Analysis of the impact of the implementation of escrow accounts in project financing

Guslyakov Matvey Sergeevich, Okhotnikov Ilya Viktorovich, Sibirko Ivan Vladimirovich

The economy in Russia is highly volatile and unstable. Instability manifests itself as a consequence of various kinds of crisis phenomena, sanctions, changes in legislation and, as a consequence, the outflow of investment capital. All these factors negatively affect the country's economy. The real estate development sector is at the very center of events, since development directly depends on all economically significant events, both political, legal and economic. Development in Russia has a number of its own characteristics, despite the fact that this direction was borrowed and built on the basis of foreign practice. Unfortunately, the current development conditions show the predominant development of residential real estate. Real estate development in itself is very risky, as it has a very long investment turnover cycle and does not provide an opportunity to maneuver in the event of a mistake made at any of the stages. None of the lines of business, activity can fully protect itself from risk. Even a seemingly perfect banking system with a huge number of professionals and multi-level verification of investment projects is no less exposed to risks. As for the Developer, it is possible to find the line between efficiency and risk at each stage of a project's life. There are already many solutions for this and the ability to modify them. Due to the recent amendments to 214-FZ (Federal law) “Participation in the shared construction of apartment buildings and other property” and the complete transition to financing using escrow accounts, the problems and specifics of real estate financing are more relevant than ever, as well as their impact.

Keywords:escrow account, development, equity participation agreement, project financing.