Fraudulent sale of flats to several buyers simultaneously becomes topical again

Baku/12.05.22/Turan: In recent times the issue of sale of flats by construction companies to several buyers simultaneously has again become topical.  In April, the head of the housing and construction cooperative (HCC) "Sahil-S-Inşaat" was arrested on the case.

On May 6, the chairman of Star-M HCC and concurrently the de facto head of ŞANS HCC is accused of selling 17 flats located in residential buildings built by the cooperatives he heads to 36 individuals in the period 2018-2021 by drawing up fictitious contracts and financial statements, as well as 7 non-residential premises, whose sale is prohibited by law, to 14 physical entities in the same manner.

Baku resident Eldar Yusif said he bought a flat from Sahil-S İnşaat housing cooperative in 2018 "Four years ago this company started building houses. In the same year, I bought a house there on the basis of a financial certificate from the company's bank, and then it turned out that, apart from me, this house had been sold to two other people. On the basis of what document they had purchased this flat, it is not known."

The citizen says numerous contractors were involved in the construction of the house. "They have also repeatedly made sales in various ways on the basis of financial certificates illegally issued to them. But none of them has been prosecuted."

According to him, the management of the HCC itself has been arrested but he cannot get his money back.

He noted that most of the defrauded persons continue to rent accommodation and most of the salary they receive goes to pay their rent.

The Prosecutor General's Office told Turan that during 2019-2021, the Investigation Department had completed investigations into more than 20 cases related to construction fraud and sent them to court.

It was noted that all appeals are investigated objectively and if reasonable suspicions are identified, intensive investigative actions are carried out to identify and prosecute all perpetrators of the crime.

Real estate and construction expert Elnur Azadov told Turan that in recent years the number of cases of companies selling the same flats to several people has decreased. "These cases were mostly from 2007 to 2018. In 2018, there were small amendments to the Civil Code, construction companies became more official and the heads of companies involved in fraud were arrested.  This has also created some fear."

The expert says there are certain loopholes in the law. "These companies were finding them and signing lucrative contracts."

He said that the "National Action Plan to Strengthen the Fight against Corruption 2022-2026", approved in April, would contain a register of flats sold by construction companies. "This is done to control the corruption system."

Economist Natig Jafarli added that there are serious gaps in the legislation. "There are also cases of abuse of this. Because it is not illegal to sell flats without commissioning the building. Housing societies can sell unfinished flats even when the foundation stone of the house is laid."

According to him, the purchase process is done on a plain piece of paper with their own stamps. "Most citizens are not aware of their rights and think they have bought a flat on the basis of an invalid paper, because according to the law, only flats with a statement can be sold. However, according to the HCC's internal agreements, there is no ban on selling the flats, That's why companies abuse it.

According to the expert, there are two ways out of this situation. "The sale of flats in buildings that are not included in the state register, as in many countries, may be prohibited. In this regard, there is a need for additional amendments made to the legislation. Alternatively, the Ministry of Emergency Situations needs to speed up the process of commissioning buildings. This agency is excessively delaying the process of commissioning buildings. Today, thousands of citizens in Baku live in buildings that have not been commissioned for many years".

The economist pointed out that there is always a government official behind the construction companies in charge of large projects in Azerbaijan. "Without this, unfortunately, it is either impossible or extremely difficult to build a business. We are witnesses to the fact that companies which are opened by businessmen relying on officials or officials in someone's name, feel more comfortable and unpunished."-0-