Protection of a weaker party while attracting financing for shared housing construction

Abstract

Following the adoption of the Federal Law on Shared Construction (no. 214-FZ) on December 20, 2014, finances of citizens have been attracted for construction through transactions: conclusion of contracts for the sale and purchase of residential premises in the construction project; conclusion of preliminary agreements for participation in the shared construction and the sale and purchase of residential premises in the construction project; entering into loan agreements; issuance of a bill of exchange for the subsequent payment of the dwelling in an apartment building (other property); entering into construction investment contracts, etc. All of the above-mentioned agreements mediate the transfer of finances and (or) other property by the citizen for the construction of an apartment building (other property) with the subsequent transfer of residential premises in such an apartment building (other property) to the citizen. The paper examines the legal consequences of the conclusion between the developer and the citizen of the contract, which in its essence is a shared construction agreement. The practice of courts that consider it possible to apply the measures provided for by the Law on Shared Construction to such contracts is recognized as not entirely acceptable. It has been proposed in the paper to apply the rules on the sale and purchase of a future property to such contracts.

Keywords

• shared construction
• weaker party
• protection of equity holder’s rights
• buying and selling of future property