On 15.11.2022 the Plenum of the Supreme Court resolved to introduce into the State Duma a draft of amendments to the Code of Administrative Procedure of the Russian Federation (the CAS). The changes concern the challenging of breaches in the field of electoral law, the indexation of sums awarded, and the "digitalisation" of procedure. What interested us first of all were the changes to the procedure for challenging cadastral value.
From 1 January 2023 the procedure for challenging cadastral value provided for by Article 22 of Federal Law No. 237-FZ of 03.07.2016 "On State Cadastral Valuation" (the Law on State Cadastral Valuation) ceases to have effect. In its place, Article 22.1 of that law will apply. What will change?
The nature of the claim and the procedure for bringing it
Previously:
A) Cadastral value can be challenged in a commission (if one has been created by the constituent entity of the Russian Federation) or in court.
B) The commission is not a mandatory stage before an application to a court.
Now:
A) Cadastral value can be set at market value only in a budgetary institution.
B) A court can be applied to only with a claim challenging a decision of the budgetary institution.
The single claim "challenging the results of determining cadastral value" will now be divided into separate claims:
- challenging the results of determining cadastral value;
- challenging decisions of the commission for the consideration of disputes about the results of determining cadastral value;
- challenging actions (omissions) of that commission;
- challenging decisions of a budgetary institution on an application to set the cadastral value of a property at its market value;
- challenging decisions of a budgetary institution on the results of considering an application to correct errors made in determining cadastral value;
- challenging actions (omissions) of a budgetary institution in relation to those applications.
The CAS provides for the possibility of bringing, together with the claim under item 4, a claim to set the cadastral value of the property at its market value. In the context of the regulation provided for by the Law on State Cadastral Valuation, after considering the application the budgetary institution decides whether or not to set the cadastral value of the property at its market value (if the valuation report that was submitted was drawn up with breaches).
The law also regulates the legal consequences of a court finding unlawful a decision refusing to set the market value. In that case the budgetary institution is obliged to adopt a decision setting the market value on the corresponding application. A finding that the budgetary institution's refusal is unlawful therefore leads to the cadastral value being set at the market value on the basis of the valuation report. At the same time, bringing before the court, together with that claim, a claim to set the cadastral value at the market value implies that a court valuation expert examination will be held in the case, on the results of which the expert may determine the value at a different amount.
If the court finds the decision of the budgetary institution lawful, the claim to set the cadastral value at the market value will probably be granted on the basis of the expert's opinion. If the decision is found unlawful, the courts will refuse to grant the second claim. The court and the budgetary institution cannot both set the market value of the property. How this mechanism will work in 2023 will be shown by practice.
The pre-trial procedure
An administrative claim challenging the results of determining cadastral value, and challenging decisions and actions (omissions) of a budgetary institution, must meet the requirements of Articles 125 and 126 of the CAS. The claimant must state that the pre-trial procedure provided for by the "relevant" law has been complied with, and must attach copies of the documents that confirm it.
Despite the absence from the Law on State Cadastral Valuation of wording indicating that a pre-trial procedure is mandatory in cases on setting the cadastral value of a property at its market value, it appears that the general design and direction of the law assume that it is. The Law on State Cadastral Valuation does not provide for the possibility of applying to have cadastral value set at market value anywhere other than to a budgetary institution. In court, the only matter that can be considered is the decision of that institution adopted on the results of considering the application.
What "bonuses" do the changes give?
Time limits for a challenge
The Supreme Court proposes to systematise the hearing of cases challenging decisions of commissions and of budgetary institutions, by setting a time limit after which the right to seek judicial protection is lost. A claim challenging decisions of commissions and of budgetary institutions may now be brought within 3 months of the day on which the administrative claimant learned of the adoption of the decision by the commission or by the budgetary institution.
A city's right to challenge decisions
Bodies of local self-government and the authorities of cities of federal significance have the right to challenge decisions or actions (omissions) of the commission of a budgetary institution in respect of properties owned by other persons. Previously there was no such possibility, although precedents had occurred in the practice of the Moscow City Court. That practice now acquires a basis in legislation.
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