Azerbaijan.US
Azerbaijan is considering stronger regulatory measures to protect homebuyers, including the creation of a public registry of high-risk construction companies, amid ongoing concerns over unfinished buildings and misused buyer funds.
The proposal was voiced by MP Razi Nurullayev, who argued that greater transparency and financial accountability are essential to reducing risks in the housing market.
Financial Guarantees Before Construction
According to the proposal, developers should be required to provide financial guarantees-such as bank guarantees or other forms of secured funding-before construction begins. If a project is left unfinished, these funds would be used to complete the building, rather than leaving buyers without homes or compensation.
Protecting Buyers’ Payments
Another key element involves safeguarding buyers’ money. Instead of transferring funds directly to developers, Nurullayev suggests placing payments into controlled deposit or escrow-style accounts. Access to these funds would be granted gradually, in line with verified construction milestones.
Such a system, commonly used in international real estate markets, is designed to prevent misuse of funds and ensure that money paid by buyers is tied directly to actual progress on site.
Personal Accountability for Management
The proposal also calls for personal liability for company management in cases of fraud, misappropriation of funds, or deliberate project delays. Nurullayev argues that responsibility should extend beyond the legal entity to include decision-makers who knowingly put buyers at risk.
Toward a More Transparent Market
Supporters of the initiative say that a public list of high-risk developers would help citizens make informed decisions, discourage irresponsible practices, and raise overall standards in the construction sector.
While the proposal has yet to be formalized into legislation, it reflects growing pressure to reform Azerbaijan’s real estate market and introduce mechanisms that prioritize consumer protection, financial discipline, and transparency.
