Legal review of the Great residential complex (GREAT). Developers: Ріел, IB Alliance, Киевгорстрой

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Prices as of April 2021 Residential Complex Great

Number of rooms	Area	Price per m2
1-room	41 – 63 m2	26750 – 39100 UAH/m2
2-room	66 – 109 m2	23500 – 35350 UAH/m2
3-room	80 – 118 m2	23300 – 32900 UAH/m2
4-room	135 – 170 m2	26650 – 37700 UAH/m2
5-room	168 – 194 m2	26400 – 34550 UAH/m2

Complex characteristics

• Class – comfort
• Buildings – 13
• Floors – 26
• Technology – monolithic frame
• Heating – autonomous (in the building)
• Walls – brick, aerated concrete block
• Insulation – mineral wool
• Ceiling height – 2.7 m
• Parking – above-ground multi-level, underground with elevator

Developer and client (Ріел, IB Alliance, Киевгорстрой)

The GREAT complex is quite large, which is why there are many participants in its construction.

Three developers participate in the project implementation: Киевгорстрой, РІЕЛ, which is involved in the construction of such Kyiv complexes as Oakland, Lviv Quarter, Elysium, and IB Alliance is known for the Zarichnyi complex and Dybova Park. Now let’s move on to the client of the construction — the one who is directly issued the building permit. In this complex there are as many as 5 of them, whereas usually it is one company or an individual.

In the paper versions of the permits available on the complex’s website, the clients are listed as 4 companies and one individual.

In the same permits in the online registry the client is listed only as the company Europolitech. This may be simply due to the functionality of the online registry; most likely there is only one field for the client and not all were displayed.

But the point is that all these clients have rights to the construction objects, and accordingly there should be some agreement between them on organizing joint activities.

Poznyaky Infrastructure

Some key advantages of the GREAT complex in terms of infrastructure:

• The Dnipro River bank is only 90 meters away, so if your windows face the Dnipro, you can be sure you won’t have to look into neighbors’ windows, since nothing else will be built there.
• Apartment layouts in the complex can be found for every taste – there are standard layouts, irregular polygon-shaped apartments, and duplex apartments.
• The complex is being built according to the “city within a city” concept — in addition to standard shops/restaurants, a kindergarten with a primary school, office and commercial-office complexes, and a mini stadium for sports activities are planned.
• Nearby there is a yacht club and Bereznyaky beach, the new River Mall shopping center and many gyms.
• For motorists, an important detail is the proximity to the Darnytskyi Bridge and the Paton Bridge.
• For families with children – there are at least 3 public schools and the Kyiv Engineering Gymnasium relatively nearby.

Building permit

At the moment, there are many building permits for this project on the GASK website, because there are many buildings.

I checked the following buildings:

• permit for the first three buildings (this is the first phase)
• permit for buildings 4 and 5 (this is the third phase)
• permit for buildings 6 and 13 (this is the fourth phase)
• permit for buildings 7 and 12 (this is the fifth phase)

The second phase was not listed here and I became curious about what is being built there. The GASK website has a permit for the second phase. It states that these are “Apartment buildings of increased comfort, individual.” For comparison, in all other phases it is indicated “Apartment buildings of mass development.”

It turns out that all the permits I checked are in order, they are on the GASK website, they are valid, issued for the construction of 26-storey buildings and, judging by the website, the developer is indeed building them. The only thing I still did not understand is what this second phase is. This permit is not on the complex’s website, but it is in the GASK registry, and that is far more important. The sales manager says that it is building 5, but on the complex’s website a different permit is indicated for building 5. However, such details need to be clarified in person at the sales office.

Land for the Great residential complex

There are indeed many land plots where the Great complex is being built, and each one needs to be checked separately. There are no arrests on the land, and the majority of the land plots are in the communal ownership of the Kyiv City Council (except for one plot that belongs to one of the construction clients). The Kyiv City Council transferred these plots to the construction client by contracts.

Different land plots were transferred to different clients. I mentioned above that there are 5 construction clients and it is important to understand how they divided responsibilities and rights among themselves; as a result, rights to the land plots are held by different clients. There is nothing wrong with this. But if you decide to buy an apartment in this complex, we recommend thoroughly checking specifically the plot on which your building is being erected.

It is also important to know that some land plots belong to protected zones and construction on them may be carried out with certain restrictions – this is another reason why it is important to take a closer look at the land at the GREAT complex.

Legal proceedings Ріел, IB Alliance, Киевгорстрой

At the end of 2020, one of the construction clients filed a lawsuit against the tax authority. The tax office claimed that the client understated the land rent and did not pay almost one and a half million hryvnias to the budget; about another UAH 360,000 was assessed as penalties. The client lost in the first instance. But in early April 2021 he won the appeal and this tax decision was completely overturned. This is good for the client because the amount is substantial, but I very much doubt that the tax office will stop and not want to fight for this money. It may file a cassation, so this case needs to be monitored.

Then in May 2019 the State Bureau of Investigation started work on a criminal case. It does not concern the GREAT complex exclusively, but the work of GASK in general. Preliminary assumptions suggest that a large number of permits were issued by GASK illegally. To investigate this, at the end of 2019 the State Bureau of Investigation obtained permission from the Pechersk court to search and seize permits for as many as 37 construction objects from GASK. The GREAT complex was in this list. So, the question regarding permits was clearly relevant. What is happening with this criminal case now is unclear, because a criminal case is confidential during the investigation.

Investment scheme

The GREAT complex uses a preliminary sale-purchase agreement for an apartment. From a legal point of view this scheme does not protect the buyer’s rights very well. But many developers use it, and the real question is whether the complex has serious problems. Because if everything is fine with the complex and the building is commissioned, you will not face the risks of the agreement. If there are problems and you have to go to court, the first thing the court will look at is your contract. And then the risks of this agreement will become apparent.

I had the GREAT project’s contract under review and I will give my recommendations based on it. In the contract pay attention to the following points:

With whom you sign it. First, you will sign it with an investment fund. You need to verify that this fund has the authority to sell you the apartment, that is, check the agreement between the fund and the client. Secondly, this complex has as many as 5 construction clients. You need to check how issues between them are regulated. At the sales office they told me that they can show all the contracts, so you can come with a lawyer.

The contract lists the planned commissioning date of the building. You should understand that the word “planned” does not convey much specificity. In addition, the contract states that you may terminate the agreement if the commissioning date is delayed by more than 12 months. Usually the allowed postponement is fixed at the level of 4-6 months and this is the first contract in which I see the possibility to postpone such an already uncertain date by so long.

Conclusions

The GREAT complex promises to be very colorful. I really like the overall concept, visualization, infrastructure and location. Among the construction participants there are quite serious players that add confidence to this complex. The criminal case concerning GASK’s activities and which mentions the GREAT complex worries me, but you won’t be able to find out much about this case for sure — maybe it has already “stalled.” The SVITLO PARK complex, which was also on that list, has already commissioned its first phase, so the criminal case did not prevent that.

It is impossible to predict whether the work on the criminal case will become active in the future, so just take this risk into account. Before investing in the GREAT complex, I would definitely recommend checking in detail the land on which your building is being constructed, verifying the entire chain of contracts between the construction clients, as well as the documents with the investment fund with which you will sign the preliminary agreement, and be sure to have a lawyer review it, because, in my opinion, this scheme generally does not protect your rights very well and you should try to make amendments to the contract to minimize your risks.