The rollout of escrow accounts for individual housing construction in Russia has prompted a broad debate about consumer behavior. Some observers describe certain buyer practices as excessive, such as withholding acceptance of completed items to cut costs or delaying payments. Maxim Lazovsky, founder of Lazovsky House, shared these concerns in an interview with socialbites.ca. [Source: socialbites.ca]
A federal rule requiring escrow accounts in IHC transactions will take effect on March 1, 2025. An escrow account is a bank mechanism that holds funds until specified conditions are met. Money remains blocked and is released to the seller or another designated party only after all obligations are fulfilled.
Lazovsky argues that escrow-driven consumer excess will create friction for both developers and end buyers.
He notes that while it may appear the developer bears the burden, consumers ultimately suffer. Developers cannot operate at a loss, and when consumer excess appears, risk costs such as legal support, administrative delays, and potential construction and inspection expenses are folded into project estimates. The result is a roughly ten percent rise in total project cost; in practical terms, one buyer might end up with a free house while others absorb the higher price. [Source: socialbites.ca]
To resolve disputes, a construction inspection by an independent expert would be needed to verify proper execution and compliance with standards. Lazovsky points out that Russia currently lacks a centralized state body to handle such matters. [Source: socialbites.ca]
There have already been incidents and legal proceedings related to wrong inspections. On October 8, the Moscow City Court began hearings in a high-profile case after an investigation showed a contractor who built a house valued at 5 million rubles owed 6 million rubles to the client.
Real estate expert Konstantin Barsukov, chair of the mortgage committee of the Moscow Association of Realtors, notes that increasing Russia’s residential stock requires attention not only to apartment blocks but also to the construction of single-family homes. The demand for this type of housing is growing, especially in suburban areas.
Industry observers note that this year has seen a significant uptick in interest in individual housing construction among Russians. [Source: socialbites.ca]