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UAH 1.5 Million Daily: How Ukrainians Are Robbed in Real Estate Sales

For more than a year, Ukrainians have been spending UAH 1.5 million every day on real estate services from 4 intermediaries. In total, this amount has already reached more than UAH 1 billion.

How did citizens end up paying UAH 1 billion for nothing?

Today, to sell real estate, Ukrainians need to go to an appraiser. It sends a report to the state module which checks it for market price compliance and approves it. However, this report passes through the platforms that simply transmit information. If the appraisal is done correctly, the facility gets into the Unified State Base.

Although citizens only have to pay the appraiser, they still pay for the services of 4 private platforms that do nothing but transfer data. It costs every Ukrainian an extra UAH 1,800. Why are the platforms in this chain unnecessary and redundant? Because the property is valued by a person and checked by a state module. Thus, their efficiency is close to 0.

It should be added that investigative journalists have found out that these four monopoly platforms have one final beneficiary. Therefore, all funds are received by one person rather than the state budget of Ukraine.

How do we break this scheme?

To this end, in early September, a group of MPs from the factions Servant of the People and Voice registered a draft law No. 2047 which abolishes intermediary platforms proposing to register the reports immediately in the Unified Electronic Database. The fee for using it (up to UAH 20) will immediately go to the state budget. At the same time, verification of the appraisal and its approval by the state module will not be abolished.

At the same time, some MPs from the Servant of the People registered an alternative draft law No. 2047-1 which ensures the continuation of the corruption scheme. It enshrines the presence of private electronic platforms which would appraise real estate without the appraisers. According to the experts, the full automation of appraisal is impossible because of the possible features of the real estate put on sale.

On October 16, 2019, the Verkhovna Rada of Ukraine Committee on Anti-Corruption Policy decided that it was the draft law No. 2047 abolishing the platforms that met the requirements of the anti-corruption legislation.

Some of the media and MPs are trying to promote alternative draft law No. 2047-1 using the words “digitization” and facts of manipulation by appraisers. However, some MPs, having realized the risks of this draft law, have already withdrawn their approvals. After all, 4 monopolists receive millions for no reason at all. At the same time, draft law No. 2047 eliminates the corruption enshrined in the law by abolishing electronic platforms that are unnecessary intermediaries having no significant functions. It is this draft law that saves UAH 1,800 every time Ukrainians sell real estate.