneurs and limit their activities. However, experts emphasize that all these measures are aimed at legalizing financial flows and ensuring transparency in the housing construction sector. In addition, in order to encourage construction companies to raise funds exclusively legally, the conditions for obtaining a guarantee from the Unified Operator have been eased.
The requirements for the entrepreneur's work experience have been reduced from 3 to 2 years. The volume of completed construction required to obtain a permit has also been reduced: for cities of national importance and the capital - from 18,000 to 10,000 sq m, and for regions - from 9,000 to 5,000 sq m, explained Bahitzhan Zhunisbekov.
The shared construction mechanism has already proven itself as an effective tool for providing housing to the population. However, new challenges facing the industry have necessitated updating the regulatory framework. These challenges include unfair practices by some developers, insufficient existing regulations, and artificial barriers that prevent regional developers from legally entering the shared construction market. All of these factors have led to a revision of the legislation. The new regulations, which came into force on August 31, were developed specifically to address existing problems and create a more transparent, safe and reliable system for shared capital construction in Kazakhstan.
The news was published on the basis of an information exchange agreement between Fakti.bg and Kazinform
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