September 24, 2021
Statistics show that despite COVID restrictions, the real estate market is constantly growing: in January-June 2021 alone, 699.6 thousand square meters of the total area of new housing were commissioned in Lviv region, which is 61.4% more than in the corresponding period of the previous year.
The share of the region in the nationwide commissioning of housing in January-June 2021 amounted to 14.6%. Lviv region took the second place among the regions by the volume of housing accepted into service, and the fourth by the growth rate. Per 1,000 inhabitants, we have built 281.3 square meters of total housing area, while in entire Ukraine, it is more than half of that: 115.4 sq. m.
Among such a variety of construction options and developers, it is difficult for an ordinary Ukrainian to find out who to entrust their funds to. After all, it is not at all difficult to create a company, call yourself a “developer” and start collecting funds from investors. It is difficult to estimate everything correctly and build it in a quality manner, and it is even more difficult not to leave the object unfinished and to put it into operation.
Modern history shows that many of our fellow citizens are still ready to give their money to companies with no reputation, and then be in litigation for years and years, trying to return at least some part if the developer simply leaves the object unfinished.
The state usually does not help much in such matters. Trials last for years, developers go bankrupt and disappear, people are hung out to dry loosing funds they had invested.
This is exactly what happened to the investors of the infamous Lviv residential complex Dolce Vita, located at 7, Zaliznychna Street. The developer started a rather beautiful and ambitious project here in the first quarter of 2017, having received permits only for part of it. Completion of construction was scheduled for exactly in a year – for the first quarter of 2018. However, soon after the running start, the construction began to slow down. And soon silence set in on the construction site, because having erected barely half of the object, the developer stopped the works.
“I have noticed as recently as in the summer that the crane does not move and nothing is happening here,” Liudmila Reiter, one of the investors in Dolce Vita residential complex, shared back in 2019. “Of course, I called the sales department several times. I was told that internal work was underway and everything will be completed on time.”
This version is confirmed by another investor – Vitalii Sheiko. According to him, back in December 2018, one of the popular real estate sites already mentioned that the construction of Dolce Vita RC was frozen. “Nobody told us anything,” he says indignantly. “In a flash, both the sales phones and Dolce Vita website were turned off.”
Despite the fact that a few months later, in the winter of 2019, at a meeting with outraged investors, a representative of the developer was still promising that construction would soon – in February – be restored, this is still not happening. Having reviewed their chances of being deceived, the investors turned to law enforcement officers and organize protest meetings. Subsequently, the developer admitted that they would not be able to complete the project on their own, asked the city authorities for some assistance and, together with officials, agreed to transfer the project to another developer – RIEL Real Estate Corporation, already well-known on Lviv construction market. At that time, according to equity holders, 250 apartments in six sections had already been sold. The latter had not even begun to be built at that time.
After analysing all aspects, the experts of the new developer developed another model for this object implementation and decided to complete it. So Dolce Vita became another residential complex started by another developer and completed by RIEL.
“We picked up this object a year and a half ago, when it became clear that the previous developer experienced too much troubles, most likely financial ones”, Rostislav Melnyk, General Director of Real Estate Corporation RIEL, comments. “In the meantime, we have completed the construction of about two-thirds of this complex – as of today, we are putting the completed segment of the facility into operation. The rest will be commissioned before next summer. ”
s of now, Dolce Vita residential complex consists of two houses of five sections each, work in which goes on without a break: in the second house, the construction of both sections’ frames has already been completed. The laying of the walls is nearing completion, windows have been installed, the facade is nearing completion.
All three sections of the first house have been completed. Now the procedure for putting the object into operation is underway. Very soon, the lucky owners will officially receive their square meters.
“Since everything looked very sad in 2019 (six months before the construction was frozen – ed.), Some of us, of course, lost hope that one day, in the foreseeable future, we will see our apartments built at all”, the investor of Dolce Vita RC, who refused to introduce herself, shares her impressions, somewhat agitated. “Just imagine: people paid money, some took out loans, someone borrowed from relatives, friends, and then it turned out that we did not receive what we borrowed money for, but we still have to return it! Imagine yourself in such a situation.”
If a company with a reputation and history had not been involved in the situation with Dolce Vita RC, this notorious adventure could have ended tragically for investors, as well as for many thousands of real estate buyers deceived by unscrupulous developers. As of the end of July 2021 alone, according to information from local authorities, there were 372 unfinished projects near Lviv, UAH 3.6 billion worth. Most of them are in Lviv municipality, the least – in Chervonohrad one. As of now, the regional state administration is working on the formation of a clear list of unfinished objects.
“We talk a lot about unfinished construction, but in fact we do not have a complete picture,” the first deputy chairman of Lviv Regional State Administration Andrii Hodyk said at the summer meeting of the working group on construction work in progress. “The latest lists of objects that we received show that the local self-government bodies themselves do not fully understand what there is on their territories and what to do with it. We would like to have a really objective picture of the region.”
That’s why, before investing in square meters, always check everything carefully, better with lawyers and real estate specialists.
P.S. Recently, the Verkhovna Rada has adopted Draft Law No. 5091 “On Guaranteeing Rights to Real Estate Objects to Be Built in the Future” in the first reading. It provides a number of approaches that will make things significantly harder for unscrupulous developers. In particular, it is planned to introduce a mechanism for registering property rights to construction work in progress and future real estate objects – thus making it impossible at least the prospect of chaotic changes in projects during the construction process without the consent of their investors, and – just as important – the practice of repeatedly selling the same object to different buyers.
RIEL REC, in particular, commended on this document possible influence over the real estate market: the developer convinces that it will significantly reduce the volume of fraud in construction, and therefore significantly simplify the bona fide market players’ activities.
