Review of possible changes in the legislation on housing construction cooperatives and housing cooperatives

Integrites has the honor to bring to your attention the following information, which we hope may be useful in your company activities.

Several changes and amendments can be adopted in Kazakhstan to a number of normative legal acts in the sphere of housing and housing cooperatives in the nearest future. These changes might embrace several provisions of the Civil Code of the Republic of Kazakhstan, Laws of the Republic of Kazakhstan “On Housing Relations” and “On the Consumer Cooperative”.

The Ministry of Investment and Development of the RK developed the Concept of the Draft Law of the Republic of Kazakhstan “On Changes and Amendments to Certain Legislative Acts of the RK on the Organization and Operation of Housing and Housing Cooperatives.” (hereinafter – “the draft law”). The draft law was developed in response to the Prime Minister of the RK request that he gave as a result of the Government Meeting No. 19 dated May 23, 2016. It acquires considering the measures regarding the identified facts of raising the funds by population for housing purchases through consumer cooperatives and preventing the creation of financial pyramids.

Pursuant to the proposed changes, certain provisions of the legislation will be clarified and amended. Thus, improvements of the organization and activity of housing construction cooperatives (hereinafter – “HCC”) and housing cooperatives (hereinafter – “HC”), termination of contradictions, gaps and collisions in the current legislation are to be expected.

In particular, the Concept proposes to revise the procedure for joining members of the housing cooperative, namely, the members of the HCC shall be natural persons only and the number of members of the HCC shall not be less than 50% out of the total quantity of residential premises in a multi-apartment building or residential complex, but shall not be more than quantity of all residential premises in these real estate facilities. The Concept also proposes to revise the norms regarding registration (re-registration) of a HCC, establish a norm on the mandatory availability of a private or lease land plots, provide grounds for re-registration of the HCC in case approved project documents for the construction of facilities or the number of proposed shareholders changes, and etc.

All in all, by adopting changes and amendments, the draft law is pursuing the strengthening and tightening of requirements for HCC and HC, thereby increasing the responsibility of construction marketplace participants and reducing the possibility of bad-fair acts by developers.

The Concept of the draft law touches the interests of the private entrepreneurship; accordingly, it was sent to the chartered associations of private entrepreneurship and the National Chamber of Entrepreneurs of the RK to obtain an expert opinion pursuant to Article 19 of the Law of the RK “On Legal Acts”. It is also posted on the E-Government portal for open discussion.