Uzbekistan introducing new system for transparent and secure housing construction

On December 12, Shavkat Mirziyoyev reviewed a new system aimed at guaranteeing public funds in housing construction.

It was noted during the presentation that delays in delivering housing are common, leaving funds paid by the public "frozen." Additionally, equity participation agreements are not registered anywhere and often serve only the interests of the developer.

In an interview with the “Uzbekistan 24” TV channel, Sherzod Khidoyatov, the Minister of Construction and Housing and Communal Services, spoke about the planned changes.

"Currently, in most cases, housing is being constructed randomly through equity participation. Our esteemed president has instructed that this issue be addressed legally, by studying international practices and implementing a suitable law here. The goal is to establish a system that ensures people are provided housing on a proper, legal, and reliable basis, removing doubts and problems," he said.

According to him, under the new system, banks will be responsible for managing the funds from the public.

"People will take their money not to an unknown builder but to a bank. The bank will transfer these funds to a reliable developer, who must complete 30% of the work using their own funds. The remaining 70% will be allocated by the bank specifically for the construction of the house. Customers cannot redirect the money for other purposes. Developers will use it exclusively for building and delivering the object. Only after the escrow system concludes will they be allowed to direct profits to other uses," said Sherzod Khidoyatov.

The presentation highlighted that once registered on an electronic platform, changes to the design of residential and non-residential properties, as well as reconstruction or sale-related modifications, must undergo expert review and will be restricted. Additionally, incomplete construction projects will be prohibited from obtaining cadastral documents or selling the land where the object is located.

If a credit is provided for the construction of an object and the developer fails to complete the work, the project will be transferred to the bank’s balance to ensure completion.

"The president gave instructions to avoid freezing public funds. For instance, if a person pays for housing but their plans change, the new system will allow them to sell the asset within the escrow system," Khidoyatov explained.

All operations are planned to be carried out through the Ministry of Construction's "Transparent Construction" system. This system will collect data from the Construction Inspection, the Department of Architecture and Urban Planning, the National Center for Expert Examination of Urban Planning Documents, and the Cadastre Agency.

"The most important goal is to ensure guaranteed housing for the public," the minister concluded.