Kazakhstanis warned in what cases it is extremely risky to invest in housing construction

If the developer does not show a FGHS guarantee, and the Akimat declares that no permit has been issued for this object, it is extremely risky to invest money in the project, warned Kazakhstani Chairman of the Board of the Housing Construction Guarantee Fund JSC Daniyar Zhumashov.

“What principles for the protection of share holders are in force today in the framework of the Nurly Zher program? Firstly, the housing construction is guaranteed by our subsidiary, JSC FGZhS. Developers who want to attract funds from real estate investors during the construction period apply to the PFHC. The Fund, in turn, assesses the reliability of the company, its financial stability, takes into account past projects and provides a guarantee, which means ensuring the completion of construction. That is, if a guarantee event occurs (non-compliance with the deadlines, identification of misuse of funds, bankruptcy of the developer), the Fund becomes the project manager and provides additional funding for the construction of a residential house. In other words, the interests and rights of shareholders are protected by the state to the fullest extent, ”said Daniyar Zhumashov.

Secondly, he noted, if the construction company received a FGWS guarantee, this information will be posted on the Foundation's website. If there is no such guarantee, then the developer must have permission from the akimat to raise funds from co-investors.

“In order to avoid possible risks, citizens need to clarify information about the developer in the local executive body. If the developer does not show a FGHS guarantee, and the akimat declares that no permission has been given for this object, it is extremely risky to invest money in the project, ”Daniyar Zhumashov warned.

Thirdly, according to the chairman of the foundation, the contract on share participation in housing construction is approved by law, other forms of contracts with share participation are prohibited. If the contract complies with the standard form, then it must be registered with the local executive body.