Kaisar Omarov, Chairman of the Committee for Construction and Municipal Housing Economy Affairs at the Ministry of Industry and Trade reported that the Law of Kazakhstan on Shared Interest in Residential Construction would be amended to impose stricter requirements to construction companies. In particular, one of the amendments will serve to increase required authorized capital of the developer up to 20% of the construction cost.
In such a case, if authorized capital does not meet legal requirements, "100% insurance of developer’s loan shall be provided", says K. Omarov. Therewith he noted that such practice had already been used in
These amendments will result in fewer developments constructed using the funds of interest-holders, says the chairman of the Committee, but at the same time "volumes of residential construction in general will not decrease".
As explained by K. Omarov, the said amendments to the law on shared interest in residential construction would be made in June 2008, and expected to come into effect starting from January 1, 2009.
Law on Shared Interest in Residential Construction was passed in 2006, however, in practice, provides almost no protection of interest holders’ rights.
Source: www.kn.kz
