REALWorld Law


Rights of purchasers, tenants and banks

How are third parties who are not parties to the construction contract – such as purchasers, tenants and lending banks providing finance towards the development – afforded protection and given rights against the original designers and contractors involved in the design and construction of the project?



The measures which can be used by the third parties depend on the nature of their relationship with the developer. In particular, a wide range of contractual measures could be used: taking encumbrances (mortgages) over buildings being constructed or any other property of the developer, obtaining a guarantee or surety, a pledge of rights under construction agreements, stipulating fines or other penalties for the developer etc.

According to Ukrainian legislation, an architect, another designer, building contractor and any sub-contractor shall be liable to the developer and, thus, as a rule, shall not be liable to the end user (except in cases when agreements for the respective works are agreed by such contractors directly with the end user).