Sokolov proposed to require citizens building houses with a mortgage to open escrow accounts.

      Today, June 17, the committee of the Legislative Assembly considered the proposal of the Governor of the Kirov Region, Alexander Sokolov, to send a draft federal law to the State Duma. It introduces amendments to the Federal Law "On the Construction of Residential Buildings under Construction Contracts Using Escrow Accounts."

      Let us remind you that the essence of escrow accounts is that the customer does not give money to the contractor but leaves it in a special account, where it remains until the contractor completes the house. Only after that can they receive it. However, as stated in the explanatory note to the draft law, escrow accounts often come at a high cost to customers, as contractors take out loans for construction and include interest in the total cost of work. Because of this, some customers prefer to do without escrow accounts and give money to contractors upfront. If the contractors turn out to be unscrupulous, in such cases, customers are left without housing and without money. There are already more than 20 such cases in the Kirov Region.

      Currently, an escrow account is opened if the customer and contractor have directly agreed to its use. It is also mandatory for family or rural mortgages. The new draft law proposes that escrow accounts be opened both with the corresponding agreement with the contractor and without it, if the customer has taken out a mortgage for the construction of a private house.

      Several committee members criticized the initiative. They expressed the opinion that the law will not solve the issue of unscrupulous contractors. Moreover, it will protect the rights of customers, but at their own expense.

      Ultimately, the committee supported the proposal. It will be considered at the plenary session of the Legislative Assembly.