How to check the developer?

Since the price of housing in the facilities under construction is significantly lower than the market value of the finished property, it is very profitable to invest in a new building. However, many people do not dare to enter into a contract at the stage of construction of the house, fearing that construction may be frozen. Not all investors who have invested in buying an apartment can move into it in time.

Often they do not even know where to find out if their house has been put into operation. In order not to get into a similar situation, before buying an apartment under construction, be sure to check the reliability of the developer.

Determining the actual developer.

Before you check the developer, you need to determine exactly who he really is. Very often another legal entity acts on behalf of the real company performing the construction. Such a developer collects money and gives customers all the necessary information, but is not responsible for fulfilling the terms of the contract. To determine the legal entity to which you can later file a claim, you need to ask the developer to provide a form of a standard investment agreement. Most standard contracts contain information about the actual developer. They are located at the very beginning of the document, which lists the parties to the contract.

If the construction organizer is a company, its USREOU code will be specified in the standard contract. In cases where the construction is carried out by a private person, the contract shall specify the name of the developer and his identification number. If the standard contract does not contain the required information, the potential investor should insist on its provision.

What to ask the developer.

The developer should be asked who owns the plot on which the house will be built. If he is the owner of the land, he must show documents confirming the rights to the land. The documents should be carefully studied. They should state that the territory can be used for the construction of a residential building.

If the construction is carried out on land owned by another company or individual, you need to find out in what relationship are the developer and the owner of the site. This will help you understand how they shared the object under construction. Find out the conditions under which the developer and the owner of the site carry out joint activities, will help the contract that gives the right to conduct construction. Such an agreement can be found in the sales department of the company with which the investment agreement is concluded.

The developer should also find out whether he has received permission to build a house in companies that have their own communications on the site. If there are no such permits, the house may not be connected to the water or electricity supply system. It is also important to find out who is financing the construction.

Today, the Real Estate Corporation, according to the legislation of Ukraine, offers several mechanisms to attract investors in housing construction. In particular, these are mutual investment institutions (CIIs): Corporate Investment Funds (CIFs) and Mutual Investment Funds (UIFs), the assets of which are managed by the Asset Management Company (AMC). They invest in construction, concluding investment agreements with developers and trading forward contracts.

A mechanism such as the Construction Financing Fund (CFF), which is created by an independent financial company and also reliably protects investments, is quite popular.

The BSF ensures the transparent use of funds exclusively for their intended purpose and monitors the movement of each investment.

Collection and analysis of information about the developer.

After determining the organizer of the construction you need to gather as much information about him as possible. If the investor is dealing with a legal entity, you must use its USREOU code. You can check the USREOU on the website of the Ministry of Justice. To do this, on the page “free request” you need to enter the digits of the code and perform a search. The date of creation of the company, the names of the founding companies, the size of the authorized capital, the scope of activity and the name of the management will appear on the site. With the help of the database of legal entities of Kyiv, you can learn all the nuances of the activities of each legal entity involved in the construction, including the founding company and the company that provides financing.

You should not trust your money to a company that was recently established and is undertaking the construction of a residential complex for the first time. When collecting information about the company, you need to visit the website of the Unified Register of Court Decisions. In the “Context Search” field, enter the company name. If lawsuits have been filed against her, this resource will contain information about court decisions.

After analyzing the information about the company, you need to start looking for information about managers. Information about an individual can be found using a search engine.

If the manager was involved in various scandals, headed a company that went bankrupt or was recently looking for a job, you should not trust him with money. Similarly, check the information about the organizer of the construction – an individual.

There are other resources where to check the developer. Information about construction companies is collected by various organizations. They can be found on the website of the Association of Affected Investors, as well as on the portals and The register of construction companies can be found on the Meget website.

Checks with the help of professionals.

Realtors know well how to check the reliability of the developer before buying an apartment. They can conduct a full audit of the construction site. Risk analysis can also be ordered from a professional real estate lawyer. It performs all checks independently, using various databases. The result of a lawyer’s work depends on how transparently the construction company operates.