Common mistakes when submitting an application |

Common mistakes when submitting an application

1. Constitutional Documents

List of Documents with Frequently Identified Deficiencies

Common mistakes made by the Developer or the Authorized Company when applying for a construction completion guarantee:

Constitutional documents of the Developer and the Authorized Company (notarially certified copies of the Charter and the Foundation Agreement / Decision of the Sole Founder on the incorporation of the company).

1. Copies of the Charter and the Foundation Agreement, including any amendments and supplements thereto, must be up-to-date and compliant with the current legislation, resolutions of the authorized bodies of the legal entities, and records of all registration actions of the legal entity; furthermore, they must be notarially certified

2. Documents confirming the Authorized Company's compliance with the requirements stipulated in Clause 3, Article 8 of the Law:

List of Documents with Frequently Identified Deficiencies		Common Errors Committed by the Developer or the Authorized Company when Submitting an Application for a Construction Completion Guarantee
1) Sale and purchase agreement (of exchange, deed of gift, or any other transaction involving the alienation of a land plot), or a court ruling recognizing the right of private ownership of a land plot, the right of land use, or other real rights to land (notarized copy);		Identification characteristics (information regarding the land plot, including the address, address registration code (if any), cadastral number, form of ownership, number of components, land category, divisibility, and intended use) specified in the sale and purchase agreement (exchange, deed of gift, or any other transaction involving the alienation of a land plot), or in a court ruling recognizing the right of private ownership of the land plot, the right of land use, and other real rights to land, in the Land Title Act for the right of private ownership of the land plot (or the act for the right of temporary (reimbursable) land use), and in the Certificate of Registered Rights (Encumbrances) on Real Estate and its Technical Characteristics (Form-2) must be identical. Title-establishing and identification documents (the Land Title Act for the right of private ownership or the act for the right of temporary (reimbursable) land use) for the land plot must be notarized. The Certificate of Registered Rights (Encumbrances) on Real Estate and its Technical Characteristics must be up-to-date at the time of application submission. In the event that payment was not completed at the time of the reimbursable transaction for the acquisition of the land plot, documents confirming such payment must be provided. The land plot must be free from any encumbrances, rights, or claims of third parties.
2) Land Title Act for the right of private ownership of a land plot or for the right of temporary (reimbursable) land use (notarized copy), or a cadastral passport of the real estate property (electronic document);
3) Certificate of Registered Rights (Encumbrances) on Real Estate and its Technical Characteristics (obtained via the "Electronic Government" portal);
4) Copies of Certificates of Acceptance of completed construction projects, specifying the total square meters commissioned, confirming the developer's experience in the construction of multi-apartment residential buildings and (or) individual residential complexes, including those completed under government procurement contracts.		The submitted documents must confirm the developer's experience in the implementation of construction projects for multi-apartment residential buildings and (or) individual residential complexes, including experience acting as a Customer (Employer), Contractor, or General Contractor. When implementing construction projects for multi-apartment residential buildings (including low-rise construction projects), the developer is required to have at least 2 years of experience in completed multi-apartment residential construction projects as a Customer, Contractor, or General Contractor, with a total area of no less than 10,000 m² for construction in cities of republican significance and the capital, and no less than 5,000 m² for construction in other administrative-territorial units. When implementing construction projects for individual residential complexes, the developer is required to have at least 2 years of experience in completed projects for multi-apartment residential buildings and (or) individual residential complexes as a Customer, Contractor, or General Contractor, with a total area of no less than 10,000 m² for construction in cities of republican significance and the capital, and no less than 5,000 m² for construction in other administrative-territorial units. In the event of a discrepancy in the developer's name within the submitted documents, information from the registering authority of the National Register of Business Identification Numbers regarding previous names of the developer and the completion of the corresponding state re-registration must be provided.
5) A copy of the agreement concluded between the authorized company and the contractor (general contractor), including an approved construction and installation works schedule (plan of production);		The general construction contract must be drafted in accordance with the provisions of civil legislation and must contain accurate project information, specifically: The project title must correspond to the expert opinion (expert evaluation report); The bank accounts of the authorized company and the contractor (general contractor) must be held exclusively within the same second-tier bank; The project implementation period must correspond to the notice of commencement of construction and installation works, the standard construction timeframe stipulated in the expert opinion on the design and estimate documentation (DED), the application, and the work production schedule. If the party to the construction contract is an Authorized Company that is a member of a Special Economic Zone (SEZ), the application must be supplemented with information regarding the volume of materials and/or equipment being purchased, as well as the sources of funding for such acquisitions.

3. Documents provided by the developer/authorized company for the legal due diligence (legal assessment) provided for in subparagraph 1) of paragraph 4 of Article 33 of the Law:

List of documents for which frequent deficiencies (comments) are identified

Common mistakes made by the Developer or the Authorized Company when submitting an application for obtaining guarantees for the completion of construction.

1) Certificate of State Registration (Re-registration) of a Legal Entity (obtained via the "Electronic Government" portal);

2) Certificate of All Registration Actions of a Legal Entity (obtained via the "Electronic Government" portal);

The Certificate of State Registration/Re-registration of a Legal Entity and the Certificate of All Registration Actions of a Legal Entity must be up-to-date at the time of application submission.

4. Documents provided by the developer/authorized company for the legal due diligence (legal assessment) provided for in subparagraph 2) of paragraph 4 of Article 33 of the Law:

List of documents for which frequent deficiencies (comments) are identified		Common mistakes made by the Developer or the Authorized Company when submitting an application for obtaining guarantees for the completion of construction.
1) Copies of resolutions of the Developer’s authorized body on the transfer to the Single Operator of voting shares (participatory interests in the authorized capital) of the Authorized Company into trust management, as well as on pledging 100% of the voting shares (participatory interests in the authorized capital) of the Authorized Company (copies certified by the Developer’s seal, if available).		The resolutions must be prepared in accordance with the requirements of civil legislation, be consistent with information on all registration actions of the legal entity, and clearly reflect the decisions adopted. In case of any discrepancy in the name of the Developer or the Authorized Company in the submitted resolutions, it is necessary to provide information from the registration authority, namely an extract from the National Register of Business Identification Numbers, confirming the previous names of the Developer and the corresponding state re-registration.
2) A copy of the resolution of the Authorized Company’s authorized body on pledging to the Single Operator the land plot and/or land use rights with unfinished construction (if any), including its detailed description (certified by the Authorized Company’s seal, if available)).		The resolution must be prepared in accordance with the requirements of civil legislation. The resolution of the Developer’s authorized body (certified by the Developer’s seal, if available) must clearly state the intention to pledge to the Single Operator the land plot and/or land use rights with unfinished construction (if any), specify the identification characteristics of the land plot being pledged, and indicate the name of the project under which the property is being pledged.
3) A copy of the resolution of the Authorized Company’s authorized body on pledging to the Company the land plot and/or land use rights with unfinished construction (if any), including its detailed description (certified by the Authorized Company’s seal, if available).		The resolution must be prepared in accordance with the requirements of civil legislation. The resolution of the Authorized Company’s authorized body (certified by the seals of the Developer and the Authorized Company, if available) must clearly state the intention to pledge to the Company the land plot and/or land use rights with unfinished construction (if any), specify the identification characteristics of the land plot being pledged, and indicate the name of the project under which the property is being pledged.

5. Documents provided by the developer / authorized company for the financial assessment stipulated by paragraph 1 of Article 8 of the Law, as well as paragraph 3 of Article 33 of the Law:"

List of documents for which frequent deficiencies (comments) are identified		Common mistakes made by the Developer or the Authorized Company when submitting an application for obtaining guarantees for the completion of construction.
1) Financial statements confirmed by an audit report for the last two financial years.		Annual audited and management financial statements must be provided, dated no more than 4 months prior to the application submission date. The audit report on the developer's financial position must cover 2 (two) full financial years preceding the application date. The audit report must be stamped by the developer company and the auditor, signed by the developer's chief executive and accountant (if applicable), as well as by the staff of the audit firm that conducted the audit. Breakdowns must be provided for ALL line items of the Balance Sheet, Income Statement (P&L), Cash Flow Statement (CFS), Statement of Changes in Equity — both for the management financial statements and for the two years of audited reports. Breakdowns must contain detailed information on all line items of the main reporting forms: Balance Sheet — date of origination and expected settlement date of each asset/liability, detailed comments on the nature of origination (e.g., accounts receivable/payable — origination date, expected repayment date, the contract under which it arose, the project it relates to). P&L — breakdown of revenues by business line / project / counterparty, and expenses by homogeneous groups. CFS — breakdown of line items by counterparty. Explanatory notes must be provided where financial statement figures differ from prior periods, or where adjustments or distributions of retained earnings have been made. If the developer company is part of a group of companies and/or income is generated through dividends, or the developer acts as a co-borrower/guarantor for third-party obligations — financial data for the entire group of companies / companies affecting the developer's financial stability must be provided, in accordance with the above requirements.
2) Documents provided for calculating the debt-to-equity ratio, which must not exceed seven throughout the entire construction period of the multi-apartment residential building until its commissioning.		The Credit Bureau (PCB) reports must be dated no more than 5 calendar days prior to the application submission date. When calculating the debt-to-equity ratio (pursuant to subparagraph 3, paragraph 1, Article 8 of the Law of the Republic of Kazakhstan "On Residential Construction Equity Participation"), it must be noted that borrowed capital refers to all financial liabilities reflected on the developer's Balance Sheet that were raised on terms of repayment and maturity.
3) Documents provided for the analysis of project financing sources.		If the authorized company uses funds held in a current bank account to confirm the requirement under subparagraph 3), paragraph 3, Article 8 (own equity participation — 10%/15%), the sources of those funds must be specified: borrowed capital / financial assistance (indicating the counterparty that provided the funds and the terms) or own funds. If the funds originate from third-party borrowed capital (other than from the developer company itself), financial statements of the related company must be provided in accordance with the requirements described above.

6. Documents confirming the authorized company's compliance with the requirements stipulated by paragraph 3 of Article 8 of the Law in the context of the technical assessment of the project:

List of documents for which frequent deficiencies (comments) are identified		Common mistakes made by the Developer or the Authorized Company when submitting an application for obtaining guarantees for the completion of construction.
6.1 To confirm the scope and quality of construction and installation works completed, the authorized company must provide copies of the following documents (subparagraph 3), paragraph 3, Annex 2 of the Rules for reviewing documents on multi-apartment residential construction projects for concluding a guarantee agreement, approved by Order of the Minister of National Economy of the Republic of Kazakhstan dated September 30, 2016 No. 432):
1) Acceptance slip for the notification of commencement of construction and installation works		The acceptance slip must be accompanied by the notification of commencement of construction and installation works. Documents must be issued by the authorized authority, generated on the portal www.elicense.kz, contain the project name corresponding to the declared project, and the indicated timeframes must comply with the regulatory construction period.
2) Mothballing of the unfinished construction object (if applicable)		In the event of a temporary suspension of construction, all supporting documents must be provided confirming the measures taken to preserve the safety and quality characteristics of structures, materials, and equipment of the unfinished construction object during the period of temporary suspension: mothballing acts indicating the timeframes, inventories of unfinished construction with the relevant stamps and signatures of the parties involved in the mothballing of the object.
3) Architectural supervision agreement		The agreement must contain information on the services provided for the declared project; the contract amount must not exceed that provided for in the design and estimate documentation; architectural supervision must be performed by the design company that prepared the design and estimate documentation; in the event of a change of architectural supervisor, a document delegating rights from the design organization must be provided.
4) Technical supervision agreement		The agreement must contain information on the services provided for the declared project; the contract amount must not exceed that provided for in the design and estimate documentation.
5) Original report or conclusion of the engineering company on the technical inspection of the project regarding the structural reliability and stability of buildings and engineering communication systems		In the case of construction already commenced, a technical inspection report must be provided describing the structural reliability and stability of buildings and engineering communication systems, carried out by an accredited organization. Supporting cost documents directly related to the declared project must be attached to the conclusion (work completion certificates, payment orders) with stamps and signatures of the client, contractor, architectural and technical supervisors (corresponding to the concluded agreements). Costs for construction and installation works, design and estimate documentation development, expert review, architectural and technical supervision services must comply with the design and estimate documentation: must not exceed the amounts stipulated therein and must correspond to the current state of the object. Material procurement costs may only be reflected for projects located within a special economic zone. A consent letter from the developer and the authorized company must also be provided, authorizing the technical inspection of the project regarding structural reliability, building stability, engineering communication systems, and the assessment of unfinished construction by representatives of the Single Operator.
6.2 Design, estimate, and permitting documentation for the project (subparagraphs 4), 5) and 7), paragraph 3, Annex 2 of the Rules for reviewing documents on multi-apartment residential construction projects for concluding a guarantee agreement, approved by Order of the Minister of National Economy of the Republic of Kazakhstan dated September 30, 2016 No. 432):
1) Design and estimate documentation with the conclusion of the comprehensive non-departmental expert review		Full design and estimate documentation must be provided (in electronic format as PDF) with a positive conclusion of the comprehensive non-departmental expert review, or a permission letter from the rights holder and project author to obtain the design and estimate documentation for the declared project from the RSE "Gosexpertiza" (where the project has undergone state comprehensive non-departmental expert review). If the design and estimate documentation was commissioned by another organization (including where the comprehensive non-departmental expert review conclusion was issued to another organization), relevant documents confirming the authorized company's ownership rights to the design and estimate documentation with the expert review conclusion must be provided (acceptance-transfer act, agreement). The comprehensive non-departmental expert review conclusion must be valid (validity period: no more than 3 years, if construction and installation works have not yet commenced). The consolidated estimate calculation of the estimate section must also separately identify costs for construction and installation works, architectural and technical supervision for the residential portion, parking spaces, and commercial premises, where applicable.
2) Design permitting documents		The following design permitting documents must be provided: copies of the design resolution, architectural and planning assignment, stakeout plan, and land plot selection act. A document confirming approval of the schematic design, issued by the authorized authority and generated on the portal www.elicense.kz, must also be provided.
3) Technical specifications		Technical specifications for the connection of all engineering networks must be provided (heating networks, electrical networks, gas supply, water supply, sewage). Technical specifications must be valid, issued by the relevant utility services, issued to the authorized company / developer, or documents confirming the transfer of technical specifications to the authorized company / developer must be provided. A letter confirming the availability of trunk networks must also be provided.
4) Construction and installation works agreement		An agreement concluded between the authorized company and the contractor (general contractor) must be provided, with an approved construction and installation works production schedule, accompanied by copies of documents confirming the signatory's authority to execute the construction contract (resolution of the authorized body / order on appointment of the chief executive), as well as a copy of their identity document. The contract amount must not exceed the estimated cost; the agreement must contain information on work completion timeframes corresponding to the regulatory construction period; the contractor (general contractor) must hold the relevant license. The approved construction and installation works production schedule must include all types of works in accordance with the design and estimate documentation, comply with regulatory construction periods and work commencement dates as per the issued slip for commencement of construction and installation works.
6.3 Project construction financing plan (paragraph 5, Annex 2 of the Rules for reviewing documents on multi-apartment residential construction projects for concluding a guarantee agreement, approved by Order of the Minister of National Economy of the Republic of Kazakhstan dated September 30, 2016 No. 432):
1) Project cost plan and construction financing schedule		The construction project financing plan must be signed by the chief executives of the developer and the authorized company, stamped with their seals, and also provided in electronic format (xls/xlsx/xlsm). The financing plan must include types of works in accordance with the design and estimate documentation; work costs must correspond to the estimate documentation. The financing plan must include other costs: design and survey works, expert review costs, architectural and technical supervision. The financing plan must comply with regulatory construction periods; the financing start date must correspond to the guarantee issuance period; the completion timeframes for the specified types of works must correspond to the approved construction and installation works production schedule attached to the construction contract. The financing plan must contain information on costs incurred for unfinished construction, as well as payment of other costs and residual value for concluding the guarantee agreement (where construction has already commenced).
2) Sales and lease plan for premises in the multi-apartment residential building		The sales plan must contain information on apartments, commercial premises, and parking spaces, indicating areas and the sale price per 1 sq.m. Information on apartments, parking spaces, and commercial premises must strictly correspond to the design and estimate documentation. The sales plan must comply with regulatory construction periods. The sales schedule must cover the construction costs of the object (including own equity participation).