As previously reported by Spot, the president has signed a decree aimed at developing housing construction. Starting from July 1, escrow accounts will be implemented in shared construction projects.

The head of state has approved the proposal from the Agency for Strategic Reforms, the Ministry of Economic Development and Finance, the Ministry of Construction, the Central Bank, and the Ministry of Justice regarding the introduction of the "Unified Life Cycle of Housing" principle. This entails:

  • ensuring the protection of participants in the construction of residential and non-residential properties based on shared participation;
  • organizing housing construction with intensive use of existing resources;
  • reducing the timeframes for the implementation of investment projects in the housing construction sector;
  • creating a reliable and effective opportunity for purchasing housing based on shared participation and mortgage lending;
  • promoting the use of energy-efficient building materials in housing construction.

From July 1, 2025, within the framework of the "Unified Life Cycle of Housing" principle, construction contractors, developers, and builders will be able to attract funds from participants solely based on a notarized shared participation agreement.

After the state registration of the contract, prior to obtaining permission for joint operation of the facility, the parties may transfer the rights of the participant under the shared participation agreement to another party, as well as accept them as collateral.

The property rights and obligations based on the shared participation agreement are included in the participant's inheritance.

Funds under the contract for accounting purposes are placed and deposited by the participant in an escrow account opened at a commercial bank based on the agreement made between the builder, the participant, and the bank.

Operations, arrests, or withdrawals from the escrow account are not allowed concerning the obligations of participants to third parties and the obligations of the builder.

A system is also being implemented for the bank to allocate a targeted loan to the builder after they have completed at least 30% of the total volume of construction works at the first stage using their own funds.

The annual interest rate on loans provided by banks to builders through project financing is determined based on the amount of funds accumulated in the escrow account. Furthermore, the interest rate may decrease as the funds in the escrow account increase.

After obtaining permission for the operation of the facility, the funds deposited in the escrow account are directed by the bank to repay the loan allocated to the builder for construction, while the remaining amount is transferred to the builder. Subsequently, an act of transfer of the shared participation object to the participant is signed, which is registered by cadastral authorities.

If construction and installation works are not completed on time, fixed penalties are imposed for each day of delay. Extensions of deadlines in the contract are only possible with the participant's consent through the conclusion of an additional agreement.

If the delivery of the facility is delayed by six months, the participant may request a refund of the funds from the escrow account through unilateral termination of the contract with the builder.

Moreover, it is prohibited to offer and sell securities that grant the right to allocate residential and non-residential premises in kind to attract funds from participants for the construction of a facility that does not have an operating permit.

Earlier, Spot reported that in 2024, the number of mortgage borrowers in Uzbekistan decreased by 16%.