A decision of the Supreme Court of the Russian Federation in a citizen's bankruptcy case deals with unregistered objects on land plots that had been put up for auction.
The focus is on the fact that the financial manager, taking no account of the unregistered buildings, set the starting price of the lots for the land plots only.
• The court of first instance declared the auction invalid, because the buildings could have increased the value of the property and so satisfied the creditors' claims to a greater extent.
• The court of appeal set aside that decision and concluded that the buildings in dispute had to be treated as ancillary outbuildings, which are an appurtenance of the land plot and follow the principal thing.
The Supreme Court, while upholding the decision of the court of appeal, did not agree with its legal assessment of the buildings as appurtenant to the principal thing, the land plot. The court explained that, since an unregistered building has not been brought into circulation as an item of immovable property, it cannot be a thing. The risk that legalisation of such objects will be refused lies with the buyer.
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