Reports suggesting that the introduction of escrow accounts in Uzbekistan will lead to a sharp rise in new housing prices have been refuted.
At a press briefing on June 26th, the Ministry of Construction and Housing and Communal Services clarified details of the new system, which is set to launch on July 1st. Saidnosi Usmamov, head of the ministry’s press service, elaborated on how the escrow system will safeguard homebuyers’ funds.
Understanding the Escrow System
The escrow system introduces a new transaction model between developers and buyers. Under this system, individuals looking to purchase apartments in properties under construction become equity holders, but instead of directly transferring funds to the developer, they deposit the money into a special escrow account at a bank. These funds are held until construction is completed, preventing the developer from accessing them. Developers are then required to complete construction using their own resources or bank loans.
The bank oversees the construction process, manages the funds from equity holders in the escrow account, ensures the security of these funds, and finances the construction project, thereby guaranteeing the timely and quality completion of the project.
How the System Operates
As part of the escrow system, a unified electronic platform called “Shaffof qurilish” (Transparent Construction) will be launched on July 1st, 2025. Developers will not be able to solicit funds from equity holders without registering their projects on this platform.
“This system is designed to minimize human intervention and operates entirely on integrated data. Once a developer registers a project on the platform, the bank will assess their ability to complete the construction within the stipulated timeframe. The progress of construction will be continuously monitored throughout the project. This is the core of the project financing,” Saidnosi Usmamov explained.
Comprehensive information about the developer and the project will be accessible on the platform, including the precise address, number of floors, entrances, project documentation, positive expert assessment, and construction start and end dates. Buyers will also be able to track the progress of construction, verify the developer’s permits, and access information about their past projects.
This will enhance the security of construction investments and promote the establishment of a reliable developer market.
No Price Increase Expected After System Implementation
According to Saidnosi Usmamov, the funds collected in escrow accounts will enable banks to provide financing to developers at lower rates than currently available. Therefore, claims of a sharp increase in new housing prices are unfounded.
“Upon completion of construction and acceptance of the apartment by the buyer, the funds from their bank escrow account are transferred to the developer. If the developer fails to fulfill their obligations, these funds are fully returned to the buyer. This means that if the building is not completed, the buyer loses nothing and can easily recover the funds deposited in the bank,” Saidnosi Usmamov stated.
It is noted that funds in escrow accounts are protected and cannot be blocked, withdrawn, or subjected to compulsory recovery. After concluding the contract and registering the share in the cadastral authorities, individuals can gift, sell, or bequeath their share even before construction is completed.
Participation in the escrow system will be voluntary from July 1st, 2025. From January 1st, 2026, the attraction of funds from citizens for equity participation in construction will be carried out exclusively through escrow accounts.
In summary, the format and content of transactions between developers and buyers in equity construction will change from July 1st, 2025. Until the end of this year, the implementation of the new system will be voluntary, and from January 1st, 2026, the attraction of funds from citizens for participation in construction will be carried out exclusively through escrow accounts. Thus, the process of transferring newly constructed apartments to owners within the established timeframe and protecting the invested funds of citizens will be fully controlled by the new system.