Baiterek plans to insure more than 50 percent of housing built with equity holders participation
JSC NMH Baiterek. October 13. Official presentation of Baiterek Holding’s subsidiary, JSC Housing Construction Guarantee Fund, which was set up on the basis of Kazakhstan Mortgage Guarantee Fund, has been held today in Astana.
On April 7, 2016, the Head of State signed the Law On the equity participation in housing construction. Today, on the 13th of October, the Law has entered into force. It provides for the stability and efficiency of the system of guaranteeing shared-equity participation in housing construction, as well as protecting the rights and interests of the participants upon the occurrence of warranty case.
The Fund began to receive applications for guarantees, and in accordance with its statutory objectives, will provide a guarantee of real estate investors upon completion of the construction of a residential building in the case when developer fails to perform obligations.
I think it important to note that we have set the goal to achieve maximum effect in our work. Our main goal is to increase the affordability of housing to all levels of population and increase housing stock. We have set a really ambitious, huge challenge to cover more than 50% of housing being built on the money of home investors with the guarantee of the Fund, Dauren Onayev, Chairman of the Board of the Housing Construction Guarantee Fund said.
A warranty case is a violation of terms of commissioning of apartment houses; an inappropriate use of funds; a failure of the developer on the basis of the court decision.
After receiving an application the Housing Construction Guarantee Fund will first of all check the developer for compliance with the new law. In the case of compliance with all the requirements, the Fund will conclude a contract on granting of a guarantee with the developer and the authorized company. Subsequently, the Fund will monitor the targeted use of the shared-equity construction participants’ funds through an independent engineering company, which, in turn, will also monitor the quality of new housing, Onayev stressed.
Guarantee of the Fund will ensure the safety of contributions of real estate investors and completion of construction in a timely manner – the main competitive advantage for equity holders. For developers – the increase in sales by increasing investor confidence, less financing costs due to direct access to the funds of equity holders. Housing construction guarantee, which provides for monitoring of the progress of construction by an engineering company, will improve the quality of housing being built.
“Previously, equity holders invested their money with caution, and hoped the developer would act within the law, and the started construction would not become a long-delayed project. However, as practice shows, not all construction companies have ensured protection of citizens’ investments. All of the above factors will undoubtedly ensure the availability of primary housing for all categories of the population, maximum protection of invested funds, and will enable the equity holders to monitor the progress of construction, Dauren Onayev added.
Implementation of housing construction guarantee mechanism will attract additional investment in the construction of housing, significantly reduce the risks of citizens in shared-equity construction as well as the state’s responsibility for the obligations of unscrupulous developers, increase the volume of housing construction, and contribute to the implementation of the state program of infrastructure development Nurly Zhol for 2015-2019.