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A law has been adopted that prohibits the provision of hotel services in residential premises of apartment buildings from 1 October 2019

26.04.2019
3 min read
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On 1 October 2019 the amendments to the Russian Housing Code (the “Housing Code”) will come into force. These amendments have been made pursuant to Federal Law No. 59-FZ dated 15 April 2019[1], which prohibits the use of residential premises in an apartment building for the provision of hotel services.

Currently a significant number of mini-hotels (hostels) carry out their activities in apartment buildings. Some such mini-hotels are located in residential premises of an apartment building, namely in apartments. 

At the same time:
  • The Russian Civil Code establishes that residential premises are designated for people to live in. Companies, institutions, and/or organisations may be located in residential premises only after such premises have been reclassified as non-residential premises[2];
  • The Housing Code contains a provision that residential premises may be used for the activities of an individual entrepreneur, but only by persons who lawfully reside in the premises[3].
Before the above Federal Law was adopted legislation provided for no direct imperative prohibition on the provision of hotel services in residential premises of an apartment building.

The draft law aiming at prohibiting any hotel activity in apartments was submitted to the State Duma in September 2015. This draft law was assessed negatively by the Russian Government and the Russian Public Chamber owing to the negative impact on the development of the tourism industry. However, the final version of the law approved by the Federation Council totally prohibits the provision of hotel services in apartments. This prohibition comes into force on 1 October 2019[4]. 

At the same time, the adopted law does not prohibit the owners of non-residential premises in apartment buildings from locating mini-hotels in such premises and does not restrict the right of owners of apartments to rent out their apartments for residential purposes under agreements for the leasing out of residential premises.

Implications for companies

Owing to the adoption of the above Federal Law, persons who provide hotel services in apartments located in apartment buildings are obliged to terminate the corresponding activity not later than 1 October 2019. The subsequent provision of hotel services in compliance with the provisions of current legislation is possible only if an apartment is reclassified as non-residential premises. This is allowed if such an apartment is located on the ground floor of an apartment building or higher provided that all the premises located directly under the apartment to be reclassified as non-residential premises are also non-residential[5].

If the prohibition on the provision of hotel services is violated, then a claim to oblige the defendant to eliminate the violation of housing legislation can be filed against the person providing such hotel services by an interested party (a supervisory authority, a citizen residing at the apartment building).

Help from your adviser

Pepeliaev Group's lawyers will readily provide the necessary legal support for all issues relating to the activity of mini-hotels (hostels) in apartment buildings, and in connection with claims of supervisory authorities against persons providing hotel services.

_____________________________
  1. http://sozd.duma.gov.ru/bill/876688-6.
  2. Articles 288(2) and 288(3) of the Civil Code.
  3. Article 17(2) of the Housing Code.
  4. Article 2 of Federal Law No. 59-FZ “On amending article 17 of the Russian Housing Code” dated 15 April 2019.
  5. Article 22(3) of the Housing Code.

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