Escrow-based home purchase requirement not yet in force – Ministry of Justice

The ministry said it has drafted and submitted to the government a bill titled “On the construction of multi-apartment buildings and other real estate objects based on shared participation.” Issues related to the introduction of the escrow system are also envisaged to be regulated by this law.

According to the ministry, a relevant presidential decree has approved a set of comprehensive measures to implement priority areas for improving the housing construction sector.

In line with this, the Ministry of Justice developed and submitted to the government the draft law On the construction of multi-apartment buildings and other real estate objects based on shared participation. The regulation of matters related to the escrow system is also envisaged under this legislation.

The ministry stressed that the information circulating on social media has no legal basis.

Under the escrow system, buyers do not transfer funds for an unfinished building directly to the developer. Instead, the money is placed in an escrow account at a bank and is not released to the developer until construction is completed. At the same time, banks, taking into account the funds held in escrow accounts, provide developers with loans at lower interest rates.