They will be allowed to renew leases without a tender
Entrepreneurs' problems with renewing leases of premises in state and municipal buildings may be resolved before the end of the year. The amendments to the competition law that are needed for this have been approved for a first reading in the State Duma. Without them, tens of thousands of small and medium-sized business people across the country are at risk of ruin.
The State Duma Committee on Economic Policy, Industry, Innovative Development and Entrepreneurship has approved, and has recommended for adoption at first reading, a bill amending Article 17.1 of the Law "On the Protection of Competition". Anna Gorshkova, chief adviser to the committee's apparatus, told Kommersant. The bill puts in order the procedure for concluding, for a new term, leases of state and municipal property, whether the contracts were concluded following a tender or without one.
According to Ms Gorshkova, the first reading is planned for a plenary sitting of the State Duma scheduled for Tuesday. A Kommersant source close to the drafter of the document says that, once the committee has approved the bill, its adoption is certain. Rachik Petrosyan, deputy head of the Federal Antimonopoly Service, told Kommersant that the bill has been agreed with all the interested authorities and with the professional community. "At present the owners of property, making use of the scope for a dual reading of Article 17.1, are putting entrepreneurs' businesses at risk," the official noted.
The Civil Code gives a bona fide tenant of state property a pre-emptive right to renew the lease. In the middle of 2017, however, in hearing a dispute between the state unitary enterprise "Directorate for the Operation of Buildings, Engineering Structures and Communications" and Firma MS Consulting, a limited liability company, the Supreme Court held that only those tenants who concluded the current contract as a result of a tender may use that right.
At the beginning of the year Opora Russia reported that, because of the Supreme Court's decision, tens of thousands of representatives of small and medium-sized business across the country were at risk of ruin. "It means that the premises have to be vacated, put back into their original condition, and left unoccupied until the results of a tender, which another tenant may win. And if I win, the refurbishment will have to be done again," one business person complains to Kommersant. According to Alexey Nebolsin, a member of the presidium of Opora Russia, in order to cut costs entrepreneurs agreed to extend the lease for an indefinite term. "But that wording does not allow a licence to be renewed, for example a licence to sell alcohol, and that creates problems for shops and for catering establishments," he says. On Opora Russia's estimate, state and municipal property accounts for about 30% of premises that are leased.
The amendments approved by the committee allow every entrepreneur to renew a contract. That is convenient both for the owners of the property and for the entrepreneurs, Sergei Pivovarchik, managing partner of Consul Group, is convinced. The average term of a lease is three to five years. The owner of a dental clinic says that the cost of the refurbishment and of buying the equipment pays for itself in six years.
Over that time the tenant builds a business, creates a body of customers and takes part in shaping the urban environment,
- Mr Pivovarchik agrees.
In his words, the alternative to a bona fide tenant is often a fictitious buyer of the lease rights, who risks only the security payment.
Having won the tender, he looks for a real tenant and offers to sell the limited liability company that won the tender. If he finds no one, he simply abandons the company, without performing the contract,
- the expert concludes.
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