Financing Construction Costs of Shared-Equity Object in Turkmenistan

BUSINESS TURKMENISTAN
Financing Construction Costs of Shared-Equity Object in Turkmenistan
The project declaration includes information about the developer and the construction project.

In accordance with Turkmenistan’s Law on Shared-Equity Construction of Residential Buildings and Other Real Estate Objects, a special bank account under a banking service agreement and on the basis of a written application from the developer is opened in a credit institution for each residential building in the manner prescribed by the legislation of Turkmenistan.

The financing of the actual cost of the developer's costs for the construction of a shared-equity construction facility is carried out by a credit institution on the basis of documents confirming the actually completed scope of work and at the expense of equity holders' funds transferred by them to a special bank account in accordance with an agreement on participation in shared-equity construction.

Are the funds of equity holders returned upon termination of the contract for participation in shared-equity construction?

Upon termination of the contract for participation in shared-equity construction or in the event of other grounds provided for by the legislation of Turkmenistan, the funds of the equity holders transferred by them to a special bank account are returned to their owners by the credit institution on the basis of the relevant documents.

The list of the above documents is determined by the authorized body in agreement with the Central Bank of Turkmenistan.

What restrictions are introduced in the implementation of shared-equity construction?

In accordance with the Turkmenistan’s Law on Shared-Equity Construction of Residential Buildings and Other Real Estate Objects, in the event a developer has arrears in taxes, dues (duties) and other obligatory payments to the State budget of Turkmenistan, the developer is not entitled to attract funds from new equity holders until the corresponding debt is paid off.

What is a project declaration?

The project declaration includes information about the developer and the construction project.

If changes are made to the project declaration, the developer is obliged to notify the equity holders of these changes within three working days.

In case of violation by the developer of the requirements for the project declaration, the shareholder has the right to apply to the court with a claim to invalidate the transaction.

The storage of the original project declaration is carried out by the developer.

Source: Rysgal newspaper, 30.11.2020