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On June 1, a working debate was held in Parliament regarding the draft law on Making Amendments to the Civil Code of the Republic of Armenia authored by the NA deputy of the Civil Contract Faction Gevorg Papoyan and adopted in the first reading.

The main objective of the legislative initiative is to limit the opportunity of managing the constructor’s special account funds and to eliminate access to the special account funds for the constructors until the end of the construction.

The Chair of the Committee Gevorg Papoyan noted that the bill attempts to mitigate the risks that may arise in connection with the construction. Sometimes there are cases when the construction may stop at some phase, and there are no financial resources that will be sufficient for the construction to be completed. Citizens have problems getting apartments.

It was mentioned that the amendments may have certain negative consequences, but their positive aspects are also obvious, which will lead to mitigation of risks.

“The draft law is about reducing risks,” the Chair of the Committee said.

According to Gevorg Papoyan, there are currently two situations. The first is when the right to purchase an apartment is obtained through mortgage loan. In this case, some banks impose a limit. For example, the contract states that 70% is frozen, 30% can be used, there is also a 50/50% option, there is a contract that 80% is frozen, 20% remains. But there is also a possibility to sign the contract with 90-100% availability. If there is such an opportunity, risks may arise.

The second situation is when the bank is not included in the process, and the citizen pays 50% in advance, and then the other 50%. In this case, the risk is also high.

It was noted that it is necessary to prevent and neutralize risks with certain regulations.

The constructors proposed a change in the date of entry into force of the law from 1 January 2024, but not for signed contracts, but for building permits.

According to the deputy of the NA Civil Contract Faction Hovik Aghazaryan, it is possible that in this case some participants will be left out of the market.

According to the deputy of the NA Civil Contract Faction Khachatur Sukiasyan, any money that is invested in construction should be controlled by the banking system.

Before the second reading, all the problematic provisions and all the submitted proposals will be debated, and the revised version of the draft law will be presented at the plenary sitting of the Parliament.

A number of deputies from the Civil Contract Faction, the representatives of the Government, banks and the concerned constructors took part in the debate.