September 19, 2019

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Real Estate Law in Russia

Article 9 of the Constitution of the Russian Federation entrenches the principle of private land ownership in Russian law. For some time, however, the mechanisms of private land ownership were not put in place until enactment in 2001 of The Land Code of the Russian Federation, which lays out the procedure to be followed in order to transfer state-owned land to private entities. It also gives owners of buildings on plots of land the right to purchase the land on which their buildings stand.

Following is more information on real estate law in Russia.

Ownership rights under the Land Code

The Land Code fleshes out the ownership rights that were allowed under the Constitution but were never officially created. The Land Code now allows ownership of land by persons and legal entities, as well as the state. It brings into being the different tenures of ownership which can be perpetual, of fixed terms, or for a lifetime. It also allows for leases and easements.

Privatization of state-owned land

One of the most important aspects of the Land Code is its provision for the privatization of state-owned land.  In particular, the Land Code lays out the procedure for acquisition of state-owned land to be subjected to new developments.

The land must first be demarcated and equipped for acquisition. This means its boundaries must be demarcated and it must be assigned cadastral or lot numbers. It must also be determined how utilities are to be supplied. Under the Land Code, land that has been prepared for acquisition can either be acquired for ownership by a private registered proprietor or leased.

Owners of existing buildings

Registered proprietors of existing buildings may be able to privatize or obtain a lease from the state over the land on which these existing buildings are situated.

Alternatively, land can be acquired even if it has not been prepared for acquisition as described above. This typically occurs when a new development is proposed for the land and such development necessitates an assessment of the land from a technical, ecological, architectural, and sanitary perspective. Such land can only be leased by the state to individuals and legal entities

Purchasing a building

Russian citizens, Russian legal entities and foreign nationals and legal entities are allowed under Russian law to become the registered proprietors of buildings. The Civil Code sets out the regulations pertaining to the transfer of buildings.

An ownership certificate will be issued to the registered proprietors of buildings in Russia following registration with the state.

State cadastral registration is required for all land before a valid sale and purchase of the land in question can take place. Federal Law No. 28-FZ on the State Land Cadastre, otherwise known as the Land Cadastre Law, sets out the procedure for such registration.

Leasing

Russian and foreign nationals or legal entities are also given the option to lease land or buildings from the state, commonly for a term of 49 years or less. Rights of and restrictions placed on the lessees of such land are set out in the Civil Code and the Land Code.

State Registration

All transfers and all leases of one year or more must be registered with the state in order to be recognized under Russian law. Land rights are unenforceable under Russian law unless they have been duly registered with the relevant registry.