Converting a dwelling into commercial premises is now harder

Amendments to the Housing Code of the Russian Federation made by Federal Law No. 116-FZ of 29.05.2019 have made it harder to convert a dwelling into non-residential (commercial) premises. The changes concern the obtaining of consent from the owners of premises in an apartment building to convert premises from residential to non-residential use, and the requirements for drawing up the minutes of meetings of owners of premises in apartment buildings. If one judges the scale of the changes, they have not merely made the procedure for converting a dwelling into non-residential premises more difficult. For some, they have made that conversion impossible altogether.

The main changes are:

1. The consent of a majority of the owners of premises in an apartment building to the conversion of a dwelling into non-residential premises;

2. The mandatory obtaining of consent from each owner of premises adjoining the premises being converted;

3. After the premises are converted from residential to non-residential use, access to them through the premises that provide access to the dwellings must be excluded;

4. Changes to the Requirements for drawing up the minutes of meetings of owners of premises in apartment buildings.

To carry on a business in a residential flat, the owner has to go through a fairly long and difficult procedure to convert the dwelling into non-residential premises. This article sets out the procedure for converting a dwelling into non-residential premises, taking account of the latest amendments to the law.

To convert a dwelling into non-residential premises, the owner must do the following.

Stage 1.

Assess the legislation in force, and legislative initiatives to ban the siting, in apartment buildings, of facilities for certain types of activity, so as to exclude the risk that the planned activity cannot be carried on in the premises being converted.

Stage 2.

Assess whether it is technically possible to convert the premises to non-residential use. A mandatory condition of such a conversion is that a separate entrance can be provided to the premises, not connected with the entrance to the dwellings or to the premises that provide passage to the dwellings. After the conversion, any possibility of access from the premises to the dwellings must be excluded entirely (in practice, there must be no doorways leading onto the stairwell of the entrance).

Stage 3.

Assess whether a new entrance group can be provided for the non-residential premises. In some situations problems may arise, connected with the legal regime of the land plot on which the building stands, or with the consent of the owners living in the apartment building to the erection of a porch.

Stage 4.

Obtain the consent of the owners of premises in the apartment building to the conversion of the dwelling into non-residential premises. This is the main change, and it makes the procedure substantially harder. We will look at it in more detail.

As well as the consent of a majority of the owners of premises, written consent must first be obtained from each owner of premises adjoining the premises being converted. Premises are adjoining, for this purpose, if they share a wall with the premises being converted, or if they lie directly above or below the premises being converted.

Once the owners of the adjoining premises have given consent, the consent of a majority of the owners of premises in the apartment building must be obtained, by a vote at a general meeting of the residents.

The number of participants sufficient for the meeting to be competent to decide on the conversion of premises from residential to non-residential use:

One entrance	More than one entrance
More than 2/3 of the total number of votes of the owners of premises	More than 50% of the total number of votes of the owners of premises, including more than 2/3 of the votes of the owners of premises in the entrance in which the conversion of the premises to non-residential use is planned

The number of votes required to approve the conversion of a dwelling into non-residential premises:

One entrance	More than one entrance
More than 50% of the votes of the owners among those who took part in the vote	More than 50% of the votes of the owners among those who took part in the vote, and also more than 50% of the votes of the owners of premises in the entrance in which the conversion is planned

The greatest difficulty in converting premises is holding the general meeting. Problems arise at the very start of organising the general meeting, at the stage of giving notice of it. In addition, the minutes, which must now be submitted to the state body that carries out the conversion of premises, are often drawn up in breach of the requirements of the legislation in force. One should also not forget the ordinary abuse of rights by the owners of premises from whom consent must now be obtained.

Stage 5.

File the documents for the conversion of the premises with the local self-government body that carries out conversions of premises, or with a multifunctional centre (MFC).

The documents are:

1) an application for the conversion of the premises;

2) title documents for the premises being converted (originals, or copies certified by a notary);

3) a plan of the premises being converted, with a technical description of them (if the premises being converted are residential, the technical passport of those premises);

4) a floor plan of the building in which the premises being converted are located;

5) a design for the refurbishment and/or re-planning of the premises being converted, prepared and drawn up in the prescribed manner (if refurbishment and/or re-planning is required in order to ensure that the premises can be used as residential or non-residential premises);

6) the minutes of the general meeting of owners of premises in the apartment building, containing the decision on their consent to the conversion of the dwelling into non-residential premises, and complying with the requirements approved by Order of the Ministry of Construction of Russia No. 44/pr of 28.01.2019;

7) the consent of each owner of all premises adjoining the premises being converted to the conversion of the dwelling into non-residential premises, stating the owner's particulars (the full name and passport details of an individual, or the full name and primary state registration number (OGRN) of a legal entity), the number of the premises that belong to the owner, and the details of the documents confirming title.

Stage 6.

If a design for the refurbishment and/or re-planning of the premises is prepared and filed with the body that carries out the conversion, proper performance of those works is confirmed by a certificate of the acceptance commission accepting the completed works of refurbishment and/or re-planning of the premises.

The certificate of the acceptance commission confirms that the conversion of the premises is complete, and is the basis for using the converted premises as non-residential (commercial) premises.

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