Consumer Extremism in Construction: How a Wave of Lawsuits Is Reshaping the Market

The New Reality for Developers

According to judicial statistics, 24,300 lawsuits related to shared construction financing were filed in Russia in 2022 (compared to 13,300 in 2021). In 2023, this figure surged nearly ninefold to 211,400 cases, with awarded claims totaling 128.1 billion rubles. In Moscow alone, more than 1,700 cases were heard in just the first ten months of 2024, resulting in 881.3 million rubles awarded to equity holders—with courts siding with consumers in 74% of cases. According toKomsomolskaya Pravda, over 120,000 lawsuits were filed in Moscow and the Moscow region alone between 2022 and 2024—affecting up to 55% of new apartment transactions. Total awarded damages exceeded 74 billion rubles, while the volume of unbuilt housing reached approximately 7 million square meters, translating into tax losses of around 15 billion rubles.

The surge in lawsuits can be explained by several factors. On one hand, citizens themselves have become more attentive to the quality of new construction and are more actively using legal mechanisms for protection. On the other, entire legal firms and consultants have emerged in the market, professionally managing inspections and lawsuits against developers. Their goal is to extract penalty payments from developers. As a result, even minor defects can escalate into large-scale legal proceedings. For developers, this means rising direct costs, additional strain on reserves, and the risk of slower housing delivery rates, as well as reputational damage, since negative stories spread quickly through media and social networks. Moreover, developers may potentially build these "unplanned" expenses into future apartment sales, even though prices have already increased 2.6-fold since 2015, while average apartment size has shrunk by 14% to 48.8 square meters (according toERZ.RF).

Where's the Line Between Extremism and Legitimate Complaints?

The key question for authorities is how to identify that very "line" where a developer is genuinely at fault for delivering substandard housing versus where an equity holder is simply looking to collect penalty payments. Anton Glushkov, president of the National Association of Builders (NOSTROY), told Argument that the current term "consumer extremism" isn't quite accurate. "I would call this phenomenon 'abuse of rights.' This is a systemic problem rooted in conflicting legal norms that allow unscrupulous participants to interpret the law in their favor. The key solution is not toughening measures against consumers, but improving the legislation," Glushkov emphasized.

State Duma deputy Alexander Yakubovsky, meanwhile,believesthat the spike in litigation is connected not only to citizens' vigilance, but also to the dominance of intermediaries who have turned claims work into a business and are filing lawsuits en masse on behalf of equity holders.