The federal law introducing new procedures for using escrow accounts in single-family home construction will take effect on March 1, 2025. The measures aim to enhance transparency and protect consumer rights within the construction industry.
Customers utilizing escrow accounts during single-family housing projects will receive protections similar to those buying apartments in multifamily buildings. The contractor can only access funds from the escrow account once the property title is registered. If obligations are unmet, individuals will receive refunds. Additionally, escrow accounts must be with banks that have an adequate credit rating, and funds are insured up to ₽10 million.
Individuals have the right to halt construction and retrieve their money from the escrow account after compensating the contractor for expenses on materials and labor.
Loans under the Family Mortgage program require that funds used for construction payments be deposited in escrow accounts. The Bank of Russia anticipates this mechanism will appeal not only to individuals but also developers.
Contractors adhering to these new procedures must disclose detailed information through the Unified Housing Construction Information System. This includes data about legal entities, potential single-family house projects, expected costs and timelines, as well as details of the authorized bank managing the escrow account.