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How to Avoid Fraud during the Construction of Your House

After the scandal involving fraud of the investors by the group of companies “Elita-Center” number of such investors interested in the construction has significantly reduced.

At the moment there is a practice to indicate as a deadline for putting into operation of the project quite odd terms such as quarter or half a year. According to the view of the managing partner of the company Sergey Burya this is absolutely incorrect phrasing from the standpoint of the construction sphere.

If the agreement contains a provision related to the possible price alteration, one should request specific determination of the frameworks of such change, for instance, by 10% or 50%. Sergey Burya advises to think first whether you are ready for such alterations.

It happens very rarely in Kyiv that investment agreements contains detailed and clear provisions on the penalties for the untimely completion of the project by the builder as well as provisions which set forth specific date of the putting of the project into operation.

When the calculation of the penalty does begin? What is specific form of the penalty, in particular, partial repayment, reduce of the price of square meter or increase of the quantity of meters? Is prosecution of the builder the only way to punish him? Sergey Burya cautions that at the moment when you sign the agreement all these points should be ultimately clear.

According to the lawyers it is sufficient to make one step for the fiction to become reality. They refer to the management companies.

Sergey Burya says that such companies exist in Ukraine however they are not sufficiently developed yet while abroad none of the construction is carried out without an independent company. Such company is employed either by the investors or by the customers for the supervision over the executors.

Prepared on the basis of the article “How to Avoid Fraud during the Construction of Your House: FAQ for the Investors”. (Gazeta po-Kiyevski # 74 (574), 03.04.06)

[ “Gazeta po-Kiyevski” # 74 (574) 03.04.06 ]

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