Russian Federation: Real Estate News

Last Updated: 21 November 2018
Article by Thomas Mundry and Asia Takhtaeva

1 INTRODUCTION

In the past three months amendments to the real estate laws of the Russian Federation have taken effect which improve legal certainty for investors in Russian real estate: The legislator has established a reliable basis for the construction and operation of linear infrastructure (e.g. power lines, telecommunication lines, roads, railway lines and pipelines) ("Linear Infrastructure") on private and public land. Furthermore, it has substantially amended the legal basis for demolishing and legalizing buildings which were constructed in breach of the relevant laws of the Russian Federation.

2 PUBLIC EASEMENTS FOR LINEAR INFRASTRUCTURE

2.1 General

With effect from 1 September 2018, the Russian legislator has enabled the competent federal or local government bodies (except for Rosavtodor regarding buildings for crossings of motor roads and railway lines, the competent bodies are not yet determined) to establish a public easement ("Easement") on public and private land plots upon application and for the benefit of a state or private legal entity (e.g. a legal entity dealing with natural monopolies, communication or public transport) ("Beneficiary") for the construction and operation of Linear Infrastructure.

2.2 Procedure for Establishment

After the decision on the construction of the Linear Infrastructure and charging the land plots needed for its construction ("Land Plots") with an Easement is taken, the Easements will be registered with the Unified State Register of Immovable Property, and, within one month after registration, the Beneficiary and each of the owners of the Land Plots ("Land Owner") have to enter into an Easement agreement (suggested by the Beneficiary) which defines the Easement term, the amount of the Easement fee and other obligations of the parties. However, even if a Land Owner does not agree with the terms of the Easement agreement, the Beneficiary is entitled to pay the Easement fee to a notarial escrow account and exercise the rights out of the Easement.

Easements cannot be established in regard to Land Plots granted to citizens for private housing and gardening except for connecting objects on such land to general utilities. There are special requirements for establishing Easements on agricultural Land Plots.

2.3 Rights of Land Owners

The rights of Land Owners against the establishment of the Easement are limited to the following:

  • challenging the decision on the establishment of an Easement, if it breaches the law and infringes the rights of the respective Land Owner, within thirty days since the date of receipt of the draft easement agreement;
  • requiring the Beneficiary to purchase the Land Plot for a price equivalent to the market value of the Land Plot and reimburse him for the losses suffered if the performance of the Easement significantly impedes the use of the Land Plot (for more than three months regarding Land Plots with residential buildings and for more than one year for other Land Plots);
  • requiring the Beneficiary to agree on certain conditions of the Easement agreement if the Land Owner has not agreed on the terms of the Easement agreement and the Beneficiary has exercised the Easement and paid the Easement fee into a notarial escrow account;
  • demanding in court proceedings the termination of the Easement on certain grounds defined by the law (e.g. breach of procedure on the establishment of the Easement, change of location of the linear infrastructure on new area planning schemes or the Beneficiary's breach of the legal requirements on the exercise of the Easement.

3 NEWS ON UNAUTHORISED CONSTRUCTION

3.1 Previous Laws and Practice

Under the previous laws an unauthorised building ("Unauthorised Building") had to be demolished by the builder either voluntarily or upon a decision of the competent court ("Court") or the competent local body ("Local Body"). It could be retained upon a decision of the Court only in the following events:

  • the builder was the owner or proprietor of the land under the Unauthorised Building and
  • the Unauthorised Building complied with all legal requirements and was not in breach with any rights of other persons.

The Local Body could take a decision on demolishing only if the land plot under the Unauthorised Building was not duly granted and this land plot was located (1) within the boundaries of a zone with special terms of use (e.g. sanitary protection zone, water conservation zone, etc.) or (2) in the territory of public use or (3) right of way of infrastructure facilities. In all other cases the decision on demolition had to be taken by the Court.

However, in practice the Local Bodies abused their powers and made the decisions to demolish the Unauthorised Buildings upon requests of owners of infrastructure facilities. In many cases the Unauthorised Buildings were properly built, but located within the boundaries of zones with special terms of use where construction was not permitted. Their owners did not know about the restriction because the official scheme of such zones was not published. Nevertheless, due to violation of the restriction, duly constructed buildings were considered to be Unauthorised Buildings and should be demolished.

3.2 Subject of New Laws

3.2.1 General

On 4 August 2018 amendments to the civil and urban laws have taken effect which introduce a new structure for demolishing or legalizing and retaining Unauthorised Buildings. The new structure is aimed at:

  • restricting the powers of the Local Bodies by limiting the cases in which the Local Body may take a decision on the demolition or on the reconstruction of an Unauthorised Building.
  • extending the options for legalizing and retaining Unauthorised Buildings by defining cases in which an Unauthorised Building may be legalized, i.e. reconstructed to bring it in line with the requirements of Russian urban planning laws.

3.2.2 Decision on Demolition or Reconstruction by Court

Under the new laws only a Court may take a decision on demolition or reconstruction with subsequent legalisation ("Reconstruction") if:

  • the Unauthorised Building is located on private land (except when retaining such building poses a threat to life);
  • the ownership to the Unauthorised Building has already been registered with the Unified State Register of Immovable Property or has been acknowledged by Court;
  • the Unauthorised Building is a block of flats or residential premises or a religious facility etc.

3.2.3 Decision on Demolition or Reconstruction by Local Body

The new law sets forth that an Unauthorised Building may be demolished by the Local Body only if:

  • the land plot under the Unauthorised Building was not duly granted or
  • the land plot was located in a territory of public use and its permitted use did not include construction of such building.
  • the Local Body may take a decision on the Reconstruction of an Unauthorised Building, if:
  • there is no construction permit with regard to the Unauthorised Building or
  • the land plot under the Unauthorised Building is located within the boundaries of the zone with special terms of use and its mode does not allow construction of such building on it.

3.2.4 Performance of Demolition or Reconstruction

Demolition or Reconstruction must be performed within the term mentioned in the relevant decision. If ruled by the Local Body, the term for the demolition may be between three to twelve months and the term for the reconstruction between six months and three years.

Usually, demolition or Reconstruction must be performed by the builder of the Unauthorised Building. However, if the builder cannot be found demolition or Reconstruction may be carried out by the owner or user of the land thereunder. If these persons are also not available, the local government body or, in the event of governmental or municipal buildings, the respective land tenant may perform the Reconstruction. In the event of Reconstruction, the respective person is entitled to become the owner of the Unauthorised Building.

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

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.

By clicking Register you state you have read and agree to our Terms and Conditions