Russian Federation: Novelties In The Field Of Legal Regulation Of Unauthorized Construction

Last Updated: 23 August 2012
Article by Clyde & Co LLP

The current edition of the Civil Code of the RF stipulates that an unauthorized construction is a residential building, other building, structure or other immovable property erected on a land plot not designated for such purpose in accordance with the procedure prescribed by law or other legislative acts, or erected without obtaining necessary permits, or in material breach of town planning and construction regulations and rules.

Draft amendments to the Civil Code currently under consideration ("the Draft Civil Code") contains a refined definition of unauthorized construction, in that it is defined as a building or a structure erected on a land plot on which the person who performed construction has no right to build, or erected without necessary permits, or in material breach of town planning and construction regulations and rules. Thus, unlike the current edition of the Civil Code, "other immovable property" facilities are not included in the definition of unauthorized construction, even if they are erected without corresponding rights and permits. However, the legal status of such facilities is not regulated by the Draft Civil Code.

Furthermore, in accordance with the current legislation the person who erected such a building ("Developer") does not acquire a right of ownership to it, is deprived of the opportunity to administer it and is obliged, at its own expense, to return the land plot to its original state by the demolition of the unauthorized construction. In cases specifically stipulated by law only the owner of the land plot can acquire the right of ownership to the construction.

The Draft Civil Code stipulates when a Developer may acquire the right of ownership to an unauthorized construction.

Firstly, a Developer's right of ownership will only be recognized if all the following conditions are satisfied:

  • The unauthorized construction in question was erected without material breaches of town planning and construction regulations and rules
  • The unauthorized construction was erected on a land plot owned by the state or municipal government
  • The Developer has the right to the land plot permitting construction on it

Secondly, a Developer can acquire a right of ownership to an unauthorized construction if it is located on a land plot that belongs to the Developer and there are no grounds for its demolition, (for example, material breach of construction regulations and rules in the course of erection of the building/structure).

Another novelty of the Draft Civil Code is the possibility of reimbursement of damages incurred by the Developer (the lessee of the land plot for the purposes of construction), on the acceptance of the unauthorized construction resulting from the lawful acts of the owner of the land plot. In practice it is quite common that in the process of construction on a rented land plot the owner of the land plot ("Lessor") waives the lease contract, or the contract validity period expires and the Lessor refuses to prolong the contractual arrangements while construction is still underway. In this case a Developer is forced to stop the construction because he will have no legal basis (i.e. lease contract) to perform construction on the land plot.

Articles 39 of the Land Code of the RF and article 271 of the Civil Code provides a right to the land plot to the owner of the facility under construction for the purpose of its redevelopment and operation respectively. However, there is no provision in current legislation which provides for a Developer's right to complete construction in the absence of the right to a land plot. Moreover, continued construction after the Lessor waived the contract can result in the construction facility constituting an unauthorized construction (paragraph 1 of article 222 of the current edition of the Civil Code).

Furthermore, current legislation does not provide for reimbursement of damages incurred by the Developer, as the waiver of a contract is a lawful act and thus rules out the possibility to recover damages.

In order to protect the Developer's rights, at least in relationship with state bodies which often support the Lessor, the Draft Civil Code provides for the possibility to recover damages inflicted by the lawful acts of public authorities or their officials.

Finally, the Draft Civil Code provides that the limitation period does not cover claims for the demolition of unauthorized constructions which create a threat to the life and health of people or are erected on a land plot where construction is forbidden by law (paragraph 5 of article 208 of the Draft Civil Code of the RF).

Clearly legal regulation of unauthorized constructions requires further development, but in the current revision of the Draft Civil Code the legislators made certain steps towards specifying the legal status of this phenomenon and stabilizing the Developers' position.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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