President approves system to protect citizens' funds in real estate purchases

President Shavkat Mirziyoyev was introduced to a presentation regarding the system that guarantees the protection of citizens' funds in housing construction.

It was noted that some unscrupulous businesses are exploiting the high demand in this sector. The lack of regulation in payment systems, digitization, and transparency has opened the door for such practices. People purchasing new homes are paying the developers directly, rather than through the bank, causing these funds to remain in the "shadow." In many cases, the delivery dates of homes are delayed, and the money paid by citizens remains "frozen." Shareholder agreements are not registered anywhere and only serve the interests of the developers.

For this reason, the head of state gave an instruction on September 23 at a meeting on the construction industry to create a system that guarantees the protection of citizens' funds when purchasing real estate. Proposals regarding this system were discussed in the presentation.

As mentioned, the "Escrow" system has been tested in foreign countries. According to this system, a contract is signed between the customer and the commercial bank, and an "Escrow" account is opened for each construction project. The agreed funds for real estate are processed through this account. Based on the funds collected in this account, commercial banks provide the customer with a loan at a reduced interest rate. Once the construction is completed, the funds in the buyer's account are transferred to the developer organization. If the developer fails to fulfill their obligations, the funds are returned to the buyer. Funds in the "Escrow" account cannot be subject to enforcement.

The President approved the proposals and gave instructions to create a legal framework for this system and integrate it into the relevant ministries and agencies involved in construction.