Amendments to the Russian Civil Code on immovable things have come into force

Pepeliaev Group advises that, on 1 September 2022, Federal Law No. 430-FZ “On amending Part I of the Civil Code of the Russian Federation” dated 21 December 2021 (“Law No. 430-FZ”) came into force with respect to the legal regulation of immovable things.

Law No. 430-FZ supplements the Russian Civil Code with two new chapters:

  • chapter 6.1, which is dedicated to immovable things; and

  • chapter 17.1, which contains provisions on the ownership title and other rights in rem to buildings, structures, items of construction in progress, premises and car parking places.

The specified amendments constitute another part of the reform of the Russian Civil Code that started in 2012 when draft law No. 47538-6 was put before the State Duma. After the first reading it was decided to reform the Russian Civil Code part by part, and out of the extensive draft of the reform the block concerning a right in rem remained unimplemented for a long time.  The least contentious provisions of this block, in a form that was somewhat altered, were adopted by Law No. 430-FZ. 

The new provisions, in particular, clarify the rules on various real estate items and the common property of the owners of the premises and car parking places, provide for an opportunity to lease out parts of a building and premises, regulate the legal relationships between the holders of rights to a land plot and the real estate item located on it. 

Among other things, special attention should be paid to the rule that prohibits premises from being formed in items under construction.  Probably, this provision is aimed at changing the practice of the courts of general jurisdiction that acknowledge that the buyers of premises in items under construction have ownership title to such premises.  

For more details on the legal new developments contained in Law No. 430-FZ please see this alert of Pepeliaev Group.

The initial version of Law No. 430-FZ provided that it would come into force on 1 March 2023.[1] However, on 28 June 2022 Federal Law No. 185-FZ “On amending individual items of Russian legislation” (“Law No. 185-FZ”) was published, which brought forward the coming into force of amendments on immovable things to an earlier date, 1 September 2022.

The Explanatory Note to Law No. 185-FZ does not directly specify the reason why the date was moved. At the same time, it points out that Law No. 430-FZ should increase the efficiency of the regulation of property relationships of an unlimited number of persons in the Russian system of justice, and the federal executive authorities are ready to immediately implement its provisions. 

What to think about and what to do

The amendments which were passed affect a wide range of parties to business transactions. We recommend that you familiarise yourself with the new provisions and consider them in your current business activities, apply them when you are consummating or planning real estate transactions, and devising legal positions for disputes involving ownership title to real estate.

Help from your adviser

Pepeliaev Group’s experts provide comprehensive legal support to parties to transactions with real estate.

Pepeliaev Group’s range of services includes advising on sale and purchase issues and closing other transactions with real estate items, analysing risks associated with a particular real estate item, representing the companies in their interactions with state authorities, conducting legal due diligence of real estate items and providing legal support in court disputes on real estate. 

[1] Except for the rule that allows an authorised body to apply to the court with a claim to acknowledge the right of municipal ownership to an abandoned linear facility after the expiry of three months from the date when such facility is registered. This rule came into force on 21 December 2021.

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