Article 20. Ensuring the targeted use of money in equity participation in housing construction The Law on Equity Participation in Housing Construction

Home / RLA / Article 20. Ensuring the targeted use of money in equity participation in housing construction The Law on Equity Participation in Housing Construction

Note from <url>! Paragraph 1 is provided for in the wording of the Law of the Republic of Kazakhstan dated 30.06.2025 No. 204-VIII (effective sixty calendar days after the date of its first official publication).

1. In order to ensure the targeted use of money allocated for the construction of an apartment building or a complex of individual residential buildings, an authorized company is required to open no more than one current account in the national currency in only one second-tier bank.

An authorized company has the right to open a current account in the national currency in a second-tier bank.:

no more than one current account in a foreign currency;

no more than one savings account in the national currency.

Money transfers may be made between the accounts of an authorized company specified in this paragraph, provided that the authorized company continues to comply with the requirements of paragraph 6 of this article.

When organizing equity participation in housing construction by obtaining a guarantee from a Single Operator, an authorized company is required to open a current account in foreign currency with a second-tier bank with a credit rating of at least "B+" assigned by one of the rating agencies. If there are ratings from several rating agencies, the lowest is applied.

2. The use of money from the authorized company's bank account is carried out in accordance with the terms of the bank account agreement for financing purposes in accordance with paragraph 8 of this article on the basis of certificates of completed works confirmed by the engineering company.

Note from <url>! Paragraph 3 is amended by the Law of the Republic of Kazakhstan dated 30.06.2025 No. 204-VIII (effective sixty calendar days after the date of its first official publication).

3. When organizing equity participation in housing construction by obtaining a guarantee from a Single Operator, a bank account is used to place money from an authorized company in accordance with subitems 3) and 4) of paragraph 3 of Article 8 of this Law, money received to pay for shares in an apartment building or a complex of individual residential buildings with borrowed funds (if available) and spending money according to the acts of work performed in accordance with the design and estimate documentation.

Note from <url>! Paragraph 3 is provided to be supplemented with parts two, three and four in accordance with the Law of the Republic of Kazakhstan dated 30.06.2025 No. 204-VIII (effective sixty calendar days after the date of its first official publication).

If necessary, during the construction process, the purchase of building materials with a cost higher than that established by the design and estimate documentation, the use of funds by an authorized company in the following order is allowed without adjusting the design and estimate documentation.:

1) own money deposited in accordance with the requirements of this Law;

2) money received to pay for shares in an apartment building or a complex of individual residential buildings, including in the context of income from each shareholder;

3) borrowed funds (if any) provided for the purpose of financing the construction of an apartment building or a complex of individual residential buildings.

An authorized company is prohibited from using the money of shareholders if it has its own money deposited in accordance with the requirements of this Law.

To confirm the cost of materials, the authorized company submits to the Single Operator the relevant documentation on cost changes, approved by the authorized company and the developer and agreed upon by the engineering companies that carry out copyright and technical supervision.

Note from <url>! Paragraph 4 is amended by the Law of the Republic of Kazakhstan dated 30.06.2025 No. 204-VIII (effective sixty calendar days after the date of its first official publication).

4. When organizing equity participation in housing construction by participating in a second-tier bank project, a bank account is used to place and use money received to pay for shares in an apartment building or a complex of individual residential buildings and spend money in accordance with certificates of completed work in accordance with design estimates.

5. When carrying out activities to organize equity participation in housing construction by attracting money from shareholders after the construction of the frame of an apartment building, a bank account is used to place money from an authorized company received to pay for shares in an apartment building and spend money in accordance with the acts of completed work in accordance with the design and estimate documentation.

6. An authorized company ensures that money is recorded in a bank account in the context of:

1) own money deposited in accordance with the requirements of this Law;

IZPI's note! Subparagraph 2) is amended by the Law of the Republic of Kazakhstan dated 30.06.2025 No. 204-VIII (effective sixty calendar days after the date of its first official publication).

2) money received to pay for shares in an apartment building or a complex of individual residential buildings, including in the context of income from each shareholder;

Note from <url>! Subparagraph 3) is amended by the Law of the Republic of Kazakhstan dated 30.06.2025 No. 204-VIII (effective sixty calendar days after the date of its first official publication).

3) borrowed funds (if any) provided for the purpose of financing the construction of an apartment building or a complex of individual residential buildings.

IZPI's note! Paragraph 7 is amended by the Law of the Republic of Kazakhstan dated 30.06.2025 No. 204-VIII (effective sixty calendar days after the date of its first official publication).

7. The basis for crediting the money of an equity holder to pay for shares in an apartment building or a complex of individual residential buildings is a signed agreement on equity participation in housing construction.

8. Compliance with the targeted spending of money by an authorized company is ensured by their use on:

1) construction and installation work, project management costs, author's and technical supervision;

Note from <url>! Subparagraph 2) is amended by the Law of the Republic of Kazakhstan dated 30.06.2025 No. 204-VIII (effective sixty calendar days after the date of its first official publication).

2) payment of the commission on bank accounts and remuneration for servicing a bank loan, as well as repayment of part of the principal debt on a bank loan by transferring an amount not exceeding the total amount of paid construction and installation work for the construction of an apartment building or a complex of individual residential buildings and the actual balance of money in the bank account of an authorized company, minus the design cost;

2-1) payment of advances in accordance with paragraph 3 of Article 19 of this Law;

IZPI's note! Subparagraph 3) is amended by the Law of the Republic of Kazakhstan dated 30.06.2025 No. 204-VIII (effective sixty calendar days after the date of its first official publication).

3) other expenses of the authorized company related to the construction of an apartment building or a complex of individual residential buildings and the implementation of the project, in the amount of no more than ten percent of the project cost, including advertising costs, maintenance of management personnel, utilities, telecommunications services, office rental costs, costs for the manufacture of technical quality control passports, laboratory tests, payment of taxes and other mandatory payments to the budget, payments of mandatory pension contributions and mandatory occupational pension contributions, contributions to compulsory social health insurance to the Social Health Insurance Fund.

Note from <url>! Paragraph 9 is amended by the Law of the Republic of Kazakhstan dated 30.06.2025 No. 204-VIII (effective sixty calendar days after the date of its first official publication).

9. Monetary settlements between an authorized company and its contractor (general contractor) prior to the commissioning of an apartment building or a complex of individual residential buildings are carried out exclusively through a bank account.

10. If the misuse of shareholders' money is detected, the engineering company informs the Single Operator, the local executive body or the second-tier bank within three working days (depending on the method of organizing equity participation in housing construction).

IZPI's note! Paragraph 11 is amended by the Law of the Republic of Kazakhstan dated 30.06.2025 No. 204-VIII (effective sixty calendar days after the date of its first official publication).

11. The money of an authorized company deposited in a bank account may not be the subject of other civil law transactions of the developer or the authorized company, not provided for by this Law, with third parties until the acceptance of an apartment building under construction or a complex of individual residential buildings into operation, and in the case of a guarantee from a Single Operator and the occurrence of a subsequent warranty case – until full reimbursement of the costs of a Single Operator upon completion of the construction of an apartment building or a complex of individual residential buildings.

The Law of the Republic of Kazakhstan dated April 7, 2016 No. 486-V SAM.

This Law regulates public relations related to the activities of equity participation in the housing construction of multi-family residential buildings by attracting money from individuals and (or) legal entities, and also establishes guarantees for the protection of the rights and legitimate interests of the parties to the agreement on equity participation in housing construction.

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Republic of Kazakhstan

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