Federal Law No. 430-FZ of 21 December 2021 "On Amendments to Part One of the Civil Code of the Russian Federation" added to the Civil Code of the Russian Federation (the Civil Code) a new Chapter 17.1, "Ownership and other proprietary rights in buildings, structures, objects of unfinished construction, premises and parking spaces", which enters into force on 1 March 2023.
The changes bring together the existing approaches of the Russian courts to questions in the field of land and housing relations and of state registration of rights in real property.
The amendments do not define the particular features of how rights in real property arise, or the legal status of that property. The very fact that these provisions are brought together at the level of the Civil Code should, however, stabilise property dealings and remove inconsistent readings in the application of the Civil Code, the Land Code of the Russian Federation, the Housing Code of the Russian Federation, and other federal laws and subordinate legislation.
In particular, the amendments that have been adopted address the following questions:
The legislature has confirmed that ownership of items of real property arises in the owners of the land plot on which those items are located. Article 287.1 of the Civil Code, worded in this way, is fully consistent with the principle of the unity of fate of land plots and of the real property firmly attached to them, and it develops the meaning of Article 219 of the Civil Code, which is already in force.
The article separately notes that ownership of an item of real property also arises in persons to whom a land plot has been granted for use out of state or municipal ownership in order to create an immovable thing.
On a literal reading of the article, a lease of a land plot concluded between a state authority and a private person must therefore specify construction (the creation of an immovable thing) as the purpose for which the subject of the lease is granted.
This article is supplemented by paragraph 10 of Article 40 of Federal Law No. 218-FZ of 13 July 2015 "On State Registration of Real Estate" (the Registration Law), which provides that registration of ownership of created items of real property is carried out on the basis of a permit to commission the item of real property and a title document for the land plot on which that item is located.
Paragraph 2 of Article 278.2 of the Civil Code introduces the parties' right to determine, at their own discretion, the part of a building that is to be transferred into temporary possession and use. When leases whose subject is part of a building are registered, the parties are no longer bound to single out that subject of the lease by a separate cadastral registration.
Previously, in order to transfer part of a building into the possession and use of third parties, cadastral registration had to be carried out, with a technical plan filed with the registering authority. The registering authority then had to conduct a legal examination of the lease being concluded and to analyse the technical plan for compliance with the established requirements.
As a result of that excessive regulation, dealings in lease transactions were substantially restricted. If a building contained re-planning that had not been legalised, registration was difficult or impossible. Concluding contracts for a short term therefore became preferable, and economically justified, for parties to those dealings.
Amendments have now been made to the Registration Law under which, pursuant to paragraph 2 of Article 44, state cadastral registration of part of a building or structure is carried out without a technical plan being submitted if the Unified State Register of Real Estate (EGRN) contains information on all the premises located in the building, and a lease of the building has been submitted for state registration of rights providing for a right of possession and use of a part of the building consisting of one or more premises that have common structural elements (adjacent rooms within a premise) and are located within a floor, or floors, of the building.
The Registration Law, in the part described above, has therefore already been brought into line with the changes to the Civil Code.
In Article 287.3 of the Civil Code the legislature has once again set down the provisions of Article 271 of the Civil Code and of Article 35 of the Land Code of the Russian Federation, on the right of the owner of a building to use the land plot to the extent necessary for the owner to have access to the building, where the land plot on which the building stands belongs to another person.
The article contains a new rule: the owner of a building located on another person's land plot does not lose the building owner's right in the land plot even if the building is accidentally destroyed, unless the contract or the law provides otherwise. The owner of the destroyed building has the right to restore it in the manner determined by law, if the owner begins to restore the lost building within 5 years of its destruction.
A number of rules have also been introduced into the Civil Code on the particular features of ownership of a premise, the composition of the common property of the owners, and the power of administrative bodies to terminate rights in a premise that is kept in a state of neglect (Articles 287.4-287.7 of the Civil Code). These provisions refer for the most part to the Housing Code of the Russian Federation as regards the procedure for using premises and the determination of the legal status of the common property of the owners of those premises.
Thus, at the level of civil legislation, a prohibition is established on the use of premises contrary to their functional purpose, and a prohibition on the use of a residential premise otherwise than for citizens to live in, except where that premise is converted to non-residential status in the manner established by the Housing Code of the Russian Federation. The amendments also determine the composition of the common property.
Article 287.7 of the Civil Code has strengthened administrative bodies in their dealings with owners of premises who act in bad faith and who systematically infringe the rights and interests of neighbours, or who allow a premise to fall into ruin.
This rule is aimed at inducing owners to perform their obligation to maintain the item of real property properly.
The competent authority will be able to:
- issue a warning of the need to remedy the breach;
- set the owner a proportionate time for repair of the premise;
- apply to a court with a claim for the property to be sold at auction in the event of a wilful breach of the rights of third parties and a threat to their life, health and safety.
The articles under discussion have therefore covered a wide range of questions from different fields of legislative regulation, bringing them into a more uniform format in which they are consistent with one another. At the same time, legislative gaps that were previously filled by case law have been closed.
The Civil Code has undergone changes of a more targeted kind than had originally been expected, but we expect a positive effect on parties to civil dealings and on the work of the courts once the changes enter into force. In addition, the amendments that have been adopted make it possible to form new approaches to the legal regulation of proprietary rights and to guarantee parties to those dealings greater protection of their rights.
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