Substantive and Procedural Guidelines in Shared Construction Cases under Resolution No. 26 of the Supreme Court Plenum of the Kyrgyz Republic
Abstract: This article provides an analytical overview of Resolution No. 26 of the Plenum of the Supreme Court of the Kyrgyz Republic dated October 3, 2025 (“the Resolution”), aimed at ensuring uniform application of legislation in the consideration of civil and commercial cases related to participation in the construction of multi-apartment residential buildings. The Plenum of the Supreme Court (“the Court”) comprehensively defined the key elements of the legal regime of the share participation agreements in the construction of multi-apartment residential buildings (“shared construction agreements”), distinguished such agreements from preliminary agreements, and outlined the substantive and procedural features relevant to the adjudication of such disputes.
Substantive Legal Aspects of the Resolution
Definition of a shared construction agreement
The Resolution provides an official interpretation clarifying the legal definition of a shared construction agreement. According to paragraph 1 of the Resolution, under such an agreement, one party — the developer (builder) — undertakes, within the prescribed time frame and using its own efforts and the financial resources of another party (the participant), to construct (create) a multi-apartment residential building or another real estate object and, upon receiving the occupancy permit, to transfer the object to the participant. The participant, in turn, undertakes to pay the contractually agreed price and accept the property into ownership.
Thus, the shared construction agreement constitutes a reciprocal, onerous civil contract that gives rise to obligations to create and transfer a future real estate object into the participant’s ownership.
The Court further clarified that a developer may conclude such agreements only after both the developer and the construction project have been included in the Register of Construction Projects, maintained by the State Agency for Architecture, Construction and Housing and Communal Services under the Cabinet of Ministers of the Kyrgyz Republic (“the Register”).
Essential terms of a shared construction agreement
The Resolution directly lists 15 named essential terms that a shared construction agreement must contain. These conditions include among others:
- information about the construction project (address, room number, area, characteristics, finishing features);
- the cost and payment schedule for the participant;
- the developer's bank details; the deadlines for fulfilling obligations and commissioning the project;
- the rights and obligations of the parties;
- the procedure for accepting and transferring the project;
- grounds and procedure for termination of the contract;
- the developer's obligation to transfer ownership of the property to the participant;
- the parties' liability for improper performance of obligations and the procedure for compensation for losses, as well as force majeure circumstances;
at the same time, the parties may include other conditions in accordance with the legislation of Kyrgyzstan.
Form of the shared construction agreement
The Court emphasizes that a shared construction agreement must be concluded in written form, notarized, and registered with the authorized state body responsible for the registration of rights to immovable property and transactions therewith.
Parties to the shared construction agreement
The Court establishes the definition of the parties to a shared construction agreement, namely the customer (developer) and the participant. Thus, the developer is recognized as one or more legal entities or individual entrepreneurs included in the Register, who have the right to attract funds from shareholders before the facility is put into operation. The developer must have permits to carry out construction work within the boundaries of the relevant land plot, as well as comply with the requirements of legislation and subordinate acts, including the availability of a general contractor's license and financial guarantees ensuring the completion of construction. In addition to this definition, customers (developers) who have the right to attract funds from participants in shared construction are subject to additional requirements (in particular, the availability of a charter or memorandum of association, a certificate of state registration of a legal entity, as well as the availability of own funds formed in the authorized capital and not subject to reduction until the facility is put into operation).
Meanwhile, a shareholder is a natural or legal person who has entered into a s shared construction agreement with a developer for the purpose of acquiring ownership of a specific object (or a share in it) by contributing their own funds before the object is put into operation. Separately, the Plenum of the Supreme Court clarified that the owner or user of a land plot provided for construction is a shareholder along with other participants if their contribution is expressed in the transfer of the land plot. At the same time, in the event of the developer's bankruptcy, such a shareholder does not acquire ownership of the unfinished facility.
Features of the legal regime of an unfinished construction project
The Court confirmed that, pursuant to Article 252 of the Civil Code of the Kyrgyz Republic (“CC KR”), an unfinished construction project has the legal regime of real estate with all the ensuing legal consequences.
At the same time, if the construction of a multi-apartment residential building is not completed due to the fault of the developer, the participants are granted the right to:
- declare the developer as bankrupt, and
- register the shared construction project as an unfinished construction project with the authorized state body.
The Court also pointed out that in the event of bankruptcy or liquidation of the developer, the participants, as participants in shared ownership, have the right to engage another person with the appropriate license and permits to complete the construction. This establishes a mechanism for completing the construction, allowing the participants to preserve their investments and complete the project without losing their rights to their share.
Preliminary Agreement vs. Shared Construction Agreement
The Court clarified that, in accordance with Article 382 of the CC KR, a developer has the right to attract funds from citizens and legal entities for the construction of a project on the basis of various agreements, including a preliminary agreement. At the same time, the key difference between a preliminary agreement and a shared construction agreement lies in the nature of the developer's main obligation. Under a preliminary agreement, the developer undertakes to conclude the main agreement in the future, rather than to build and transfer the property. Such an agreement is not subject to state registration and is concluded in the same form as the main agreement. If the term for concluding the main agreement is not specified, it must be signed within one year from the date of conclusion of the preliminary agreement (Article 388 of the CC KR).
Unlike a preliminary agreement, a shared construction agreement establishes the developer's obligation to build and transfer the property (apartment) to the participant. This agreement is subject to mandatory state registration, and any changes or additions to it are also registered with the authorized body for the registration of rights to real estate. The Court emphasized that if bankruptcy proceedings are initiated against the developer, the property that is the subject of the registered shared construction agreement is not included in the bankruptcy estate, which provides additional protection for the rights of the participant.
At the same time, the Court indicated that if the preliminary agreement actually contains terms characteristic of a shared construction agreement, such as the start and completion dates of construction, a payment schedule, or the developer's lack of rights to the real estate object, then such an agreement is subject to qualification as a shared construction agreement and, therefore, must be registered in accordance with the established procedure. In doing so, the Сourt established criteria that exclude the possibility of circumventing the legislation on shared construction by concluding fictitious preliminary agreements.
Procedural Legal Aspects of the Resolution
Jurisdiction of disputes
In accordance with Part 1 of Article 32 of the Civil Procedure Code of the Kyrgyz Republic, claims arising from shared construction agreement are considered at the location of the shared construction project. The Court rightly pointed out that such disputes fall under the category of cases concerning rights to real estate, since the object of the legal relationship is a building or structure permanently attached to the land. In addition, when considering cases on the recognition of ownership rights, the registering authority, as well as the architecture and construction authorities, should be involved as third parties whose rights and obligations may be affected by the judicial act.
Termination of a shared construction agreement
The Court indicated that failure to perform or improper performance of obligations under a shared construction agreement does not entail its unilateral termination. Termination of obligations is permitted only by a court decision, since the purpose of this agreement is to build a multi-apartment residential building using funds raised from shareholders. This approach ensures judicial control over the sustainability of construction projects and protects the interests of all participants in shared construction. At the same time, a shared construction agreement may be declared invalid on the general grounds provided for in Articles 183-184 of the CC KR.
The liability of the party that violated the shared construction agreement must be determined by the agreement itself and may take the form of a penalty (fine, penalty interest), as well as compensation for losses in full. Such penalties are enforced upon completion of the construction of the facility. In addition, when resolving disputes related to the non-fulfillment of obligations by a participant, the court must establish whether the facility was recognized as problematic in accordance with paragraph 16 of the Regulation on the procedure for attracting funds from citizens and legal entities to the construction of apartment buildings (Decision of the Cabinet of Ministers of the Kyrgyz Republic No. 614 of November 21, 2023).
Interim Measures
The Court clarified that when considering disputes, courts have the right to apply measures to secure a claim in order to protect the rights and legitimate interests of participants in shared construction, aimed at preventing alienation, resale, or other disposal of objects before the dispute is resolved on its merits, such measures must be proportionate to the claims made and must not impede the completion of construction, so as not to create a threat of delaying the commissioning of the building or infringing on the rights of other bona fide participants in shared construction.
Court Fee
An important innovation was the clarification of the procedure for collecting court fee. The Court clarified that claims related to the conclusion and content of shared construction agreements are non-property claims, and court fee on them is levied at seven times the calculated indicator. If the claim combines property and non-property claims, the fee is paid separately for each. In addition, it is explicitly stated that the Law “On Protection of Consumer Rights” does not apply to these relations, since a participant is not a consumer in the classical sense, which excludes benefits in the payment of state fees.
Conclusion: The Resolution provides a comprehensive explanation of the legal regime for shared construction agreement in the construction of multi-apartment residential buildings, combining substantive and procedural legal aspects. Particular attention is paid to protecting the interests of participant in the event of bankruptcy or liquidation of the developer, preserving ownership rights to the share, and the possibility of completing construction by third parties with the appropriate permits. From the point of view of procedural law, the Court established the jurisdiction of disputes at the location of the object, the procedure for terminating the contract exclusively by a court decision, the application of measures to secure the claim in compliance with the principle of proportionality, and also clarified the procedure for collecting court fees.
The text of the Resolution No. 26 of the Plenum of the Supreme Court of the Kyrgyz Republic dated October 3, 2025, is available at the following link (https://admin-sot.sot.kg/public/sites/4/2025/10/3.-Post.-po-dolev.pdf).
Authors:
Aisanat Safarbek kyzy, Partner
Aibek Shamurzaev, Associate
