The Town Planning Code of the Russian Federation does not define an "ancillary-use facility". That has given rise to a number of legal disputes, in the course of which the courts have formed criteria for an ancillary facility:
01 The facilities belong to the class of structures of a reduced level of responsibility.
02 There is no permit documentation for construction, and there is a principal facility which the structure was built to serve.
03 The facility cannot be used independently for another activity.
These positions can be found in the ruling of the Supreme Court of 25.06.2019 No. 308-ES19-9028 in case No. A32-33264/2018, and in the ruling of the Judicial Chamber for Economic Disputes of the Supreme Court of 14.12.2021 No. 302-ES21-14414 in case No. A19-19018/2019.
The Ministry of Construction of Russia set out its position on this question in a letter of 16 March 2020 No. 9394-DV/08:
- since ancillary-use facilities should be understood as facilities intended to serve and operate the principal facility, and as having no possibility of independent use for another activity, it appears that such facilities may be erected where the land plot already contains the principal facility which the ancillary-use facility is planned to serve;
- where an authorised body or organisation has issued a construction permit for the principal facility, the developer may itself determine the order in which facilities are built on the plot (in particular, it may build the ancillary-use facility before the principal one, in accordance with the design documentation).
The characteristic of an ancillary-use facility is therefore its function of serving the principal facility. In other words, things between which a link of that kind exists are treated as a principal thing and an accessory (Article 135 of the Civil Code).
If a facility meets these criteria, title to it can be registered by a simplified procedure: on the basis of a declaration on the property, and without submitting the initial permit documentation.
It must be borne in mind that registration of title to an ancillary property, without the principal facility having been erected, does not give rise to a right to use, or to buy out, a land plot that is in public ownership, for the purposes of Article 39.20 of the Land Code of the Russian Federation.
Let us take case No. A19-19018/2019.
The Administration of the city of Irkutsk and the company entered into a lease of a land plot. Under the terms, the land plots are provided to the company for the construction and subsequent operation of an office building.
On the plot the company erected ancillary facilities, security posts of 48 and 52 sq m, and registered title. The tenant of the land plot applied to the relevant ministry for the land plots on which these ancillary facilities are located to be granted to it in ownership for a payment, relying on Article 39.20 of the Land Code of the Russian Federation. The application was granted, and a sale contract was concluded with the company.
After 6 months the company demolished the security posts and cancelled the entry recording its title.
Later the Administration of the city of Irkutsk went to court seeking a declaration that the sale contract for the land plot was invalid, and application of the consequences of the invalidity of that transaction.
The claimant stated that the properties are not ancillary, because they were erected in the absence of a principal facility. They were also built in breach of the terms of the leases of the land plots and of their designated purpose.
The court of first instance refused to grant the claims. The appellate and cassation instances upheld the court's conclusions. The Supreme Court disagreed with them. It held that the erection on a publicly owned land plot of only an ancillary-use facility, including where title to that facility has been registered by the state, and in the absence of a principal building or structure, does not give rise to a right to acquire the land plot into ownership by the procedure provided for in clause 1 of Article 39.20 of the Land Code of the Russian Federation.
The Supreme Court's approach is the fairest and the best justified, because there are cases in which an interested person, buying out a land plot while it has only minimal development on it, suspends construction or drags it out substantially. Why does this happen?
First of all, it is connected with the absence of incentives in the form of sanctions that may be applied to the developer under the lease of the land plot.
In addition, once a person buys the land plot and becomes its owner, that person is no longer bound by contractual obligations as regards observance of the designated use of the land plot. Those obligations could have led to penalties, to termination of the lease, and to the land plot passing out of the person's possession.
When the question is considered of an owner of a property acquiring the plot on which that property is located, the assessment of whether the facility is proportionate to the area of the plot deserves separate attention. Otherwise, if the built-up area turns out to be substantially smaller, there is a risk that the buy-out will be refused.
The result is that, despite the practice that has been developed for defining the criteria of ancillary-use facilities, a number of questions are still open and give rise to disputes in court. A clear definition of the criteria in a regulatory legal act would help to reduce the burden on the courts and to define the scope of the rights of interested persons in the plots that belong to them.
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