Impact of the introduction of escrow accounts in construction activities
The use of escrow accounts has become mandatory in transactions between developers and home buyers since July 2019. The essence of this change in the legislation is that developers will now have to Finance projects only with their own or borrowed funds, the use of equity holders ' funds is excluded, which will protect them from the risks of unfinished construction. The money of the home buyers will be kept in the escrow account, and the developer will receive it only after the housing is put into operation. Now shareholders receive guarantees of return of money in case of suspension of construction or bankruptcy of the Builder. But how this will affect the supply and demand for housing-is not yet known. This article analyzes the advantages and disadvantages of this innovation