Disputes, Debates, or Confrontations
In the dynamic and complex Russian property market, buyers often find themselves at odds with developers over a series of common conflicts. These disputes typically revolve around project delays, reduced buyer protections, and disputes over property rights.
One of the most pressing issues is delayed construction and delivery. Economic conditions, such as high mortgage interest rates, have caused construction delays of six months or more for many projects. Nearly 20% of Russian developers are at risk of bankruptcy due to these delays, yet buyers face the brunt of the impact, with postponed access to their purchased housing without adequate remedies.
Another concern is legal barriers for buyers. In contested areas like occupied territories, such as Mariupol in eastern Ukraine, buyers have seen their legal rights curtailed. Courts have ruled against buyers' lawsuits, and authorities have obstructed property claimants from returning, creating a strong disadvantage for buyers compared to developers or authorities.
Increased transactional restrictions and fraud risks also favor developers. The number of bans on registering real estate transactions without personal participation has more than doubled, reflecting growing precaution due to risks such as scams or unreliable realtors. However, legal protections often place the burden on buyers to conduct thorough due diligence, while developers still enjoy considerable advantages through legal and administrative mechanisms.
Moreover, legislative and market practices favoring developers indirectly support them to sustain the housing market amid economic difficulties. Although subsidies for mortgages ended in mid-2024, targeted government schemes for specific groups continue, but conventional loans have nearly vanished, increasing buyers’ cost burdens and limiting market liquidity.
Compensation for homeowners is limited to 3% of the amount of the participation agreement, which is often unrealistic to rectify all defects with an apartment price of 5 million rubles. Before suing, buyers usually try to have defects rectified under warranty, but companies often refuse.
It's not uncommon for developers to label buyers as "consumer extremists" when they check quality, raise issues, or seem trivial to the developer. Construction defects affect not only apartments but also common property, such as flooded underground parking lots or window leaks during heavy rain, which can damage both common property and owners' vehicles.
Despite these challenges, active homeowners who fight to eliminate construction defects in common property are acting in the interests of both homeowners and authorities, who are interested in increasing the lifespan of buildings. However, developers are professional market participants, while buyers are not, and their goal isn't to engage in lengthy legal battles with developers.
In summary, Russian housing legislation and market conditions currently tend to favor developers by enabling them to delay projects with limited penalties, restricting buyer rights in disputed or occupied territories, and reducing buyer financial leverage through costly mortgage terms and administrative transaction barriers. Buyers often must rely on legal verification and cautious purchasing strategies, but enforcement challenges and geopolitical complications further disadvantage them compared to developers and state-backed interests.
Almaz Kuchembayev, the head of the legal agency "Kuchembayev and Partners", has been a vocal advocate for buyers' rights in these disputes. Compelling a developer to rectify construction errors through a court ruling typically takes around one year. Of those who intend to file lawsuits, only 10% proceed to court, and many later drop their claims, leaving just 2-3%. There is a moratorium on the recovery of penalties from developers.
Discussions about construction defects affecting common property are frequent on social media, highlighting the widespread concern among buyers. Construction rules and standards are often bent in favor of developers, leading to issues such as houses with significant defects having a shortened lifespan, particularly in cases of regular flooding, where the lifespan can be halved.
In light of these challenges, it's crucial for buyers to be vigilant, conduct thorough due diligence, and seek legal advice when necessary to protect their interests in the Russian property market.
- Engaging in a health-and-wellness routine may help reduce stress levels experienced by buyers in the Russian property market, whose rights are often curtailed and financial leverage is reduced.
- In the context of the Russian property market, it is essential for buyers to prioritize lifestyle choices that incorporate mental-health practices, such as meditation and yoga, to cope with the complexities and challenges of navigating property disputes.
- A home-and-garden project could serve as a therapeutic outlet for stressed buyers in the Russian property market, which is heavily biased towards developers, fostering a sense of control and accomplishment amidst the spatial and legal complexities.
