Mayor's Office of Astana

Official Website of the Mayor’s Office of Astana

05.08.2015, 10:55 Media Centre / News
Information about Building Cooperatives, through which Funds are attracted for Residential Complexes Construction

Continuing the topic of shared holding construction and housing construction in general, today, the city Akimat offers to provide more information on the building cooperatives, through which funds are attracted for the construction of residential complexes.

Construction of residential complexes through the BCs is regulated by the Law "On Housing Relations" (dated 16.04.1997) and Article 108 of the Civil Code of the Republic of Kazakhstan.

Developers and builders are able to attract customers money, selling them unfinished housing, by creating building cooperatives (BCs). In this case, future tenants initially buy shares, but not square meters.

At the same time, each member of the BC, being a shareholder, should be guided by the basic provisions, stipulates that the building cooperative (BC) or housing building cooperative (HBC) is a non-profit association of citizens for purchasing (construction) and exploitation of a residential building, where the right of ownership for the residential building belongs to the cooperative, and the citizens are members of the cooperative and have the right to possession and use of premises assigned to them, in separate cases - the right of disposal in the prescribed manner, and participate in paying costs for maintenance of the common property of the condominium facility.

It is important to note that BC members are involved with their own funds within the HBC in construction, renovation and subsequent maintenance of a multi-apartment building. And there are those cooperatives on the basis of the charter that has been adopted at the general meeting of the founding members of the cooperative. On the basis of Article 56 of the Law, there shall be not less than two-thirds of entities - members of the cooperative or their trustees - at such a meeting.

However, despite the fact that the essence of the HBC is an independent voluntary association of citizens, this process is mostly regulated by construction companies.

Growing interest of construction companies to HBCs has several causes. Creation of HBCs is more beneficial for construction companies, as it protects the buyer to a lesser extent than the Law of the RK "On the Equity Participation in Housing Construction" and other forms of concluding similar agreements. Rights of a shareholder in the HBC are determined by the charter of the cooperative, which is prepared by a construction company before real members join it. Accordingly, this document is, to a greater extent, meets interests of the construction company.

In the HBC, flexibility and legal positions are equally important for developers, if the construction company formed a building cooperative itself, as it is often, with at least three "initiative members". In this case, these members approve the charter of the cooperative, elected the chairman of the board of the cooperative, members of the board and audit committee at the general meeting.

In this case, the contractor (construction company) actually manages the cooperative and has the right, in accordance with Art. 56 of the Law, to influence decisions about the size of the entrance and other fees, as well as, which is not less important, the terms and conditions of commissioning for the residential premises for rent or use of it for non-residential purposes, procedures and conditions for the transfer of the rights and obligations of the cooperative member and other important decisions.

Thus, in comparison with the Law "On the Equity Participation in Housing Construction", interests of the buyer are less protected there, since all the shareholders rights are defined by the charter of the cooperative.

To avoid becoming a victim of fraud, you must carefully examine the necessary permits on the basis of which the construction is carried out. Attention should be paid to the relations of the cooperative and the developer and it is necessary to study the charter of HBC, as well as the provision about the cooperative (if any).

The city Akimat, as well as Kazakhstan Developers Association strongly advise to pay special attention to the following points.

First, it is necessary to know, whether the HBC is a "cooperative and developer" at the same time, employs, as a rule, any contractors agency representative entity as a third party. In the latter case, risks of the HBC members are increasing, since contracts concluded between the HBC and construction company may contain provisions, such as those allowing the construction company not to transfer not completed or completed construction to the HBC in case if the HBC, at least partially, fails to perform its financing obligations. This will lead to the fact that even a conscientious shareholder, a member of the cooperative, will not be able to get his apartment, in case if, for example, not all the apartments will be sold or there will be any failures in the chain of management and financing.

Second, it is necessary to pay attention to the context of the Share Contract, which, as a rule, provides the opportunity for increase of the share in proportion to the cost of the project. In case if the cooperative member is not able to "finance the project until the end" on time, the cooperatives obligations are abstracted for him, the contract is broken. But, in this case, it is difficult to get the money back, since such contracts are usually stating that the funds are returned only after the sale of your apartment (after its commissioning) to another member with a retention "fine". In such cases, the period shall be calculated in years.

Thirdly, the share contracts, as a rule, provide all "optional" expenses for members of the cooperative, including the costs for making the technical passport, registration, content of the finished property before the registration of property rights, etc.

Fourthly, it is necessary to emphasize that the parameters of an apartment (share) readiness, in construction of which the member of the cooperative is involved, is not clearly limited by the contract. Consequently, such an apartment can be, at any time, including during the construction, declared by the HBC as an apartment that is ready for transfer.

Special attention should be given to clarifying the actual area of the apartment, as well as cases of contract termination due to delayed presence, late payment of interim payments (contributions), etc.

Therefore, the city Akimat and KDA again urge people to be vigilant and not to hesitate to scrutinize the contract, not to save on lawyers, trust only to trusted developers.

And the last thing that we would like to sharpen the focus of the city population on is all kinds of real estate agencies and sales agencies, which do not propose to check compliance with the sales offer with the requirements of the legislation, thus, misleading potential buyers on the legality of operations. At the same time, according to the data, often, apartments are offered for sales in the facilities, where construction has been stopped, there is no documents, and, in some cases, in the facilities, construction of which is even theoretically impossible, since there is no relevant right for the land plot.

People, residents of our city, are suffering from such actions. Appropriate claims from citizens, as well as public associations, professional societies, including Kazakhstan Developers Association, with respect to sales of apartments by unscrupulous developers through all sorts of agencies are regularly the matter of reviewing by the interdepartmental commission under the city Akimat. All of them were warned about the consequences of such activities and prevention of further manifestations of these facts.

Thus, for example, Sales Center No. 1 sells apartments of the following developers: "Tolendy" HBC ("Akmolteploservis" LLP): "Venera" RC, "Abat" RC, "Koktal-2" RC, "Anissa" RC, "Anissa-2" RC, Anissa-3 RC; "Karazhat-NS" LLP: "Ak Tilek" RC, "Aspan" RC; "Hayas" LLP ("Atrium" LLP): "Kutty Meken" RC (RC on Tlendiyev Av.), etc.;

"House in Astana": "Hayas" LLP "Kutty Meken" RC; "Stroyklass" LLP "Ak Otau" RC; "Orken" HBC "Senator" RC;

"Astana Duniye": "Toledny" HBC ("Akmolteploservis" LLP) - "Anissa-2" RC; "Orken" HBC - "Senator" RC; "Karazhat NS" LLP - "Aspan" RC;

"Ak Shanyrak" Real Estate Agency LLP: Kaz Avto Development LLP "Turan Astana" RC;

Expo Realty: "Orken" HBC - "Senator" RC; "Hayas" LLP "Tlendiyev" RC; "Toledny" HBC (Akmolteploservis LLP) "Stolichniy-2" RC;

"Real Estate: Your House Is Out There": "Azbuka Zhilya" LLP "Komsomolskiy" RC; "Hayas" LLP "Kutty Meken" RC;

TsRU Real Estate Agency: "Orken" HBC "Senator" RC;

"Astana" Real Estate Agency: "Kapitalstroyservis" LLP "Granitnyy" RC;

"Chelsea" Real Estate Agency: "Bakhyt-11" LLP "Zhastar-4" RC;

Esil Group Real Estate Agency: Politrend-Astana LLP "Pamir" RC and others.

The city Akimat again draws attention to the need to clarify legal components of the facilities that are being sold by these companies, and act within the Law "On the Equity Participation in Housing Construction".

Materials about all the detected facts in violation of the current legislation by developers and agencies are transferred to the law enforcement agencies.

Any use of materials is allowed with the reference to the official website of Astana city