Unfinished construction object and special property right: remedies for the protection of rights and grounds for their distinction

It is indicated that new residential, commercial and industrial construction is not only the engine of development of most sectors of the domestic economy, but also a powerful factor in social stability and improvement of housing conditions for the population. The article examines the legal status of unfinished construction objects, the special property right to an unfinished construction object, and the future real estate object in the context of protecting investors’ rights and selecting appropriate and effective legal remedies. It is stated that in cases where a developer violates the conditions and requirements of the investment-construction process or fails to comply with the legal and contractual provisions regarding the attraction of funds for future construction, the investor’s judicial protection in securing the final investment object becomes extremely problematic. The article concludes that, in order to ensure potential protection of their rights, investors’ funds for future construction should be attracted through one of the following mechanisms: entering into agreements for the sale of indivisible unfinished construction objects or future real estate (shares in such objects); participation agreements in construction financing funds; or the issuance of target corporate bonds repayable through the transfer of a residential construction object. An analysis of scholarly sources highlights the legal inaccuracy of the statutory definition of the special property right, its legal nature, and the application of ownership protection rules to it. The article distinguishes between obligatory and proprietary remedies for protecting investors’ rights, noting that obligatory remedies are applicable during the construction phase, while proprietary remedies apply after construction is completed and the object is commissioned. Upon completion and commissioning of the object, the appropriate proprietary remedies include claims for recognition of property rights to the construction object and vindication claims for its recovery.