People who invest in constructions and then end up without money and a home cannot recover their investments. According to a study by Transparency-International Moldova on the risks of investing in housing constructions, the law doesn't require the state to intervene and defend the interests of citizens who become victims of the frauds or bankruptcy of companies building apartment blocks. According to the authors of the study, the situation is critical and requires urgent legislative and institutional measures.

 

Ianina Spinei, TI Moldova export, told a press conference at IPN on Monday, December 22, that the study was conducted after the mass media told numerous stories of people who invested in constructions and then were dragged through endless trials with the entrepreneurs that delayed the finalization of works or that went bankrupt.

 

The study focuses on trials caused by abandoned or compromised projects of apartment blocks, which involve hundreds of individual investors. Ianina Spinei said that despite tens of prosecutions started against companies that didn't fulfill their obligations towards citizens, 37 of which were even filed in court, no company was punished.

 

Lawyer Zinaida Gutu, author of the study, said that people who decide to invest in the construction of an apartment block cannot cope with the overly complicated procedures and cannot compete with powerful creditors such as the banks. The study identified 15 companies that went bankrupt and abandoned the constructions.

 

Gutu's recommendations to overcome the critical situation include the modification of several legal provisions. One of them concerns the registration in the real estate registry of contracts regarding the construction of apartments, of constructions financed with citizens' investments and regarding the bank's mortgage rights to these constructions. Insolvency laws also need to be amended in order to guarantee the investors' ownership rights to the contracted apartments.

 

The lawyer also thinks a special law is needed to regulate the relations of construction companies with citizens and the process of signing and carrying out investment contracts. Last but not least, the specialized central agencies should be enabled to supervise companies that manage the construction of apartment blocks in which individual people have invested.

 

The study was conducted with financial support from the East European Foundation, from funds offered by the Government of Sweden and the Ministry of Foreign Affairs of Denmark.