Bashkortostan's bill against consumer extremism will be considered in Moscow

The Council of Legislators of Russia accepted a draft federal law on countering consumer extremism submitted by the State Assembly of Bashkiria for consideration.

“The bill is aimed at countering so-called consumer extremism in the construction industry. The problem is gaining momentum. We are talking about abuse of rights in construction - formally on the part of consumers, but in fact - on the part of law firms that use the mechanism of legal protection of citizens to make a profit. When considering disputes between consumers and developers, most of the amount collected consists of fines and penalties. Their size often exceeds the cost of eliminating construction defects. This is detrimental to the construction industry and leads to higher housing prices since the costs are ultimately built into the cost of a “square meter” and borne by the consumer. To meet the interests of all parties, a new mechanism is needed. It must, on the one hand, ensure the protection of the rights and legitimate interests of consumers who purchase real estate, and on the other hand, ensure that the financial responsibility of the developer is proportionate to the consequences of violation of obligations,” commented Kurultai speaker Konstantin Tolkachev.

The bill, in particular, proposes to limit the amount of fines and penalties to the cost of eliminating deficiencies. It is suggested to set the penalty at 1/300 of the Central Bank refinancing rate of the cost of expenses necessary to eliminate the defect of the property for each day of delay since the penalty of 1% provided for by current legislation is disproportionate to the consequences of violation of the obligation.

“First, the bill proposes to regulate the relationship between the real estate buyer and the developer. The primary requirement should be eliminating construction defects free of charge within a reasonable time. If the developer does not take advantage of this opportunity and does not eliminate the deficiencies within 60 days, then the citizen should be able to protect his interests in court. Such a mechanism will facilitate the prompt elimination of construction deficiencies, allow the parties to avoid legal costs, and reduce the burden on the judicial system,” said Konstantin Tolkachev.

Author: Elina Akhmetova