Russian Federation: Amendments To Real Estate Legislation Quarter 2 of 2017

Last Updated: 15 August 2017
Article by Karina Chichkanova


Ministry of Economic Development of Russia Decree No. 846 of December 27, 2016 "On Approval of the Procedure for Considering a Declaration of the Characteristics of a Real Estate Property, including its Form" (registered with the Ministry of Justice on April 3, 2017)

The Decree was adopted as part of developing the legislative regulation of state cadastral valuation.

The form of the declaration of the characteristics of a real estate property and the rules for consideration of the declaration by the budgetary institution empowered to determine cadastral value were approved. The declaration may be filed by the title holders of properties when performing state cadastral valuation and must be taken into account if it is consistent with the information available to and/or obtained by the relevant budgetary institution.

Filing a declaration is a right, not an obligation of title holders. Exercise of this right could potentially help to properly determine the cadastral value of properties and to avoid the need to later challenge the valuation. However, due to the broad language of the grounds not to take the declaration into account (inaccuracy of information contained in the declaration, other sources used by the budgetary institution containing information that refutes the content of the declaration), the declaration can hardly be considered a reliable mechanism for taking title holders' interests into account.

In St. Petersburg, the State Budgetary Institution "Municipal Administration for Cadastral Valuation," which has been assigned the authority to determine cadastral value, started to accept declarations in May 2017.

RF Government Resolution No. 402 of March 31, 2017 "On Approval of the Rules for Conducting Engineering Surveys Needed to Draft Site Planning Documentation, the List of Types of Engineering Surveys Needed to Draft Site Planning Documentation, and on Amendments to RF Government Resolution No. 20 dated January 19, 2006" 

Rules for conducting engineering surveys needed to draft site planning documentation are being introduced. It is envisioned that engineering surveys must be conducted to draft site planning documentation in the following cases:

  1. materials of engineering surveys placed in the ISOGD (urban planning support information system), FGIS TP (federal state information system for site planning), state fund of engineering survey materials and data, EGFD (unified state data fund), plans for integrated use and protection of water bodies and the state water register are insufficient;
  2. it is not possible to use existing engineering surveys because they are out of date.

The list of engineering surveys needed to draft site planning documentation and the procedure for doing them was also approved.

RF Government Resolution No. 452 of April 17, 2017 "On the Exhaustive List of Procedures in the Construction of Heating Supply Networks and on the Rules for Amending It and Maintaining the Register of Descriptions of Procedures Specified in the Exhaustive List of Procedures in the Construction of Heating Supply Networks"

The Resolution establishes an exhaustive list of procedures in the construction of heating supply networks. The approved list includes, in particular, procedures related to granting rights to a land plot and drafting site planning documentation, to entering into agreements for technological connection properties to utilities; to performance of construction, reconstruction, etc.

The procedure for amending the list of procedures and how the register of procedure descriptions should be kept was also regulated. The register of descriptions of procedures should be published on the official website of the RF Ministry of the Construction Industry, the Housing and Utilities Sector.

The decisions that were made are intended to lower the administrative barriers in town planning and to make procedures for the construction of heating supply networks more transparent.

RF Government Resolution No. 485 of April 22, 2017 "On the Content of Materials and Results of Engineering Surveys to Be Published in the Urban Planning Support Information System (ISOGD), the Federal State Information System for Site Planning (FGIS TP), the State Fund of Engineering Survey Materials and Data, the Unified State Fund of Data on Environmental Condition and Pollution (EGFD), and on the Form and Procedure for Submitting Them"

The content of the materials and results of engineering surveys done to draft site planning documents and to be published in information systems was determined.

Topographical surveys, geological surveys, hydrometeorological and ecological surveys are published in the ISOGD, FGIS TP, state fund of engineering survey materials and data, and also in the EGFD.

State authorities of all levels as well as individuals and legal entities that order work for engineering surveys must submit copies of survey materials and results obtained to the authorities competent to maintain the information systems within five days. The materials are submitted in hard and electronic copies.

Information from the ISOGD, FGIS TP and EGFD is open and public, other than information to which access is restricted by law. The state engineering survey materials and data fund is in the process of being created.

RF Government Resolution No. 542 of May 7, 2017 "On Amending and Repealing Certain Provisions of Acts of the RF Government on Compiling Documents for Technological Connection to Electrical Networks"

This Resolution is a rather technical one: it updates the provisions of certain acts of the RF Government devoted to documentation of the procedure for technological connection to electrical networks. For example, it updates the list of documents to be drawn up in the process of technological connection to electrical networks and the procedure for completing the documents.

At the same time, documents on technological connection duly drawn up before the Resolution entered into force continue to be effective until reissued.

Federal Law No. 100-FZ of May 28, 2017 "On Amendments to the Federal Law "On Fire Safety and the Administrative Offenses Code"

The amendments made by this Federal Law are intended to close legislative gaps in the field of ensuring fire safety, and to further develop the legal institutions of non-state oversight of compliance with fire safety requirements.

In particular, the Federal Law provides for the use of a risk-oriented approach when doing federal state fire oversight: a protected property or land plot is assigned a certain risk category, inter alia, in light of the results of independent fire risk assessment, if such assessment has been done.

The Federal Law also extends the list of those subjects to administrative liability for violating fire safety rules: fire risk assessment experts can now be held liable.

RF Ministry of Construction Decree No. 741/pr of April 25, 2017 "On Approval of the Form of the Land Plot Urban-Development Plan and the Procedure for Completing It"

Adopted in light of major changes to the town-planning legislation in 2016, this Decree approved a new form of the land plot urban-development plan (the "LPUDP").

The list of information to be stated in the LPUDP has been expanded as of July 1, 2017. Now the LPUDP shall contain inter alia information on whether a land plot (or part thereof) is located in zones with special site use conditions (sanitary-protection, preservation, etc.) and on the technical conditions for connecting the properties to utilities.

We note that the LPUDP is essentially an extract from an entire list of documents (the Land Use and Development Rules, the General Plan, Town-Planning Standards, site development plan/site survey plan, etc.) reflecting the parameters set in those documents. Without doubt, including such a scope of information from different sources in a single document makes it easier to do due diligence. However, the likelihood of an error also increases.

Federal Law No. 124-FZ of June 18, 2017 "On Amendments to Article 3 of the Federal Law "On Enactment of the RF Land Code" and the Federal Law "On Enactment of the RF Town-Planning Code" 

The effective date of the ban on engaging in town-planning activity without Land Use and Development Rules in a number of RF constituent entities, i.e., the city of Moscow, Moscow Region and municipalities in which land use and development rules had not been adopted by July 1, 2016 has been postponed to December 31, 2017.

So, it will be possible to engage in town-planning activity without approved land use and development rules, including to grant land plots with a main permitted use type providing for the construction of buildings and structures from state and municipally owned land up until December 31, 2017.

Changes in legislation on integrated site development

RF Government Resolution No. 577 of May 17, 2017 "On Approval of the Regulation on Declaring Capital Structures other than Apartment Houses Unsafe and Subject to Demolition for the Purposes of Taking a Decision on Integrated Site Development at the Initiative of Local Government Authorities"

This Regulation sets forth the procedure for declaring capital structures located on sites within which integrated development is planned as unsafe and subject to demolition.

The Regulation applies to capital structures other than apartment houses regardless of their form of ownership. We note that the grounds for declaring such capital structures unsafe and subject to demolition fully correspond to the grounds provided for by RF Government Resolution No. 47 of January 28, 2006 "On Approval of the Regulation on Declaring Premises Residential, Residential Premises Unsuitable for Habitation and an Apartment House Unsafe and Subject to Demolition or Reconstruction".

RF Government Resolution No. 594 of May 18, 2017 "On Approval of the Rules for Approving the Withdrawal for Municipal Needs for Integrated Site Development of Land Plots and/or the Immovable Properties Located Thereon Owned by the RF or an RF Constituent Entity within the Boundaries of a Site for which a Decision on Integrated Site Development Has Been Taken at the Initiative of Local Government Authorities"

The approved Rules set forth the procedure for approving the withdrawal for municipal needs of land plots and/or the immovable properties located thereon owned by the RF or an RF constituent entity within the boundaries of a site for which a decision on integrated site development has been taken at the initiative of local government authorities.

The relevant approval is done for plots and/or properties granted for permanent (unlimited) use, lifetime inheritable possession, lease or free use to individuals or legal entities.

Before taking a decision to withdraw, the local government authority sends a draft of the relevant decision for approval to the local office of the Federal Agency for State Property Management or to the competent executive authority of the RF constituent entity.

That said, the draft decision is considered approved if notices of approval or lack of approval are not received from the approving authorities for the draft decision within the established time period.

Clarifications of federal legislation

Ministry of Economic Development of Russia Letter No. OG-D23-2633 of March 14, 2017 "On the Procedure for State Registration of Rights to Immovable Property"

In its Letter the Ministry of Economic Development of Russia clarified that:

  1. the notarized consent of the other spouse is not required in order for a spouse to acquire ownership of the plot on which building owned by him/her is located;
  2. when a title/restriction/encumbrance arising on the basis of an act of a competent authority or transaction with a competent authority undergoes state registration, the authority acts as the representative of the person/entity in whose interests the registration is obtained. Accordingly, the person/entity is responsible for paying the registration duty, not the authority.

Ministry of Economic Development of Russia Letter No. OG-D23-3931 of April 5, 2017 "Regarding the Use of Information from the EGRN When Performing Cadastral Work and Entering Information on Previously Registered Real Estate Properties in the EGRN"

The question of whether to use an extract from the EGRN on a land plot or the cadastral map of a site, or a cadastral extract from the EGRN and a cadastral map of a site is resolved by the cadastral engineer based on the specific situation in which the cadastral work is being done.

Federal Tax Service of Russia Letter No. BS-4-21/7402@ of April 19, 2017 "On Calculating Land Tax if the Land Category and/or Permitted Use Type of a Land Plot Changes"

As a change in the category of land or its permitted use results in a change not only of the rate of land tax but also of the cadastral value, in its letter the Federal Tax Service set out guidelines for the tax authority in this instance:

a change in cadastral value that occurred in the current year as a result of land being transferred from one category to another, or a change of permitted use type may be taken into account starting from the next tax period;

when calculating the tax for a specific tax period the tax rate for the cadastral value based on the land category and/or permitted use type of the land plot as of January 1 of the tax period is used.

These rules apply to all cases where the permitted use type of a land plot changes in the course of the year, regardless of whether those changes were favorable or unfavorable to the taxpayer's situation.

Ministry of Economic Development of Russia Letter No. D23i-1881 of April 4, 2017 "Regarding the State Cadastral Inventory of an Immovable Property"

This Letter clarified some issues arising in the state registration of title to part of a real estate property. The following issues were considered, in particular:

  • in the event of a change in the configuration and area of part of the premises, a new part of the premises is formed, information about which, including its designation, must be stated in the technical layout;
  • cadastral inventory and state registration take place simultaneously, inter alia, in connection with the formation or termination of the existence of part of an immovable property affected by title restrictions and encumbrances of the relevant immovable property;
  • in the event an encumbrance over part of an immovable property terminates, that part is generally removed from the cadastral inventory at the same time termination of the encumbrance is registered;
  • other clarifications of a technical nature (how to complete and draw up an immovable property declaration, etc.).

Rosreestr Letter No. 14-04075-GE/17 of April 3, 2017 "On Terraced Houses"

This Letter clarified the procedure for forming a land plot under a terraced house and preparing the technical layout for such a house.

In particular, it is clarified that each unit of a terraced house should be situated on a separate land plot formed specifically for its use.

Ministry of Construction of Russia Letter No. 20993-KhM/09 of June 15, 2017 "On the Procedure for Applying the Provisions of the RF Town-Planning Code Regulating the Issuance of the Construction Permit"

The Ministry of Construction of Russia explained the new procedure for issuing construction permits.

According to the amendments made to the RF Town-Planning Code, the construction permit for a capital structure that is not a utility line confirms conformity of the design documentation to the requirements set forth, inter alia, in the site development plan/site survey plan.

The Ministry of Construction of Russia explained that when issuing a construction permit for a capital structure that is not a utility line conformity of the design documentation to the requirements of the site development plan/site survey plan is checked only if the capital structure is on a site slated for integrated and sustainable development, and also in the cases provided for by Article 41(3) of the RF Town-Planning Code.

Such clarifications are good news for those developers who were worried they would be bound by the requirements of "outdated" site development plan/site survey plan. However, they may not help some developers. For example, this may affect projects implemented in St. Petersburg if there are discrepancies between previously approved site development plans/site survey plans and amended land use and development rules.


St. Petersburg Law No. 209-38 of April 14, 2017 "On Amendments to the St. Petersburg Law "The Environmental Code of St. Petersburg" and on Repealing Certain Laws of St. Petersburg"

Amendments aimed at harmonizing regional legislation in this area to allocate powers among government authorities were made to the Environmental Code of St. Petersburg which entered into force on January 1, 2017 and governs relations in land use, environmental protection and ecological security in St. Petersburg.

Water relations were added to the Code's scope of regulation.

St. Petersburg Law No. 221-39 of April 19, 2017 "On Amendments to the St. Petersburg Law "On Strategic Investment Projects, Strategic Investors and Strategic Partners of St. Petersburg" and the St. Petersburg Law "On State Support for Investment Activity in St. Petersburg"

The amendments being made by this Law are aimed at clarifying the legal regulation of strategic investment projects in St. Petersburg.

It is determined that the list of highest priority areas of socio-economic development for St. Petersburg in which it is possible to implement strategic investment projects is exhaustive. That said, the differentiation of required amounts of investment for different areas of the economy (RUB 1 billion and RUB 2 billion) remains.

A new area for implementing strategic investment projects was introduced: reconstruction of facilities, including utility lines, intended for electricity, heating, gas and water supply, to free up the sites occupied by them and their protection zones and construction of capital structures1 on the vacated sites (aggregate investment of at least RUB 2 billion).

We note that in order to monitor the implementation of a strategic investment project, a strategic investment project agreement is also concluded between St. Petersburg and the strategic investor.

St. Petersburg Law No. 344-58 of June 14, 2017 "On Amendment of the St. Petersburg Law "On Town-Planning Activity in St. Petersburg"

The St. Petersburg Government was empowered to render decisions to demolish unauthorized construction through administrative proceedings according to Article 222(4) of the RF Civil Code.

News in public-private partnerships (PPP) and other forms of public-private cooperation (PPC)

RF Government Resolution No. 449 of April 15, 2017 "On Amendments to Certain Acts of the Russian Federation Government"

This Resolution makes changes to the basic principles of pricing for heating and water supply, and wastewater disposal.

For example, specifics are established in accounting for rent under a lease agreement of immovable property transferred by the public partner under a concession agreement to the private partner as "other expenses" when regulating rates using the method of economically justified expenses, and specifics of accounting for certain expenses of the private partner's (including for cadastral inventory and state registration of the public partner's ownership title) when regulating rates using the method of ensuring a return on invested capital.

The updated accounting procedure applies to legal relationships arising out of concession agreements concluded after January 1, 2017.

RF Government Resolution No. 484 of April 22, 2017 "On Approval of the Rules for Classing Depreciable Fixed Assets as Having Been Manufactured under the Terms of a Special Investment Contract"

According to the Resolution, taxpayers have the right to apply a depreciation multiplier in relation to depreciable fixed assets included in depreciation groups one to seven which were manufactured under the terms of a special investment contract.

The Resolution enters into force on January 1, 2018.

RF Government Order No. 794-r of April 26, 2017 "On Approval of the List of Documents Confirming the Fact and/or Circumstances of the Public Partner Acquiring Title to Unregistered Immovable Property"

The Order sets out the list of documents confirming the fact or circumstances of a public partner acquiring title to unregistered public utility real estate.

We remind readers that the existence of documents confirming the fact and/or circumstances of how the public partner acquired ownership title to unregistered public utility real estate is one of the necessary conditions for the public partner to transfer those facilities to the private partner when there is no information about them in the EGRN technically and functionally related to the facility covered by the concession agreement in heating supply, hot water supply, cold water supply and/or wastewater disposal.

RF Government Resolution No. 558 of May 11, 2017 "On the Specifics of Holding a Joint Tender for the Right to Enter into a Concession Agreement for Heating Supply Facilities, Centralized Hot Water Supply, Cold Water Supply and/or Wastewater Disposal Systems, and Separate Facilities of Those Systems"

The Resolution defines the specifics of holding a joint tender for the right to enter into a concession agreement for public utility infrastructure that is or will be owned by a municipality and/or RF constituent entity.

However, we remind readers that although the tender is a joint one, separate concession agreements are concluded with each public partner, not a single concession agreement for all such public utility infrastructure with the winner of the tender.

RF Government Resolution No. 563 of May 12, 2017 "On the Procedure and on the Grounds for Concluding Contracts for the Simultaneous Performance of Work for the Design, Construction and Commissioning of Capital Structures, and on Amendments to Certain Acts of the RF Government"

The Rules for concluding contracts for the simultaneous performance of work for the design, construction and commissioning of capital structures entered into force on July 1, 2017.

It was established, in particular, that a contract may be concluded if technology and pricing audit of the basis for investment in the creation of that facility have been done for the facility for which the contract will be concluded. The audit regulations and requirements to the makeup and content of investment justification were approved.

That said, the contractor cannot require an increase in the contract price, and the customer cannot require a decrease, including when it is not possible to envision the full scope of work or expenses when the contract is concluded.

RF Government Resolution No. 570 of May 15, 2017 "On Establishing the Types and Scope of Work for the Construction and Reconstruction of a Capital Structure which the Contractor Shall Perform Itself without Engaging Other Persons to Perform its Obligations under State and/or Municipal Contracts, and on Amendments to the Rules for Determining the Amount of the Fine Charged for Improper Performance by the Customer and Supplier (Contractor, Provider) of the Obligations Stipulated by the Contract (Except for Delay in Performance of Obligations by the Customer, Supplier (Contractor, Provider)) and the Amount of Penalty Charged for Each Day of Delay in Performance by the Supplier (Contractor, Provider) of the Obligation Stipulated by the Contract"

A new article was introduced to Federal Law No. 44-FZ in July 2016 concerning the specifics of entering into and performing a contract for design and/or survey works and contracts for the construction and reconstruction of capital structures.  Among other things, this article included the provision that the RF Government may determine the types and scope of work for the construction and reconstruction of capital structures which the contractor must perform itself without engaging other persons to perform its obligations under the contract.

The RF Government exercised this right: this Resolution determines the list of work which the contractor under a state (municipal) contract must perform itself. The list includes 34 types of work (including site works, earthworks, pile driving, foundation work, constructing load-bearing structures, etc.).

It was established that the cost of work performed by the contractor itself must be at least 15% (and as of July 1, 2018, at least 25%) of the contract price. That said, the contractor may choose the types and scope of work suitable for it to perform from the types of scope set forth in the procurement documentation.

In addition, the Resolution introduces liability in the form of a fine of 5% of the cost of the works for the contractor's improper performance of these obligations.

Thus, the Resolution substantially limits the possibility of unfair manipulation by contractors under state/municipal contracts, but it imposes certain limits on the ability to structure projects, including in lifecycle contracts.

RF Government Resolution No. 623 of May 24, 2017 "On the Procedure for Forming and Maintaining the List of Investment Projects the Implementation of Which Entitles Industrial Entities to Receive Financial Support before 2025 in the Form of Tax Incentives in Accordance with the Laws on Taxes and Levies"

This list includes investment projects implemented under a special investment contract concluded on behalf of the RF under an industrial policy law. The Ministry of Industry and Trade of Russia includes the information on the project in the list within three business days of execution of the special investment contract.

Legal precedents

Ruling of the RF Constitutional Court No. 10-P of March 28, 2017

The RF Constitutional Court checked the constitutionality of the provision of part 4.1 of Article 63 of the RF Town-Planning Code according to which the land use and development rules in Moscow, St. Petersburg and Sevastopol are approved by the highest executive authorities.

In the applicants' opinion, this provision resulted in a violation of the principle of separation of powers and is an undue invasion by the federal legislation in the regions' jurisdiction; however, the RF Constitutional Court disagreed with that position.

Overview of Legal Precedents in Cases of Establishing an Easement Over a Land Plot (approved by the Presidium of the RF Supreme Court on April 26, 2017)

The practice of establishing an easement has been summarized:

  • the owner of a land plot on which a utility line owned by another person constructed after the land plot became privately owned is located may file a request for an easement;
  • the easement may be established only if the owner of the land plot (immovable property) does not have another way of exercising its right to use its plot (property);
  • an easement cannot be established if its terms deprive the land plot's owner of the ability to use its plot for the permitted use;
  • if there is more than one way of walking or driving to the land plot across the neighboring land plot the court should proceed on the basis that it is necessary to ensure the balance of the parties' interests and establish the easement on the terms least onerous for the owner of the land plot over which the easement is being established;
  • the terms of the easement may envision a way of changing the fee. Each of the parties may file a claim with a court to change (increase or decrease) the fee amount in the event of a change in the scope of restrictions of title of the owner of the land plot encumbered by the easement.

These findings are not revolutionary. These provisions were already being used in the law enforcement practice when resolving disputes over the establishment of an easement.

Ruling of the North-West Circuit Commercial (Arbitrazh) Court of April 19, 2017 in case No. A56-37518/2016

In this case the court once again noted that a condition restricting the tenant's access to premises for late payment of rent is a measure of the tenant's additional civil-law liability. So, a tenant who is behind in paying rent must pay for the time when the tenant didn't have access to the premises under the agreement.


1 Clause 2 Article 2 of Federal Law No. 314-FZ On Amendments to Article 1294 of Part Four of the Russian Federation Civil Code and the Federal Law On the Contract System in the Procurement of Goods, Work and Services for State and Municipal Needs of July 3, 2016, Article 110.2 of Federal Law No. 44-FZ On the Contract System in the Procurement of Goods, Work and Services for State and Municipal Needs of April 5, 2013.

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These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

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