LAW OF MONGOLIA

February 5, 2016, Ulaanbaatar city

Law on Construction /Revised/

CHAPTER ONE

GENERAL PROVISIONS

1 Article.Purpose of the law

1.1.The purpose of this law is to regulate the matters relating to the construction operation, production of construction /building materials, performance of construction work, and supervision and commissioning thereof.

2 Article.Legislation on construction

2.1.Legislation on construction consists of the Constitution of Mongolia, the Civil code, Land law, Law on urban development, Law on the labour safety and health, this law, and other legislative acts adopted in conformity therewith.

2.2.Should an international treaty to which Mongolia is a party provide otherwise, provisions of the international treaty shall prevail.

2.3.Other relations with respect to construction activities not regulated under this law shall be regulated by the relevant sector laws.

3 Article.The guiding principles of public services in the construction sector

3.1.The following principles shall be adhered to provide public services in the construction sector:

3.1.1.ensure that the regulation, registration and licensing of construction operation are transparent, open and efficient for the public;

3.1.2.ensure equality and independence of participants in the construction business.

4 Article.Definition of legal terminology

4.1.The following terms used in this law shall be interpreted as follows:

4.1.1."Buildings" means facilities such as apartment, civil, plants, energy, communications, roads, bridges, water, oil construction, water supply, dams, including its engineering system;

/This part was revised by the law of 12 May 2017/

4.1.2."Certificate of building commission" means a document issued by competent authorities certifying that the building has been completed for construction;

4.1.3."Period of improvement and adjustment of building for operation" means that the time when the client, contractors, designers, consultants, and other construction business entities are responsible to ensure smooth operation of building design, structure, materials, equipment, water and wastewater, steam, gas, heating, electricity and communications after the building has been commissioned and certificate has been issued;

4.1.4."Construction documents" mean technical conditions, design drawings, concealed and non-concealed work acts, site journal, and other relevant documents developed and certified in accordance with the provisions of this law, which are required to issue construction permit and carry out construction work;

4.1.5."Repair and equip the buildings" means complete or partial repair of buildings with the purpose of improving its smooth use and installation of additional and special equipment;

4.1.6."Expert to certify the design of buildings" means an citizen or legal entity to provide independent and professional assessment of the design of buildings;

4.1.7."Expansion and renovate of buildings" means modification, expansion and renovate of basic structure and utilities system by increasing dimension of the building;

4.1.8."Technical condition of buildings" means a decision made by an authorized legal entity to connect buildings to heating, steam, gas, drinking and waste water supply, electricity, communications, and alarm;

4.1.9."Procedures for building protection" means protection of building components from damages and ensuring building quality and safety as well as continuation of construction work during the time construction work is suspended;

4.1.10."New construction of buildings" means construction of buildings or demolishing old buildings to build new ones;

4.1.11."Construction work" means preparation of all types of construction work sites, assembly of components, re-building, dismantling, repair work, equipment installation;

4.1.12."Contractor" means a legal entity authorized to perform construction work under an agreement made with the client;

4.1.13."Construction client" means an citizen, legal person and their agent interested in contracting out construction work;

4.1.14."Construction site" means a plot of land where construction work is undergoing;

4.1.15."Permit to commence or continue construction work" (hereinafter referred to as "construction work permit") means a decision by competent authorities permitting performance of construction work as stated in this law;

4.1.16."Construction design drawing review/certification" means independent and autonomous professional activity to certify/assess whether building design, technology, selection of lifting mechanisms, urban and architecture planning, basic structural integrity solution meets regulatory documents' requirements and ensures consumer safety;

4.1.17."Construction materials" mean minerals, raw materials, structures, products and articles used in buildings that meet standards, health and ecological requirements;

4.1.18."Regulatory documents for buildings" mean mandatory or optional regulatory documents, rules, technical regulations, instructions, guidelines, methodologies and standards that contain technical requirements for buildings;

4.1.19."State technical inspection of buildings" means activity implemented by regulatory authority in order to verify if the construction process complies with laws;

4.1.20."Construction process" means development of construction design and documents, assurance, contracting, supervision of stages, safety and quality testing, commissioning and certification;

4.1.21."Construction license" means right granted by competent authority in the construction industry stated in Article 15.14 of the Licensing Law;

4.1.22."Construction investor" means an citizen or legal entity who provides funds required to build buildings;

4.1.23."Independent source and piping/utilities" mean utilities such as water, heating, steam, gas, electricity, communications provided to meet needs of the building.

4.1.24."Demolition work" means complete or partial demolition of buildings found by competent authority to have failed occupancy requirements and have been built in breach of laws and requirements of regulatory documents;

4.1.25."Landscaping work" means construction of green space outside buildings, roads, parking lot, pavement, crosswalk, recreational area for residents, playground, small architectural design/form, and lighting;

4.1.26."As-built drawing" means a shop drawing that has been modified by a designer of the approved design drawing and approved by a competent authority;

4.1.27."Model drawing" means a document that sets forth general localized building layout, surrounding overview, space planning, facade, color solution and planning;

4.1.28."Renovation" means repair of buildings without modifying basic building design and structure, replacement of worn or damaged equipment with the purpose of extending the life without compromising the technical specifications of water, wastewater, steam, gas, heating, electricity and mechanic equipment installed therein;

4.1.29."Consulting services" mean professional services provided based on qualifications, special knowledge and skills required for construction work performance, regulatory documents development, construction material production technology selection, and determination of mechanic-automation, configuration, adjustment, and quality and safety level and status;

4.1.30."Design drawing" means a set of documents such as model drawing required to plan buildings and perform construction work, original model drawing /blueprint/, feasibility study, technical and working drawings, construction site and production coordination draft, engineering survey, geological and geodetic mapping, technical estimates; and cost budget;

4.1.31."Designer" means a legal entity authorized to develop building designs;

4.1.32."Designer's supervision" means oversight by the author to check whether it is being built as per construction drawings and regulatory documents;

4.1.33."Engineering infrastructure" means facilities including roads, railway, suspension roads, roads above or underground, all types of utilities, ordinary or engineering structures to prevent disasters and accidents;

4.1.34."Engineering survey" means professional activities to find out feasibility of engineering geology, geotechnics, hydrogeology, earthquake, environmental and weather conditions, landscape, architectural planning, amenities, infrastructure, and provision of utilities system of that particular site before undergoing construction work;

4.1.35."Utilities/pipeline system" means central facilities including water supply, electricity, sewerage, treatment plant, oil and various gas pipelines, and wireless communications;

4.1.36."Lifting mechanism" means fixed and mobile equipment designed to lift or transport people and goods vertically or horizontally;

4.1.37."Decentralized utilities system" means a facility designed to provide water, heat, steam, gas, electricity, communications services to a certain area or building;

4.1.38."Centralized utilities system" means a primary facility to connect urban areas and buildings located in a certain urban area to central source of water, heat, steam, gas, electricity, and communications;

4.1.39."Complexity" means status of the design and construction processes depending on building structures, technology, spatial planning, engineering solution and type of design;

4.1.40."Zero axis" means markings on a site that connects basic building dimensions and levels to the state geodetic network;

4.1.41."Division" means sequence of technology for development of construction design, contracting, and building commissioning each;

4.1.42."Accreditation" means the process of issuing professional conclusion on and approving the strength and reliability of a building that is being used;

4.1.43."Original model drawing/blueprint" means a document developed based on engineering survey that describes general clustered layout, landscaping, street overview, coherence with the surrounding buildings, spatial planning, structure, general solution for utilities supply, health and safety, sun light, building floor plan, section, facade, architecture, color selection, and specifications.

5 Article.Building regulatory documents

5.1.Construction operation shall be regulated by the following regulatory documents:

5.1.1.Building norms and regulations;

5.1.2.Building regulations or technical rules, instructions, album and methods;

5.1.3.Standard.

5.2.The building norms and regulations referred to in Article 5.1.1 of this law shall be adhered mandatorily whereas the building norms and regulations stated in 5.1.2 will be adhered optionally.

5.3.The building norms and regulations, building rules and standards shall stipulate detailed technical conditions and requirements for buildings.

5.4.It can be stated in contracts that the documents referred to in 5.1.2 and 5.1.3 of this law are mandatory to adhere to.

5.5.Costs to develop, approve and publicize the building regulatory documents stipulated in Article 5.1 of this law shall be covered from the state budget and the Building regulation fund.

5.6.The Cabinet member in charge of construction issues shall approve the procedures on functions of the Building regulation fund, its expenditure, oversight and reporting.

5.7.The Building regulation fund shall consist of the following sources:

5.7.1.Revenues obtained at 0.18 percent from estimated cost of the building;

5.7.2.Sales revenues from the building regulatory documents;

5.7.3.Donations made by citizens and legal entities with the purpose of streamlining the standards;

5.7.4.other revenues.

5.8.Funds of the Building regulation fund shall be spent to develop, study, publicize and publish the regulatory documents and coordinate these activities.

5.9.Development, approval, use of standards for construction material production and business, and issue of certificate of conformity shall be regulated under laws.

5.10.It shall be prohibited to duplicate the building regulatory documents without permission of the central public administrative body in charge construction issues.

6 Article.Acceptance of international technical rules and standards

6.1.Issues that are not regulated under the building regulatory documents of Mongolia may be regulated under building norms, regulations, and standards of international organizations and foreign countries.

6.2.Building norms, regulations and standards of international organizations shall be registered and adhered to in construction activities in accordance with Article 6.3 of this Law.

6.3.The Cabinet shall approve procedures on use of building norms, regulations, and standards of international organizations and foreign countries.

6.4.International norms, rules and standards, which to be used in the construction and development of state-owned oil refineries and crude oil pipelines, their main technological and auxillary facilities shall be registered and enforced in accordance with regulation specified in Article 3.3 of the Law on Supporting Petroleum Refineries.

/This section was added by the law in January 29, 2021/

7 Article.Public and third party rights and interests

7.1.Authorities shall consider the following issues to issue construction work license:

7.1.1.Rights and interests arising out of construction operation and concerning land, immovable property owned, used or occupied by citizens or legal entities;

7.1.2.Rights and interests of citizens and legal entities to live and work in a healthy and safe environment;

7.1.3.Compliance with the principles set forth in the urban development legislation.

7.2.In case public and third-party rights and interests are violated, personal rights and interests may be restricted at the decision of authorities on the grounds and requirements set forth in this law.

7.3.Living and working environment of third parties and their right to use buildings may be modified to an extent stated in laws during construction process without subjecting it to deterioration.

7.4.Design drawings and topographical map of buildings to be built with public funds, loans and aid from international organizations or foreign countries shall be open and transparent to the public. Information referred to in Article 18.1 of the Information transparency and access law shall not apply here.

7.5.National and local government authorities in charge of construction issues shall be responsible to protect the interests of third parties through enforcement and implementation of relevant regulatory documents in construction process, and oversight.

8 Article.Construction industry insurance

8.1.Participants in construction business may be insured against potential risks. 

8.2.Potential damages to life, health and property of third parties due to wrongful acts or omissions of construction business participants shall be insured. The insurance shall be negotiated by the client and contractor in advance and specified in the contracting agreement.

8.3.Professionals with the qualifications stated in Articles 44.3.2 and 44.3.2 of this law shall obtain professional liability insurance.

8.4.The construction contractor shall ensure life insurance coverage are provided for its workers to work at the building.

CHAPTER TWO

CLASSIFICATION OF CONSTRUCTION WORK AND BUILDINGS

9 Article.Types of construction work

9.1.There shall be the following types of construction work:

9.1.1.Build new buildings;

9.1.2.expand and renovate buildings;

9.1.3.Repair and equip buildings;

9.1.4.Demolition;

9.1.5.outdoor landscaping.

10 Article.Classification of buildings

10.1.The buildings shall be classified into the following categories depending on complexity:

10.1.1.Buildings that don't require construction work permits;

10.1.2.Buildings of low complexity;

10.1.3.Buildings of medium complexity;

10.1.4.Highly complex buildings;

10.1.5.Exclusively complex buildings.

10.2.The Cabinet member in charge of construction affairs shall determine the purpose and capacity of buildings subject to the classifications set forth in Article 10.1 of this Law in alignment with the type of construction work set forth in Article 9.1 of this Law.

CHAPTER THREE

BASIC REQUIREMENTS FOR CONSTRUCTION OPERATION

11 Article.Construction operation principles

11.1.The following principles shall be adhered in construction operation:

11.1.1.Ensure mechanical safety: Ensure that construction materials, designs, structures and articles don't cause hazards to health, life, property of citizens and the environmental, are durable and firm;

11.1.2.Ensure fire safety: Ensure that the design drawings contain fire prevention, protection and damage restriction tools during occupancy;

11.1.3.Ensure environmental safety: Ensure that buildings are designed and built without negative impact on the environment and are safe for human health, lives, property, animals and plants;

11.1.4.Ensure safety for humans: Ensure that buildings are designed and built in a manner that is protected physical, chemical, biological, and radiation effects, high frequency wave and other harmful substance impacts;

11.1.5.Ensure safety of building occupants; Ensure that buildings are designed and built in a manner that it doesn't cause damages to human health and lives during occupancy, it is fire resistant, and has reliable power supply and electricity source;

11.1.6.Ensure that buildings are designed and built to ensure rights of disabled people, and their transportation and safety of their movement;

11.1.7.Implement green development policy and eco-building requirements in construction operations, introduce innovative technologies and plan efficient use of electricity, heat, steam and water sources.

12 Article.Requirements for building design

12.1.The following requirements shall be met for the building design:

12.1.1.Ensure that it is developed based on land permit issued by authority, drawing specifications, regulatory documents, technological specifications, equipment maintenance files, technical conditions and engineering survey;

12.1.2.Ensure that energy, water supply, sewerage and communications system are being designed to be efficient, and doesn't restrict use of renewable energy and natural lighting;

12.1.3.Ensure that buildings are protected from noise, vibration, smoke, toxic gases, high frequency, waste, radioactive substances and soil contamination that have adverse effects on the environment;

12.1.4.Ensure that it is designed in a manner that streets, areas and public parks can be used freely and doesn't hinder parking area, its entry and exits;

12.1.5.Ensure to prevent and protect from technical and fire hazards to human lives, health and environment, and it has access to evacuation during natural disasters and dangerous phenomenon accidents;

/This part was revised by the law of 02 Feb 2017/

12.1.6.Ensure that it meets needs and technical requirements of disabled people;

12.1.7.Ensure that job coordination maps are developed to ensure safety in construction work;

12.1.8.Design and build facade, roof and patio railing and enclosures in line with the surrounding architecture and layout.

13 Article.Requirements for building materials and products

13.1.The building materials and products used in buildings shall meet the following requirements.

13.1.1.Meets fully requirements of the building regulatory documents and design;

13.1.2.Free of negative impacts on human lives, health and the environment;

13.1.3.Has certificate of origin and laboratory certificate that proves quality;

13.1.4.Has containers, packaging and labels that meet quality requirements.

13.2.The building materials and products shall be selected and reflected in the design according to the building purpose and planning.

13.3.Information on requirements of the standards of building materials and products shall be described in the building design.

13.4.The building materials and products shall be modified at the designer's decision only during the construction process at the request of the client and contractor.

13.5.Detailed requirements for the building material production, extraction and building materials and products shall be regulated under the building regulatory documents.

14 Article.Requirements for buildings

14.1.The buildings shall meet the following requirements.

14.1.1.Ensure that it is built as per the design;

14.1.2.Ensure that it meets requirements of the regulatory documents for buildings;

14.1.3.Ensure that it is free of adverse impacts on the environment;

14.1.4.Ensure that it doesn't endanger smooth occupancy of the adjacent buildings.

14.2.The landscaping area and green space outside buildings shall not be less than what is stipulated in the urban development regulatory documents.

14.3.The building occupancy improvement and adjustment period shall be one year.

14.4.In case the period stated in 14.3 of this Law expires, the contractor, designer and client shall inspect the building together and make notes to rectify the discrepancies.

14.5.As the discrepancies are rectified in accordance with Article 14.4 of this Law, the violations set forth in 14.3 of this Law shall be deemed as expired.

14.6.The life of exterior and interior decoration of the building, all types of materials, basic structure, drinking and sewage water, steam, gas, heat, electricity and communications equipment and fittings shall be no less than three years from the expiry of the period stated in Article 14.3 of this Law.

14.7.Whether it is the client, designer, contractor, material supplier or user, whoever at fault shall rectify the discrepancies occurred during the period specified in Article 14.6 of this Law and indemnify for damages.

14.8.For buildings funded by the state and local budgets as well as foreign aids and investments, the terms and conditions of retaining certain percentage of the contract value as security deposit with the purpose of guaranteeing fulfillment of the obligations of the contractor within the period specified in 14.3 of this Law shall be regulated according to Article 43.6 of the Law on Procurement of Goods and Services with State and Local Funds.

14.9.The Cabinet member in charge of construction affairs shall enact the regulation on determining the standard life of buildings.

14.10.Issue of continued use beyond the expiration of the term stated in Article 14.9 of this law shall be determined by the competent building inspection authority.

14.11.Expiration of the standard life of buildings shall be the ground to release the client, designers, contractors, construction material suppliers, consultants and experts from the liability stated in Article 50 of this law.

14.12.After the expiration of the standard life of buildings, if the authority stated in Article 14.10 of this law finds that the building is usable, a certificate of occupancy stated in Article 49.2.1 of this law shall be issued.

15 Article.Requirements for the benefit of disabled citizens

15.1.Building drawings shall address requirements for disabled citizens.

15.2.Requirements stated in Article 15.1 of this Law shall be regulated under building regulatory documents and standards.

16 Article.Requirements for construction sites

16.1.It shall be prohibited for the client or contractor to modify arbitrarily boundary and size of the site granted for construction.

16.2.Legal entity licensed to provide geodetic and cartographic services shall determine the zero cycle in line with geodetic marks /red line/ as described in the design.

16.3.Construction site and production management design drawings shall be developed to perform building erection and demolition.

16.4.Competent legal entity referred to in Article 16.2 of this law shall submit the zero cycle information of the building to the local government authority.

17 Article.Subject to servitude on the construction site

17.1.A construction site may be subjected to servitude as stipulated in the Civil Code and the grounds and procedures under other relevant laws.

17.2.In case it is essential, adjacent areas or plot of land of immovable property owner and user and immovable property shall be subject to servitude.

17.2.1.Build buildings, rebuild or repair;

17.2.2.Build or rebuild utilities and infrastructure facilities;

17.2.3.Enable engineering survey for the soil in the area and protect it;

17.2.4.Erect temporary or permanent shelter to access the building.

17.3.Servitude may be subjected in accordance with Article 17.2 of this Law for the temporary use of public special purpose lands and sites for construction activities by the decision of the Heads of the Citizens' Representatives' Council of aimag, capital, soum or district.

CHAPTER FOUR

CONSTRUCTION LICENSE AND CONSTRUCTION WORK PERMIT

18 Article.Operation of construction business

18.1.Construction business shall be operated based on the licenses and construction work permits and records in accordance with the conditions and procedures set forth in this Law.

18.2.Construction work for the buildings that fall under the classifications specified in Articles 10.1.2, 10.1.3, 10.1.4 and 10.1.5 of this Law shall be operated by legal entities who hold the license issued by the State central public administration body in charge of construction issues.

18.3.For carrying out the construction of buildings that fall under the classifications specified in Article 10.1.1 of this Law, the license stipulated in Article 19.1.2 of this Law is not required.

18.4.Issuance of the construction license and registration of construction industry legal entities specified in Article 19.2 of this law may be carried out by professional non-governmental organizations.

19 Article.Construction license

19.1.The following construction activities shall be carried out on the basis of license.

19.1.1.Develop design for the buildings that fall under the categories specified in Articles 10.1.2, 10.1.3, 10.1.4 and 10.1.5 of this law;

19.1.2.Perform the construction work for the buildings falling under the categories specified in Articles 10.1.2, 10.1.3, 10.1.4 and 10.1.5 of this law;

19.1.3.Manufacturing, installation, service and maintenance of lifting mechanisms and its parts;

19.1.4.Manufacturing of load-bearing design, structures, articles, materials, and their raw materials, flammable, toxic, and energy-saving products.

19.2.The competent entity specified in Article 34 of this law shall keep the records of construction business license holders and shall submit the information to the state building inspection authority and competent authority specified in Article 35 of this law.

20 Article.Issuance of license

20.1.The construction business license shall be issued within 10 working days after the receipt of application.

20.2.License to develop designs and perform construction work for more than 30-meter-high facilities such as towers, supporting or basic walls or buildings with more than 16 floors and those that supply water, heating and power shall be issued only for the particular facility.

20.3.A legal entity applying for construction business license shall submit the documents specified in Article 11 of the Business license law as well as the following documents to the authority specified in Article 34 of this law.

20.3.1.Information on the personnel;

20.3.2.List and description of tools, equipment and machinery Information on the production premises;

20.3.3.A copy of the contract on leasing the equipment and machinery specified in Article 20.3.2 of this law from other legal entities, if necessary;

20.3.4.Findings of the certification of the design concerning the building specified in Article 20.2 of this law.

20.4.It shall be prohibited to require documents other than those specified in Article 20.3 of this law concerning the issuance of the construction business license.

20.5.The construction business license shall be issued for a period of five years.

20.6.The construction business license may be extended for the period specified in Article 20.5 of this law.

20.7.The legal entity that holds a construction business license shall operate business within the framework of the construction work permit specified in Article 26 of this law.

20.8.The State central administrative body in charge of construction issues shall revoke the license and publicly announce based on the findings of the state building inspection authority in the following cases.

20.8.1.Violation of the requirements specified in Articles 12, 13, 14, 15, and 16 of this law;

20.8.2.Failure to engage in the activities specified in the license for three consecutive years.

20.9.The license holder shall submit business operation reports as per the construction documents specified in Article 33.1.17 of this law to the central public administration body in charge of construction issues.

20.10.Construction business license shall not be obtained to reuse the design of the design of buildings specified in Article 20.2 of this law.

21 Article.Registration of citizen, legal entities operating construction business

21.1.Legal entities engaged in construction scoping, geodetic and cartographic services, building design development, construction material manufacturing, construction cost estimation shall submit a document evidencing their compliance of the requirements specified in Article 21.2 of this Law and be registered. Registration can be carried out electronically.

21.2.The Cabinet member in charge of construction issues shall approve the requirements, documents and registration procedures that apply to the citizen and legal entities engaged in the business fields specified in Article 21.1 of this law as per the categories specified in Article 10 of this law.

21.3.Legal entities and personnel engaged in a construction business shall be recorded into unified registry and database.

22 Article.Issuance of technical specifications

22.1.Application for technical specifications of buildings shall be submitted to the utility supplier specified in Article 22.2 of this law for processing. The following documents shall be attached to the application.

22.1.1.Permit issued by competent authority;

22.1.2.Cadastre drawing of the unit area of the plot of land where the building is to be built and photographs showing its conditions;

22.1.3.a copy of the civil identification card of the applicant, or a copy of the state registration certificate if the applicant is a legal entity;

22.1.4.In case the application is to be delivered by proxy, power of attorney;

22.1.5.architectural model drawing;

22.1.6.Information that describes capacity and utility supply needs of the building that requires technical specifications.

22.2.The engineering provider shall process the issuance of technical conditions and approval within 10 working days.

22.3.Refusal by the utility supplier to issue the technical specifications shall not deter the applicant to meet its utility needs from its own sources. In case the applicant develops and certifies a design to meet utility supply needs from own sources, the construction work permit may be issued.

22.4.Construction work permit can be issued in case the applicant developed and obtained approval for design drawings where its engineering demand is addressed at its own sources.

23 Article.Development of building designs

23.1.The issue of whether to certify building location and model drawings shall be resolved within 10 working days in accordance with Article 35.1.3 of this law.

23.2.Original model drawing /sketch/ and comprehensive working design shall be developed based on the location, model drawing and technical specifications of the certified building specified in Article 23.1 of this law.

23.3.The comprehensive working design drawings specified in Article 23.2 of this law shall be developed in the following stages.

23.3.1.Development of design drawings for the buildings to be built according to the categories specified in Article 10.1.5 of this Law or as complex shall be in two stages - "technical drawing" and "working drawing";

23.3.2.Development of design drawings for buildings except under Article 23.3.1 of this Law shall be in one stage - "working drawing".

23.4.The client shall specify the design development stages in the contract made with the design company and in the drawing task.

23.5.Design documents developed by competent foreign legal entity shall be certified together with a competent legal entity of Mongolia and the design documents shall be in English and Mongolian languages.

23.6.The requirements to certify the building design developed by the competent foreign legal entity shall be described in the building design development and certification rules specified in Article 32.1.8 of this law.

23.7.The design and approval of state-owned oil refineries and crude oil pipelines, their main technological and ancillary facilities shall be regulated by the procedure set forth in Article 3.3 of the Law on Supporting Petroleum Refineries.

/This section was added by the law in January 29, 2021/

24 Article.Construction cost estimate

24.1.The following principles shall apply for construction costing, planning, approval and implementation, including:

24.1.1.Be based on the approved design;

24.1.2.Reflect building location, environmental conditions, and release of land;

24.1.3.Be guided by building cost component, budgeting guidelines, regulatory documents, rules, instructions and methodologies;

24.1.4.Be independent.

24.2.Cost estimates for buildings to be funded with public funds or foreign loans or aid should be developed by a Budgeter/Estimator with professional qualifications.

24.3.The budgeters with professional qualifications specified in Articles 44.3.2 and 44.3.3 of this Law shall have their work reports reviewed by a professional budgeting body. The budgeter's code of conduct shall be approved and enforced by a body specified in Article 33.1 of this Law.

24.4.In case of modifying cost estimates for the buildings depending on changes to construction materials prices and rates, the state central administrative bodies shall jointly review the grounds and estimates and decide funding in accordance with relevant procedures.

24.5.It shall be prohibited to unreasonably withhold construction performance funding for buildings that have been built according to the requirements of the building regulatory documents and certified in accordance with applicable procedures.

24.6.The Cabinet member in charge of construction affair shall approve the construction cost component rules and cost estimation methodology.

25 Article.Certification of building designs

25.1.Certification of building designs shall be completed within 15 working days for the original model drawing /sketch/ and working drawing stages specified in Article 23.2 of this law.

25.2.The certification shall be performed on the following designs.

25.2.1.Design, feasibility study, engineering calculations and cost estimate for buildings that fall under the categories specified in Articles 10.1.2, 10.1.3, 10.1.4 and 10.1.5 of this Law and to be built in an area of seismic magnitude of seven or more;

25.2.2.Design, feasibility study, engineering calculations and cost estimate for buildings that fall under the categories specified in Articles 10.1.4 and 10.1.5 of this Law and to be built in an area of seismic magnitude of less than seven;

25.2.3.Construction site and production management design;

25.2.4.Engineering and geological findings and geodetic maps;

25.2.5.Cost estimate and integrated budget for buildings under the categories specified in Articles 10.1.2 and 10.1.3 of this Law and to be constructed with public funds or foreign loans and aid.

25.3.The building design developed by a foreign legal entity shall be subject to Article 25.2 of this law, too.

25.4.If the design specified in Articles 25.2 and 25.3 of this law hasn't been certified, it shall be prohibited to issue a construction work permit.

25.5.If modifications have been made in the main design and structure of the building during construction process, the modified design shall be re-certified.

25.6.The certification finding shall be in two forms - refusal and acceptance. The refusal of the certification finding shall be the ground to refuse to issue the construction work permit.

25.7.Disputes concerning the certification finding specified in Article 25.6 of this law may be discussed and resolved by relevant professional council.

25.8.The design of building that fall under the categories specified in Article 10.1.1 of this law may be certified at the request of the client.

25.9.Violation of the requirement under Article 12.1 of this Law shall constitute the grounds to certification rejection.

26 Article.Construction work permit

26.1.The construction work permit shall be issued for the buildings that fall under the categories specified in Articles 10.1.2, 10.1.3, 10.1.4 and 10.1.5 of this Law.

26.1.1.New construction of buildings;

26.1.2.Expand or rebuild buildings;

26.1.3.Demolition of buildings.

26.2.If the basic building structure and size and capacity of utilities have been modified, the design shall be re-developed and the construction work permit shall be re-obtained.

26.3.The construction work permit shall be issued according to the category, design documents as specified in Article 10.1, 23.2 and 28.2 of this law for expansion and rebuilding of buildings.

26.4.Where more than one building is to be constructed at the granted land, the construction work permit shall be obtained for the maximum level of complexity.

26.5.The relationship between issuing a permit for the construction of a state-owned oil refinery and a crude oil pipeline shall be regulated by the procedure set forth in Article 3.3 of the Law on Supporting Petroleum Refineries.

/This section was added by the law in January 29, 2021/

27 Article.Process of issuance of construction work permit

27.1.The authority specified in Article 35.1 of this law shall issue the construction work permit.

27.2.The authority specified in Article 28.2 of this law shall issue the construction work permit within 10 working days based on the documents referred to in Article 27.1 of this law.

27.3.If the authority specified in Article 27.1 of this law refuses to issue the construction work permit, it shall deliver reasonable explanation to the applicant.

28 Article.Issue of certificate of construction work permit

28.1.The construction work permit shall be accompanied by the certificate in accordance with Article 27.1 of this law.

28.2.The following documents shall be attached to the application for construction work permit.

28.2.1.Decision that certifies location, model drawing and technical specifications of the building;

28.2.2.Certified comprehensive design of the building and certification findings;

28.2.3.Information on the building designer /registry number, identity card for professional association member, address, phone number, e-mail address; certificate of state registration and company brochure for legal entities/;

28.2.4.Building assessment report if environmental impact assessment is required for the building according to the environmental laws;

28.2.5.Attach the certificate if insured against accident or liability.

28.3.Apart from the documents referred to in Article 28.2 of this law, the licenses of the designer and contractor shall be attached.

28.4.The application for construction work permit shall be accompanied by a plan on how to implement supervision during the construction work stages.

28.5.The documents referred to in Article 28.2 of this law and attached to the application of the applicant for starting or continuing construction work shall be reviewed in order to issue the permit.

28.6.The authority specified in Article 35.1 of this law shall be prohibited to require documents other than those specified in Articles 28.2, 28.3 and 28.4 of this law.

29 Article.Information to be included in the certificate of construction work permit.

29.1.The following information shall be included in the certificate of construction work permit issued by the authority specified in Article 27.1 of this law.

29.1.1.information on the location of the building;

29.1.2.Land registration information and cadastre norm;

29.1.3.Date of the construction work permit and number of the permit;

29.1.4.Validity of the construction work permit;

29.1.5.Date of commencement of the term of the construction work permit;

29.1.6.Information on the building purpose and capacity;

29.1.7.Category of the building;

29.1.8.Information on the building client and contractor;

29.1.9.Position and signature of the official who issued the construction work permit.

29.2.In case there are changes to the information specified in Article 29.1 of this law, the licensing authority holds the right to make relevant changes to the licensing decision and certificate of the construction work permit.

30 Article.Term of the construction work permit

30.1.The construction work permit shall be issued for the period of construction work site as well as the production management drawings. The term shall be counted from the day specified for start of the construction work.

30.2.If the construction work didn't end within the period specified in 30.1 of this law, the client shall apply for extension 30 days before the expiration of the term of the permit to the authority specified in 27.1 of this law and attach a plan that states the actual period when the unfinished work shall be completed.

30.3.The authority specified in Article 27.1 of this law shall resolve the issue within five working days of receipt of the application specified in Article 30.2 of this law, and shall make amendments to the certificate of construction work permit.

30.4.If the application has not been submitted according to 30.2 of this law and the term of the construction work permit has expired, the construction work permit shall be obtained again in accordance with 27.2 and 28.2 of this law.

CHAPTER FIVE

CONSTRUCTION SECTOR MANAGEMENT AND REGULATION

31 Article.Powers of the State Great Khural

31.1.The State Great Khural shall determine state policy on the development of the construction sector, approve construction legislation and oversee its implementation.

32 Article.Powers of the Cabinet

32.1.The Cabinet shall exercise the following powers: 

32.1.1.organize the implementation of the construction legislation;

32.1.2.Develop policies on the construction industry budgets, investment and development, and present to the State Great Khural;

32.1.3.Approve general framework of the regulatory documents for buildings;

32.1.4.Determine the route, technical conditions, principles and sequence to install communications and utilities facilities in total distribution, settlement and zoning territory;

32.1.5.To resolve the issue of issuing construction permits for state-level constructions such as nuclear and thermal power plants, hydropower plants, railways, airports, subways, transnational oil and gas pipelines, oil refineries and crude oil pipelines;

/This part was amended according to the law dated January 29, 2021/

32.1.6.approve the rules of building occupancy;

32.1.7.approve the rules of building commissioning;

32.1.8.approve the rules of building design development and certification;

32.1.9.approve the rules for construction clients;

32.1.10.approve licensing rules for start and continuation of construction work;

32.1.11.Prohibit buildings that do not have design drawings to be included in the public investment plan;

32.1.12.Within the legal frameworks, resolve the matters with respect to the use of common minerals and raw materials in construction material production at special purpose territories;

32.1.13.Other powers stated in laws.

33 Article.Powers of the state central administrative body

33.1.The state central administrative body in charge of construction issues shall exercise the following powers:

33.1.1.Ensure implementation of the government construction policies, laws, and Cabinet decisions, and monitor and evaluate its enforcement;

33.1.2.Approve the building regulatory documents stated in Articles 5.1.1 and 5.1.2 of this law;

33.1.3.Approve a procedure of competitive selection and licensing of building design certification experts;

33.1.4.Determine the unified policy on engineering infrastructure development and construction and coordinate;

33.1.5.Approve the integrated registry and database of the construction sector;

33.1.6.Provide professional and technical guidance to local government authorities in charge of construction affairs;

33.1.7.Develop and approve policies on construction sector science and technology;

33.1.8.Approve procedures on the construction sector science and technology council;

33.1.9.Approve the rules for re-training and professional qualification of construction sector professionals;

33.1.10.Approve and publish standard rates for unit capacity of buildings, price index and construction worker's rate in consultation with the state central administrative body in charge of financial and economic issues;

33.1.11.Approve the rules for general testing and research laboratory, provide its management and organizational structure and oversee its operation;

33.1.12.Approve the rules for ad hoc professional and experts' council by type of engineers and architects;

33.1.13.Approve the procedures on verification and use of building electronic computing software;

33.1.14.Approve the procedures on management of maintaining and updating records of construction industry professionals and legal entities, uploading information in the database, and provision of information;

33.1.15.Approve the procedure for issuing license to legal entities engaged in building design, building contracting, building materials production, installation, service and repair of lifting mechanisms and its parts, as well as setting service fees and overseeing these activities;

33.1.16.Review the report of the aimag or capital city Governor concerning implementation of the general city and village development plans, land permits, issuance of technical specifications, quality of buildings, certification, and registration of occupancy;

33.1.17.Approve the template of building records and information to be compiled nationwide in cooperation with the National Statistical Office;

33.1.18.Approve the procedure on maintaining profiles on buildings;

33.1.19.Expand and update the "Coordinated Goods Description and Coding system" on the registration of exported or imported construction materials, equipment, machinery and raw materials in cooperation with relevant authorities;

33.1.20.Approve the contract template for construction business;

33.1.21.Approve the rules on Designer's supervision on construction work;

33.1.22.Approve the common procedure for electronically receiving and resolving the applications for construction permits and providing a one-stop service in the construction industry';

33.1.23.Other powers stated in laws.

34 Article.Function of the central administrative body in charge of construction matter

34.1.The state central administrative body in charge of construction issues shall perform the following functions:

34.1.1.Ensure implementation of the construction laws and Cabinet decisions;

34.1.2.Arrange the development of building regulatory documents and standards;

34.1.3.Arrange retraining, qualification renovate and certification of qualification levels for construction sector personnel;

34.1.4.Arrange certification of building design;

34.1.5.Implement policies on construction sector science and technology;

34.1.6.Manage promotion, introduction and enforcement of the building regulatory documents;

34.1.7.Manage keeping and updating unified records of construction sector personnel and legal entities, uploading information in the database, and provision of information;

34.1.8.Develop standard rates for unit capacity of buildings and price index;

34.1.9.Participate in the bidding process for selection of contractor for buildings to be built with public funds on behalf of the license issuer;

34.1.10.Select citizens and legal entities engaged in certification of building design through a competitive selection procedure, and grant license for experts;

34.1.11.Maintain an integrated registry of citizens and legal entities that provide consulting services;

34.1.12.Manage activities to source and expend building regulation funds;

34.1.13.Establish a professional council of engineers and architects and manage its functions;

34.1.14.Manage the activities of building design, building contracting, building materials production, installation, service and repair of lifting mechanisms and its parts in a one-stop service;

34.1.15.Organize the review and approval of the technological instruction of construction materials production;

34.1.16.Other powers stated in laws.

34.2.Functions specified in Articles 34.1.2, 34.1.3, 34.1.4, 34.1.6, 34.1.7, 34.1.8, 34.1.9, 34.1.10, 34.1.11, 34.1.13, 34.1.14, 34.1.15 of this law may be delegated to non-governmental professional organizations under contract based on the decision by a competent authority.

35 Article.Powers of the aimag or capital city Governor

35.1.Aimag or capital city Governor shall exercise the following powers concerning construction.

35.1.1.Ensure and oversee the implementation of the government policies, laws and Cabinet decisions in their respective territories;

35.1.2.Enforce building regulatory documents in construction operation;

35.1.3.Ensure location identification and issuance of land for buildings, approval of model drawings, and issuance of technical conditions, maintain and store integrated records, ensure information safety, and maintain and oversee regular database operation;

35.1.4.Oversee the occupancy of buildings located within their territory, register and issue passports;

35.1.5.Approve the procedure on construction work safety and ensure its implementation;

35.1.6.Issue construction work permits and commission buildings;

35.1.7.Take measures to forcibly demolish buildings that do not meet the requirements of regulatory documents and ensure relevant costs are covered by the liable/faulty entity, based on conclusion by the general inspector of state inspection implementing authority and on court order;

35.1.8.Receive and resolve requests with regards to activities specified in Articles 35.1.3, 35.1.4 and 35.1.6 of this Law, and manage them through a one-stop service.

CHAPTER SIX

PARTICIPANTS IN CONSTRUCTION OPERATION

36 Article.Participation of citizen, non-governmental organizations

36.1.The state central administrative body in charge of construction issues may transfer, under contract, some of its functions to non-governmental professional organizations and private entities in accordance with Articles 18.4, 34.2 and 44.7 with the purpose of increasing public service quality and access.

36.2.Citizens may file complaints and comments concerning violations of requirements under laws and regulatory documents as well as their rights to live in a safe, healthy and comfortable environment to authorities as stated in laws.

36.3.Citizens and non-government organizations may submit their comments on building regulatory documents.

37 Article.Obligations of the client

37.1.The client for construction work shall perform the following obligations.

37.1.1.Submit construction documents in accordance with the requirements under relevant laws and regulatory documents;

37.1.2.Ensure comprehensive information on buildings and its operations are publicly posted in the particular territory in accordance with Article 14.4.1 of the Law on Information Transparency and the Right to Information;

37.1.3.Obtain technical specifications, design development and construction work permits of the building pursuant to Articles 22, 23, and 26 of this Law and comply with the conditions specified therein;

37.1.4.Enter into an agreement pursuant to Article 33.1.20 of this Law for implementing oversight of the relevant stages of construction work;

37.1.5.Ensure Designer's supervision is conducted and have independent laboratories determine quality and safety specifications of materials, structures and articles for each stage of construction work, and bear relevant costs;

37.1.6.Arrange commissioning of buildings pursuant to 48.1 of this law;

37.1.7.Pursuant to Article 41 of this law, initiate the protection mode during the set period if construction work is suspended;

37.1.8.Comply with the instructions and requirements provided by authorities for construction division; 

37.1.9.Adhere to the building regulatory documents for construction operation, implement measures to ensure occupational safety and health, and bear relevant costs;

37.1.10.Have the building design certified and bear relevant costs;

37.1.11.Ensure historical or archaeological professional organizations conduct preliminary prospecting and studies and protect immovable cultural heritage articles;

37.1.12.Manage construction investment issues and ensure financing is provided within the specified timeframe;

37.1.13.Bear risks and damages arising out of its own wrongful acts or omissions during operation of its construction operation;

37.1.14.Bear risks and damages arising out of its own wrongful acts or omissions during building occupancy adjustment and improvement period;

37.1.15.Maintain and update building documents during its occupancy;

37.1.16.Ensure the accuracy of building documents;

37.1.17.Ensure that pictorial and other advertising on landscaping, spatial planning and engineering infrastructure reflect the actual circumstances and bear responsibility to customers for accuracy of that information;

37.1.18.Attach pictorial advertising and other relevant materials specified in 37.1.17 of this law to the contract made with customers;

37.1.19.Oversee construction work performance, document it with photographs and verify surface and underground work act;

37.1.20.Cover the costs of releasing and commissioning of the area for construction.

37.2.The client may delegate its functions to participate in the construction operation to consultants and professional legal entities under the contract.

37.3.The client shall be definite in construction operation. If the client is not definite, the building user or owner shall be deemed to be the client. If the building user or owner is not definite, the land possessor or owner shall be deemed to be the client.

37.4.The client shall be prohibited to modify the building design without permission of the author.

37.5.It shall be prohibited to collect funds from citizens for residential buildings that haven't received land permit or technical specifications and its design has not been developed yet.

37.6.It shall be prohibited to occupy unfinished or uncommissioned buildings although having been constructed.

37.7.If streets are divided or damaged, utilities are moved and trees and gardens are temporarily removed during construction, renovate or repair, rehabilitate and bear costs.

37.8.Perform demolition of buildings based on the design specified in 16.3 of this law.

37.9.The following building design tasks and technical tasks under regulatory documents shall be reviewed by the relevant professional council:

37.9.1.Mandatory regulatory documents specified in Article 5.1 of this Law;

37.9.2.Portfolio specified in Article 4.1.18 of this Law;

37.9.3.Design of buildings specified in Articles 10.1.4 and 10.1.5 of this Law;

37.9.4.Design drawings of buildings, stated in Articles 10.1.4 and 10.1.5.

38 Article.Obligations of the designer

38.1.The designer shall perform the following obligations:

38.1.1.Develop building designs in compliance with laws and requirements of the regulatory documents and based on return on investment and technical calculations;

38.1.2.The designer who developed relevant part of the building design shall verify the particular design and be held professionally liable;

38.1.3.The designer legal entity shall review and verify whether the building design complies with the requirements of regulatory documents and shall be held responsible;

38.1.4.Perform author's technical supervision during construction work stages under contract;

38.1.5.Participate in the building commissioning process;

38.1.6.Accept and verify if proposals of the client to modify the building design comply with the quality and safety requirements on the building regulatory documents;

38.1.7.Develop the designs specified in 16.3 of this law; 

38.1.8.Demand the client to take measures required to implement the author's supervision;

38.1.9.Require the client to perform independent laboratory tests on building structure, materials and articles for assurance;

38.1.10.Develop findings, notify the state building inspection authority and ensure that relevant measures are taken if the construction work has not been performed in compliance with the requirements described in the building regulatory documents.

38.2.The designer shall be liable for damages arising out of its own wrongful acts or omissions that occurred during building occupancy adjustment and improvement period.

38.3.The designer shall be prohibited to certify the design developed by himself or herself.

39 Article.Experts to review/certify the building design

39.1.The state administrative body in charge of construction issues shall contract citizens and legal entities authorised pursuant to Article 34.1.10 of this law to certify building design.

39.2.Citizens who hold license of an expert may become part of a team of no more than two legal entities licensed to certify.

39.3.The competent authority specified in Article 33.1.3 of this Law shall revoke the certification license of an expert who violated the provision specified in Article 39.2 of this Law.

39.4.The expert shall issue certification conclusion for relevant part of the building design and be subject to professional liability.

39.5.A legal entity licensed to certify shall prove whether the building design complies with laws and requirements of the regulatory documents, issue a conclusion concerning technical solutions and be subject to liability.

40 Article.Functions of the building contractor

40.1.The building contractor shall exercise the following functions:

40.1.1.Ensure and oversee the performance of the construction work pursuant to permit, certified and acknowledged design, and requirements of the regulatory documents;

40.1.2.Comply with the legal requirements by competent authorities, designer and client to verify surface and underground work acts, keep notes of division, implement state building inspection;

40.1.3.Take measures to prevent buildings from force majeure and accidental hazards;

40.1.4.Comply with fire, occupational health and safety procedures at the construction site and protect immovable articles of environmental, historical and cultural value;

40.1.5.Enforce the occupational safety regime at the construction site and take measures to prevent and protect third parties from potential construction hazards;

40.1.6.Refrain from violation and interference with rights of third parties specified in Article 7 of this Law to live and perform their duties smoothly;

40.1.7.Allow unhindered access to the construction site for representatives of the construction process participants and present the construction work and building documents;

40.1.8.Bear damages arising out of its own wrongful acts or omissions that occurred during building occupancy adjustment and improvement period;

40.1.9.Personally perform building foundation, paving, roofing, stairs, framed structures, and roofing; 

40.1.10.Perform rehabilitation if streets are divided or damaged, utilities are transferred/relocated and trees and gardens are temporarily removed during construction, renovation or repair;

40.1.11.Prove that materials and equipment used in buildings meet the technical specifications described in the design, and have laboratory tests carried out for verification, if necessary;

40.1.12.Have laboratory tests carried out on strength of the building structure for each construction work stage for certification, and have it verified;

40.1.13.Develop and implement a drawing that organizes measures to ensure occupational health and safety conditions to prevent construction technology, production and equipment accidents;

40.1.14.Implement the provisions of Article 9.2 of the Law on Waste;

40.1.15.Include the costs specified in Article 5.8 of this law in the building cost estimate and transfer to the fund specified in Article 5.7 of this law;

40.1.16.Refrain from performing construction work without permission of competent authorities;

40.1.17.Develop and verify as-built drawing if the design has been modified during the construction work;

40.1.18.Be responsible to the client for performance and risks of the subcontractor in the event contractor hires a subcontractor and implement functions of the main contractor;

40.1.19.Perform demolition of buildings based on the design specified in 16.3 of this law;

40.1.20.Use construction materials that have certificates of origin and conformity;

40.1.21.Have insurance as specified in Article 8 of this Law;

40.1.22.Select and hire a subcontractor under contract unless the contract made with the client states otherwise;

40.1.23.In the event the contractor implements the client's obligations, exercise the functions set forth in Article 37 of this Law;

40.1.24.Citizens and legal entities may perform construction work that falls under the categories specified in Article 10.1.1 of this law without relevant permission. In such case, the requirements of the building regulatory documents must be complied with.

40.2.Performing construction work without design drawing shall be prohibited.

40.3.It shall be prohibited to use materials, products, articles that don't meet requirements of international or national standards and don't have certificates of origin and conformity in construction, renovation, expansion and repair of buildings, and use wood for formwork stanchions.

41 Article.Building protection mode

41.1.If the construction work is suspended for more than 7 months, the client shall initiate protection mode for the building and notify the building inspection authorities for relevant decisions. Duration and terms and conditions of the building protection mode shall be described in the decision on initiation of building protection mode.

41.2.The building protection mode shall be implemented as follows:

41.2.1.suspension of the construction work subject to the building construction technology conditions and provisions of the license for construction;

41.2.2.Ensure that the building is ready to protection mode transfer and take necessary measures;

41.2.3.Regular supervision by the client to ensure safety at the construction site.

41.3.The building protection mode shall be implemented in accordance with provisions of the technical regulatory documents.

41.4.Records of the transfer of the building to protection mode shall be kept and signed by the client and inspector of the competent building inspection authority for approval.

41.5.Construction work license shall be suspended and construction work shall be terminated from the date of submission of the records stated in Article 41.4 of this law to the building inspection authority.

41.6.Duration of the building protection mode shall be 2 years. The client may request an extension of the duration of the mode, if necessary. 

41.7.Upon expiry of the period specified in Article 41.6 of this Law, the client shall take measures to continue the construction of the building or demolish if quality and safety requirements are not met.

41.8.If the building has been released from protection mode, the client shall notify the building inspection authority for continuation of the construction work.

41.9.The period specified in Articles 41.1 and 41.6 of this law shall not apply to the decision made by the building inspection authority or the court concerning demolition of the building.

42 Article.Consulting services

42.1.Professional consulting services in the construction sector shall be provided in the following areas:

42.1.1.Engineering prospecting;

42.1.2.Investment scoping;

42.1.3.Develop building design, and define levels of development of regulatory documents; 

42.1.4.Provide feasibility study for construction material production, review, consulting and conclusion on the quality and technology of raw materials and manufactured products, conduct equipment installation and laboratory and industrial testing, and determine technological regime;

42.1.5.Determine technology and methods of mechanization of construction work, manufacture, installation, diagnosis, repair, maintenance, adjustment and improvement of lifting mechanisms and its parts;

42.1.6.Supervise construction work stages and develop findings concerning quality and safety of during occupancy of buildings;

42.1.7.Project management, coordination and technology level;

42.1.8.Implement the building client's functions;

42.1.9.Perform the works specified in Article 42.1.1 through 42.1.8 of this Law as a complete. 

42.2.Consulting services for buildings under the categories specified in Articles 10.1.4 and 10.1.5 of this Law shall be obtained mandatorily.

42.3.Citizens and legal entities that provide consulting services shall be registered with the authority specified in Article 34.1.11 of this law.

42.4.Requirements for the citizens and legal entities providing consulting services and procedures on its registration shall be approved by the Cabinet.

43 Article.Functions of construction material manufacturers and suppliers

43.1.Legal entities licensed to manufacture construction materials shall have the following functions except otherwise specified in other laws.

43.1.1.Extract and process commonly distributed minerals to be used in construction materials manufacture pursuant to the procedure specified in the Minerals Law and the Law on Common Minerals;

43.1.2.Conduct reclamation on mined areas of the deposit pursuant to laws;

43.1.3.Provide warranty for quality of their manufactured construction materials and products;

43.1.4.Undergo accredited laboratory tests regularly for construction materials, raw materials and products, obtain approval on technology guidelines and certificate of conformity;

43.1.5.Maintain and control a laboratory to determine basic quality indicators of the manufactured construction materials and products;

43.1.6.Manufacture new materials, structures, articles and products and use as prototype as per the license issued by the state central administrative body in charge of construction issues based on accredited laboratory findings;

43.1.7.Calibrate laboratory measuring instruments and devices.

44 Article.Construction industry personnel

44.1.The construction industry personnel shall be subject to registration in accordance with laws.

44.2.Ad hoc council in charge of qualification renew and certification of qualification levels under the state administrative body shall be responsible for continuous professional development and certification of qualification levels for personnel. The Cabinet member in charge of construction issues shall approve the rules of the council.

44.3.Construction professional shall have the following qualifications:

44.3.1.Engineer and architect;

44.3.2.Certified engineer, certified architect and certified budgeter;

44.3.3.Consulting engineer, consulting architect and consulting budgeter.

44.4.Qualification levels of trades shall be determined as one to six in accordance with standards.

44.5.Scope of services provided by professionals, its requirements and term of qualification level and professional license shall be determined in the rules specified in Article 33.1.9 of this Law.

44.6.The consulting professional who develops the designs specified in Article 43.3.3 of this law shall be entitled to participate in the licensing process for building design certification experts.

44.7.Qualification renovate and certification of qualification levels of construction industry personnel may be performed by professional non-government organizations under contract.

45 Article.Foreign citizens and legal entities working in the construction industry

45.1.A foreign citizen who has applied for participation in construction business shall have experience in the field and hold a work permit according to laws.

45.2.A foreign legal entity engaged in construction business shall obtain the license specified in Articles 19 and 20 of this law.

45.3.Except otherwise stated in Mongolian laws and legislation, foreign legal entities shall have a joint venture/collaborate with a competent legal entity of Mongolia specified in this Law to perform construction of buildings that are funded by state and local budgets or foreign loan and aid.

45.4.A foreign invested legal entity shall attach the certificate of construction license issued by the competent authority of the country to its application for license specified in Articles 19 and 20 of this Law.

45.5.Foreign citizens and legal entities engaged in construction business shall be registered in accordance with Article 21 of this Law.

46 Article.Obligations of the building owner and user

46.1.The building owner or user shall have the following obligations during the building occupancy, including:

46.1.1.Comply with the requirements specified in laws and regulatory documents;

46.1.2.Maintain profiles on the building in accordance with the procedure under Article 33.1.18 of this Law;

46.1.3.Maintain the basic design and structure of the building and refrain from modification;

46.1.4.Maintain utility supply system of the building;

46.1.5.Prevent building from fire hazards and ensure sanitation, hygiene, and ecological requirements are met;

46.1.6.Protect the environment and historical and cultural heritage articles;

46.1.7.Regularly maintain the building landscape and amenities and refrain from causing inconvenience to others by blocking the roads, sidewalks and site traffic;

46.1.8.Prevent accidents caused by overloading due to accumulation of rain, snow, ice, waste, dirt, dust and other items on the building roof, attic floor and other structures;

46.1.9.Regularly monitor the building's load bearing structures, and internal and external utilities system;

46.1.10.Ensure that professional contractors are hired to design, install and fasten information and communication equipment and promotional or lighting decorations on the building and prevent damages to the building structure;

46.1.11.Notify the building inspection authority for findings and take relevant action if serious damage is identified including cracks and crack formations in the building design;

46.1.12.Update and store the building documents during occupancy of the building;

46.1.13.Consult the aimag or capital city chief architect in case to modify the building facade;

46.1.14.Seek assessment by the state building inspection authority concerning the building condition every 15 years of the occupancy and take relevant action.

46.2.When evaluating the damage created in the building due to natural disasters, dangerous phenomenon force majeure, and accidents, the building occupancy condition shall be taken into consideration.

/This part was revised by the law of 02 Feb 2017/

46.3.The investor and client shall transfer the land permit for the commissioned building, certificate of zero axis layout, design drawings, surface and underground work acts, as-built drawings for external pipelines, and quality and safety findings and documents of occupancy issued by the client, designer, state building inspection authority during construction to the relevant state archive within 30 days of the occupancy of the building.

/This paragraph was amended by the law of 24 April 2020/

46.4.The owner or user shall be prohibited to cause damage to the building, modify basic design and structure, planning and purpose, and engaging in activities that may have negative impact on human life and environment, and endanger its smooth occupancy.

46.5.If building is damaged or collapses during occupancy, whoever is at fault shall be held liable whether the contractors, designer, user, owner, material manufacturers, suppliers or consultants.

46.6.If the building owner or user fails to fulfill their legal obligations, they shall be subject to liability imposed by laws.

CHAPTER SEVEN

STATE TECHNICAL INSPECTION

47 Article.State technical inspection of buildings

47.1.State technical inspection of buildings shall be carried out by the state building inspection authority.

47.2.The state building inspection authority shall implement the following inspections apart from the rights and obligations specified in the State audit law.

47.2.1.Quality of building construction, renovate and major repair;

47.2.2.Quality of construction materials, raw materials, articles and products;

47.2.3.Implementation of building design;

47.2.4.Occupancy of buildings;

47.2.5.Safety during lifting mechanism installation and use;

47.2.6.Quality of building design and engineering and geological surveys;

47.2.7.causes of building collapse, damages, and accidents at lifting mechanisms;

47.2.8.State registration of lifting mechanisms;

47.2.9.Quality of construction work performance;

47.2.10.Activities associated with the design development, performance of construction work, and production of construction materials;

47.2.11.Violations occurred during the improvement and adjustment period and use of buildings;

47.2.12.Implementation of protection mode for unfinished or suspended buildings;

47.2.13.Estimated cost of buildings and cost components.

47.3.The state building inspection authority shall oversee internal technical control carried out by the client, designer, construction materials manufacturer and contractor.

47.4.The state inspector may conduct additional inspection of the building with the purpose of clarifying whether it has been built according to the documents.

CHAPTER EIGHT

BUILDING CERTIFICATE

48 Article.Commissioning of buildings

48.1.The competent authority provided for in Article 35 of this law shall commission verifying whether it has been performed in accordance with the conditions set forth in the construction work permit.

48.2.Buildings shall be supplied temporarily with electricity, heat, hot and cold water required during the construction work and it shall be prohibited to supply electricity, communications, heat, hot and cold water to buildings that haven't been occupied permanently.

48.3.It shall be prohibited to conduct business in an unfinished building that has not received certificates.

48.4.A technologically separate component of complex building may be occupied as specified in 48.1 of this law.

48.5.The client shall request for occupancy of buildings to the authority specified in Article 35 of this law, and attach the following documents thereto:

48.5.1.Notes on performance of the construction stage;

48.5.2.Act on the surface and underground construction work;

48.5.3.Consolidated findings of the designer's review;

48.5.4.Consolidated findings of the client's technical review of the building;

48.5.5.Records and relevant information verifying whether utilities system connection has been performed as per technical specifications or other sources have been used;

48.5.6.Building modification designs;

48.5.7.Equipment installation acts, documents on equipment tests verified by relevant authorities, findings of the test performed to verify whether equipment has been installed as per instructions.

48.6.The authority specified in Article 35 of this law shall process the application for occupancy of the building within 10 working days.

48.7.The buildings shall be refused for occupancy in the following cases:

48.7.1.Failure submit the documents referred to in 48.5 of this law; 

48.7.2.Interference by the client or its agent with 47.2,the inspection specified in 47.5 of this law;

48.7.3.Violation of the terms and conditions of the permit specified in Article 26 of this law.

48.8.The client shall be responsible for accuracy of the documents referred to in 48.5 of this law.

49 Article.Certificate of occupancy and issue of accreditation

49.1.The state building inspection authority shall issue the certificate of occupancy to the building commissioned as per Article 48.1 of this Law within 7 business days based on the findings by the commissioning group.

49.2.The certificate of occupancy shall have the following types depending on the levels of quality and safety.

49.2.1.Green color for the newly constructed buildings that meet occupancy requirements;

49.2.2.Yellow color for the occupied buildings that have been renovated and found to be able to meet the occupancy requirements as per accreditation;

49.2.3.Red color for the occupied buildings found to have failed to meet the occupancy requirements as per certification.

49.3.The level of durability and reliability of buildings in occupancy shall be certified by the authority provided for in Article 35 of this Law in accordance with the procedure set forth in Article 49.5 of this Law and the competent authority referred to in Article 49.1 of this Law shall issue the appropriate certificate specified in Article 49.2 of this Law.

49.4.If renovation and repair has been carried out in the building specified in Article 49.2.2 of this Law and it meets the occupancy requirements, the competent authority specified in Article 35 of this Law shall commission it and issue the green certificate according to Article 49.1 of this Law.

49.5.The Cabinet member in charge of specialized inspection shall approve the procedure on issuing building occupancy certificates specified in Article 49.1 of this Law.

CHAPTER NINE

MISCELLANEOUS

50 Article.Liabilities for law violaters

50.1.Unless an official who has breached this law is subject to criminal liability, he or she shall be held liable as provided by the Law on Public Service.

50.2.An individual, legal person who has breached this law is subject to the liability in accordance with Criminal law or Law on Offence.

50.3.Imposition of fines on the offenders of the Construction law shall not constitute a release from their liability to rectify the offense and indemnify for the damage caused to others as a result of such offense.

/This article was revised by the law of 11 May 2017/

SPEAKER OF THE PARLIAMENT OF MONGOLIA Z.ENKHBOLD