The Law on Garage Associations and other legislative amendments

Pepeliaev Group advises that the Federal Law[1] has been adopted, which continues the reform of the legal regulation of common ownership with regard to garage associations and specifies rules for their management (the “Law”).

The Law will take effect on 1 October 2023.

Garage associations and common property

Within the framework of the regulation of common property of real estate owners, article 287.5 of the Russian Civil Code and Federal Law No. 476-FZ dated 30 December 2021 were adopted with regard to common property of cottage communities.

Further, the Law introduces a special regulation for owners of garages and car parking spaces. The Law defines the concepts of a ‘territory designated as a garage’, a ‘garage’ and a ‘garage complex’.

What constitutes common property within the boundaries of a territory designated as a garage and in a garage complex has been regulated. By default, by virtue of the law, such common property will be in the common shared ownership of owners of garages and car parking spaces.

Management of a garage association

Methods for managing common property are similar to those used for managing a block of flats. The quantity of votes depends on the area belonging to the owner (article 22(3) of the Law).

Management methods include:

• Direct managements. Owners resolve collectively on the management of common property if the number of owners does not exceed 30 people (articles 18(3)-18(5) of the Law). Management is performed through entering into agreements based on a resolution of the general meeting.
  
• A Real Estate Owners Association (“REOA”) The Law specifies the regulation of REOAs. For example, owners of real estate facilities (to manage which the REOA was created) make two types of contributions: membership contributions (aimed at payment of taxes and levies, improvements, etc.) and special purpose contributions (for creating or purchasing real estate facilities, paying expenses on the preparation of documents regarding the planning of the territory, or implementing other decisions of the general meeting) (article 26 of the Law).A management company. 
  
• A management company is responsible to owners of car parking spaces for providing all services and/or performing work which ensures the proper condition of the common property in a garage complex (article 18(1)(3) of the Law).

Provision of the land plot

The Law specifies the procedure for creating a land plot for a garage association, namely:

• According to the general rule the location of the boundaries of a territory designated as a garage is determined based on the design project for the area survey (article 3(1) of the Law);
• If as at 1 October 2023 the design project for the area survey is not approved, the boundaries of the territory designated as a garage are recognised as the boundaries of the land which was granted to or in any other way provided for garage construction and/or for the placement of garages before the date when the Law comes into force (article 34(2) of the Law);
• it is possible to acquire a land plot free of charge within the framework of the ‘garage amnesty’ without approving the design project for the area survey (article 30(2)(c) of the Law);
• Owners of car parking spaces or non-residential premises in the garage complex receive an exclusive right to acquire land plots into ownership or to rent them under the general procedure provided for by article 39.20 of the Land Code (article 29(3) of the Law).

Other changes in legislation

The Law changes the procedure of issue of the certificates of right to the inheritance which is provided for by the Fundamental Principles of Russian Legislation on the Notarial Profession.

In particular, if a land plot is provided under a permanent (indefinite) right of use or under lifetime possession of them with hereditary succession before the Russian Land Code came into force, this means that when the land plot is inherited, a notary, before issuing a certificate of the right to an inheritance, enters information about this in the Federal Resource (article 28 of the Law). The notary issues a certificate of inheritance in the absence of notifications from the authorities that it is impossible to find such a land plot in private ownership.

What to think about and what to do

The new regulation will allow the use of garages and car parking spaces, as well as the use of common property of garage associations, to be more organised.  When a land plot is inherited, it is reasonable to check whether the notary complied with the complicated procedure for issuing a certificate of a right to an inheritance, which may help avoid disputes in the future.

We recommend that those who plan to construct garages or garage complexes, or to acquire garages or car parking spaces, conduct due diligence.

Help from your adviser

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

Our range of services includes advising on sale and purchase issues and closing other transactions with real estate, analysing risks associated with transactions involving real estate items, representing companies in their interactions with state authorities and in court, and conducting legal due diligence of real estate items.

---

[1] Federal Law No. 338-FZ “On garage associations and on amending individual items of the legislation of the Russian Federation” dated 24 July 2023.