Legal review of the Revutsky Residential Complex by Дарбудsистем

All New Developments

Building permit

Initially the permit was issued for a completely different project. It was supposed to be an 8-storey retail and office complex with parking. But in 2019 the client of the construction changed and the whole project changed. Now the permit indicates construction of a 25-storey apartment building.

Land

I see 3 main problems with the land:

I draw attention to the fact that it seems only the unfinished mall was pledged as collateral, which investors supposedly have nothing to do with. But the thing is that according to the Law “On Mortgages” a building is pledged along with the land. The land and the real estate on it are inseparable.

Client and courts

Originally the client was the company Optimabudservice. But in 2018 it provided this land for development to the company Дарбудсистем. Accordingly, the building permit was amended and the client was changed to Дарбудсистем. Everything seemed normal. But interestingly, a public organization later appeared that for some reason was unhappy that the construction client had changed and filed a lawsuit to cancel such changes. It lost at the first and second instances and filed a cassation. Then the public organization itself withdrew that cassation and asked to close the case, which the court did. But what surprised me was the following — a month later Optimabudservice itself filed a cassation in the same case. That is, Optimabudservice itself first transferred the land for development to Дарбудсистем, and then tried to challenge that.

The court returned that cassation due to procedural issues; it’s not worth dwelling on them.

From this I draw the following conclusion — there is the former client Optimabudservice, who is currently also the land owner. And there is the new client — Дарбудсистем. They signed a development agreement between them for this land. According to that agreement Дарбудsистем will receive ownership rights to the results of construction (except for that unfinished mall). But judging by the cassation I mentioned, one can conclude that these companies clearly have unresolved disputes between them. Otherwise why would Optimabudservice try in court to dispute that Дарбудsистем is the construction client?

This situation was in 2020. Perhaps it has already been resolved and the companies have settled things between them, or perhaps not. First, it is obvious that there is nothing good about the land owner and the client having unresolved disputes. Second, this situation strongly reminded me of what is happening now with the Warsaw residential complexes. There the companies also cannot agree among themselves.

Developer

The project developer is the corporation “DBK Zhytlobud”. The construction client (Дарбудсистем) entered into an agreement with DBK-Partner to jointly implement this project. According to that agreement the client receives only 100 sq.m. of housing. This is, roughly speaking, one large three-room apartment. All other residential and non-residential premises and parking spaces go to DBK-Partner. Therefore, if you still plan to invest in this complex, pay attention to whom exactly you sign the contract with, because there are many participants in the construction.

Utilities

Whether the building will be connected to utilities is always a mystery. Utility risks are almost impossible to verify. But in the case of this complex I have reasons to think there may be problems. In 2020 there was a court case: the State Emergency Service went to court and demanded to disconnect the electricity to this complex. The State Emergency Service lost the case, but if you read it carefully, it turns out it lost due to formal deficiencies, not because everything was fine at the construction site. Roughly speaking, the State Emergency Service named Optimabudservice as the defendant, which was incorrect. Because there are many participants in the construction, many contracts and powers were divided among many companies, Optimabudservice has no relation to construction issues. Those houses do not belong to it. But reading this case left me with doubts whether there will be utility issues in the future.

Criminal case

Residents of Osokorky appealed to the Kyiv Prosecutor’s Office claiming that the construction is illegal and that part of the land plot is located within the sanitary zone of the Bortnychi Sewage Treatment Plant. A criminal case was opened and in September 2019 the Darnytskyi court appointed an examination of this land plot.

The results of the examination are unknown because they are part of the investigation secret. However, it is known that this criminal case did not fizzle out and is being actively pursued. In early February 2021 an arrest was imposed on the buildings under construction in this investigation, prohibiting any construction work and sales. Very quickly, already in mid-February, the construction client lifted that arrest in the appellate court. It was lifted so quickly that the information probably did not even reach investors. But the fact remains — there is an active criminal case regarding the complex.

I think the conclusions will be very brief. From a legal point of view, this complex is a complete mess — there are definitely problems with the land, it seems there are disagreements among the construction participants, there are plenty of administrative and criminal cases, the completion dates have already been postponed (initially they promised commissioning at the end of 2020). The location and design are a matter of personal taste, but personally I did not see anything good there. I already mentioned the Bortnychi Sewage Treatment Plant and the incineration plant in the review of the Terracotta complex. The proximity of the Bortnychi Sewage Treatment Plant and the incineration plant to the complex seems to me like a bad idea.