Commentary to Decree No. 263 of 6 June 2013

    President of the Republic of Belarus Aleksandr Lukashenko signed decree No. 263 “Concerning shared construction of facilities in the Republic of Belarus” on 6 June.

    The document sets forth general principles of shared housing construction of multi-dwelling and single-dwelling buildings and townhouses for various categories of people. The decree also includes a provision on shared housing construction of facilities in Belarus, the form of a model agreement on shared construction of buildings with state support and/or with the restricted profit of the developer.

    Along with the existing norms which regulate relations in shared construction, the decree envisages the following additional measures regarding the rights of shareholders and the responsibilities of developers.

    Thus, self-employed businessmen cannot become developers.

    Local executive bodies will issue certificates for shared construction with state support and/or with the restricted profit of the developer only taking into account the date when the person was put on a housing waiting list.

    The citizens who build housing using state support and/or with the restricted profit of the developer can sign only a model agreement. Moreover, it is now prohibited to sign contracts, in which the cost of shared construction is pegged to foreign currency exchange rate. The norm does not apply to those who are not on waiting lists.

    For the persons on the waiting lists, the preference restricting profit to 5% of the estimated cost of the shared construction project will be applied to a specified area of the apartment, which is 20 square metersof the total space of the apartment per each family member, 15 square metersin Minsk, 20 square meters for families with many children.

    Local executive bodies which issued certificates for shared construction will supervise the procedure of signing and implementing construction contracts.

    With a view to preventing resale of apartments and ensuring the compliance of shared construction contract with the legislation, local executive bodies will register contracts and amendment agreements in case the terms of construction are changed.

    The decree also specifies the order of termination of contracts.

    In case of early termination of the contract the developer will have to grant the right to finish the construction of housing to a family member of a shareholder.

    The price of shared construction can be revised upon the initiative of the developer only in case the statistical indexes of prices of construction works are revised and/or the legal norms concerning indirect taxes are introduced. If amendments or addenda are made to the project documentation the price of a construction project can be revised only upon the agreement of parties.

    In line with the document, the developer shall conduct annual auditing of the use of funds in the construction project and submit the copy of audit reports to local executive bodies.

    The delivery date of a project depends on the normative construction period. Upon the permission of local executive bodies, the developer can postpone the delivery date.

    In case the developer fails to finish construction in time, the developer will have to pay the forfeit after the construction is completed.

    Moreover, the contract may provide for the responsibility of the developer for the failure to fulfill obligations in time.

    The developers’ profit which is calculated upon the signing of a construction contract can be revised taking into account the increase in the cost of construction.

    The warranty period of a facility now makes five years instead of two.

    The decree does not apply to the shared construction contracts signed before the decree entered into force.

    The decree shall enter into force three months after its official publication.