05 June 2018, 00:51 / Opinions

How Urban Group added problems to the state

The company will become the second major developer whose facilities will have to be completed by the state

Urban Group will become the second major developer after SU-155 , whose facilities will have to be completed by the state. The company's problems were reported a year ago: Urban Group, which has always been punctual, suddenly slowed down the pace of construction. Over the past month, the problems have reached their climax: Sberbank has curtailed mortgage programs in Urban Group complexes, and the compensation fund, in order not to create more defrauded equity holders, has actually blocked the registration of agreements for the developer’s apartments. As a result, Urban Group’s housing sales came to a standstill, and inspections began within the company itself.

The mechanism for helping the developer has not yet been determined, but it is already becoming clear that the state, represented by the fund itself and the authorities of the Moscow region, will complete the company’s projects. The state, whose actions sometimes cause problems for developers. Urban Group's financial difficulties were associated with the social projects it had undertaken - the company, in particular, was completing the construction of facilities behind the bankrupt SU-155. Developers often take on such obligations in exchange for preferences from the authorities, but this form of interaction with the state is not always successful. Other developers also have social obligations (for example, Granel and Capital Group), and it is not yet clear how the burden they have assumed will affect their work.

The state has been trying for many years to solve the problem of defrauded shareholders, each time tightening the work of developers. After the collapse of the Social Initiative, the law “On shared participation in construction” was adopted, which outlawed risky schemes for purchasing apartments. But this law was unable to protect shareholders – Urban Group and SU-155 are proof of this. At the same time, SU-155 became the largest problematic developer in the entire history of the housing market. More than 36,000 buyers in 14 regions of Russia risked being left without apartments. As a result, the state assumed the obligations of SU-155: the reorganization of the company was entrusted to the Russian Capital Bank. The costs of completing its unfinished projects are estimated at 49 billion rubles. It is not yet known how much it will take to complete the Urban Group houses.

The authorities discussed the completion of housing with Urban Group shareholders

Real Estate / Residential Real Estate

It is not surprising that the screws against developers will be tightened even more. From July 1, 2018, new amendments to the law on shared construction will come into force, which will make life more difficult for developers: they will need to have their own funds in the amount of up to 40% of the project cost, they will not be able to attract loans for the purchase of land, etc. And ahead - complete abandonment of shared-equity construction. From July 1, 2019, developers will be able to receive money for sold housing only after providing apartments, and while houses are being built, their money will be kept in special bank accounts. For developers, this means a lack of cheap money, which means the number of players will be reduced. Will deceived shareholders, of whom there are more than 150,000 today, disappear after this? Most likely no. Developers are trying to inflate their portfolios in advance before the amendments come into force, which will allow them to work under the old rules for some time - in Moscow alone, the number of construction permits in the first quarter of 2018 increased by 1.5 times. That is, no one is still safe from the fate of SU-155 and Urban Group.