Ukraine's anti-crisis legislation has been amended to address the issue of unfinished construction and support for the mortgage market of Ukraine. In particular, money from the stabilization fund can now be used to buy out unrealised housing from construction companies and/or financial institutions and to buy out the high-risk mortgage loans of individuals from creditors.
Priority will be given to construction objects that are 70% complete (in 2009) and 50% complete (in 2010). The Government, with assistance from the relevant state architectural authorities, will determine the degree to which the projects are complete as well as other specific criteria for selecting eligible projects. The bought out housing will become part of the state social housing that is distributed among citizens needing improved living conditions and civil service housing. It is expected that the state will cover the cost of the legislative minimum of living area per person (i.e., 21 sq.m per person and 10.5 sq.m per family), and the individuals themselves will pay the rest. The Government should adopt a more detailed procedure within the next month.
In addition, the Draft Law "On Amending Certain Legislative Acts of Ukraine to Prevent the Negative Consequences of Financial Crisis", approved by Parliament on a preliminary basis on 19 February 2009, provides for a moratorium during 2009 and 2010 on compulsory eviction of diligent borrowers who have restructured their mortgage obligations with banks.
Law: The Law of Ukraine No. 800-VI dated 25 December 2008 (in force since 14 January 2009), On Preventing the Impact of Financial Crisis on the Development Construction and Housing Markets; amended Law of Ukraine No. 639-VI dated 31 October 2008 On Primary Measures to Prevent the Negative Consequences of the Financial Crisis and on Amending Certain Legislative Acts of Ukraine; the Draft Law of Ukraine No. 3585 On Amending Certain Legislative Acts of Ukraine to Prevent the Negative Consequences of Financial Crisis.
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The original publication date for this article was 03/03/2009.
