Uzbekistan tightens rules on housing construction advertising and buyer protection

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Uzbekistan plans to prohibit developers and other parties from advertising apartment buildings and individual units in projects that have not had their project declarations registered in the Unified Information System. The restriction is part of a new law introducing mandatory escrow accounts for shared-equity construction, which has been approved by the Legislative Chamber and sent to the Senate.

Uzbekistan tightens rules on housing construction advertising and buyer protection

On November 10, lawmakers adopted the Law on the Construction of Apartment Buildings and Other Real Estate through Shared-Equity Participation.

Article 73 of the law sets out requirements for advertising projects built with funds raised from individual investors.

Under the provision, developers will only be allowed to advertise a residential complex and apartments within it after the project's declaration has been published in the Unified Information System.

If the declaration has not been registered in the system in accordance with the established procedure, neither the developer nor any other party will be permitted to advertise the project or its apartments.

Other requirements under the law

The legislation is designed to protect people investing in housing projects by requiring developers to keep buyers' contributions in escrow accounts at banks rather than having direct access to the funds during construction.

The money will be transferred to the developer only after construction has been completed in accordance with the applicable requirements and the property has been commissioned.

Under the law, developers will only be entitled to raise funds from buyers if they meet the statutory requirements, are registered in the Unified Information System, have signed a master agreement with an authorized bank and published the project's declaration.

Shared-equity participation agreements, as well as any amendments to them, will also have to be notarized and registered with the state.

If a developer raises money in violation of the law, investors will be entitled to demand a refund, together with interest for the use of their funds.

The legislation also provides financial mechanisms for replacing an authorized bank or developer when necessary, while ensuring that construction financing continues uninterrupted. Lawmakers say these measures are intended to prevent projects from stalling and provide stronger protection for investors.

The law will take effect after approval by the Senate and signature by the president. Its requirements will not apply to construction projects that received building permits before the law enters into force.