Legal alerts / 2.06.2021

Major changes in real estate state registration in Russia

A new law published on 30 April 2021 addresses the digitalization and improvement of real estate registration procedures. It is Federal Law No.120-FZ “On amendments to the Federal Law ‘On real estate state registration’ and separate legal acts of the Russian Federation” (“Law No.120” or the “State registration law”, respectively).

The adopted amendments will simplify registration, shorten the time it takes and make the process more accessible by providing a number of services, including state registration, via a personal account on the Rosreestr website or on-site services.

Law No.120 made the following main changes in real estate state registration:

1. The list of grounds for state cadastral registration and/or state registration of rights has been changed

Now, state cadastral registration and/or state registration of rights are done, inter alia, on the basis of[1]:

  • decisions of arbitration courts, for which writs of execution have been issued in accordance with judicial acts of courts of general jurisdiction or arbitration courts that have entered into legal force, together with such writs of execution;
  • the approved map-plan of the territory prepared as a result of comprehensive cadastral works;
  • a technical plan (created as a result of construction or reconstruction of buildings and structures, and for unfinished construction, premises, parking spaces in the building or facility);
  • an inspection certificate (in case of termination of rights or in connection with the real estate no longer existing).

Law No.120 also establishes that state cadastral registration can be done without simultaneous state registration of rights. This may happen when the owner of the land, building or structure chooses the type of permitted use of the real estate where, by law, the owner has the right to choose the type of permitted use of the land, building or structure[2].

Effective since 30 April 2021

2. The grounds for suspension of the state cadastral registration and/or state registration of rights have been changed

  • It used to be that state cadastral registration and state registration of rights could be suspended if the lender and borrower did not submit a joint application for state registration of rights to residential premises purchased using borrowed funds. Now this reason is no longer valid.
  • The previous version of the State registration law stipulated a certain non-compliance as grounds for suspending state cadastral registration and state registration of rights. Namely, the created real estate failing to comply with the land plot’s permitted use type and construction codes. This could apply to cases where a construction/commissioning permit was not required and the owner had the right to choose the type of permitted use without approvals and permits.

Law No.120 has amended these grounds. Now state cadastral registration and state registration of rights can be suspended where the real estate’s purpose or permitted use doesn’t match the permitted use of the land on which it was created[3].

 A new ground for suspension of state cadastral registration and state registration of rights has been introduced. It applies when (1) the application indicates a type of permitted use that is not on the list for the relevant territory[4], (2) the owner has not obtained permission for conditionally permitted use or consent to use the land plot/building/construction in accordance with the selected type of permitted use, or (3) the owner is not entitled to use the plot in accordance with the type of permitted use specified in the application[5].

Effective since 30 April 2021

3. The list of people who may apply for state cadastral registration and/or state registration of rights has been extended

State cadastral registration together with state registration of rights is carried out, inter alia, upon the application of[6]:

  • a person to whom a publicly owned land plot has been granted for lifetime inherited possession or permanent (perpetual) use: for land plots formed as a result of division or combination with other land plots;
  • a notary (his or her employee): during state registration of rights to real estate that arose under a notary-certified transaction resulting in the formation of a new real property or properties.

State cadastral registration without simultaneous state registration of rights is carried out, inter alia, upon the application of[7]:

  • the owner of a building or land plot: when the owner chooses the type of permitted use of the real estate, if, by law, the owner has the right to choose the type of permitted use;
  • the state/local government body responsible for the formation of land plots commonly owned by the owners of premises in apartment buildings: for land plots commonly owned by the owners of premises in apartment buildings;
  • a person to whom a publicly owned land plot has been granted for permanent (perpetual) use, lifetime inheritable possession or for lease or gratuitous use (if a lease or gratuitous use agreement has been concluded for more than five years): when the land plot’s boundaries change;
  • a person possessing a real property by right of operational administration, economic management, trust management or lease or gratuitous use (if the contract of lease or gratuitous use has been concluded for more than five years): in relation to the publicly owned building, premises or parking space in them, or unfinished construction;
  • other persons.

Effective since 30 April 2021

4. The state registration of transfer of ownership when a corporate seller is liquidated has been regulated

Law No.120 introduces a provision on how state registration is done in a specific case involving liquidation[8]. If, at the time the application for state registration of the transfer of ownership is filed, the seller company has been liquidated or removed from the State Register of Legal Entities but is still listed as the owner of the alienated property in the State Real Estate Register, the state registration is done on the basis of:

  • the purchaser’s application[9];
  • an extract from the State Register of Legal Entities confirming the liquidation entry for the legal entity in the register;
  • documents confirming the parties have performed their obligations to fully pay the contract price and to transfer the real estate.

Effective since 30 April 2021

5. The state registration of commonly owned real estate has been clarified

Law No.120 establishes that (1) applications for state cadastral registration and state registration of rights to property acquired in common ownership as well as (2) applications for state cadastral registration of changes to information on commonly owned property are submitted jointly by all persons who acquire/own such property in common[10].

Effective since 30 April 2021

6. The list of additional information on a real property contained in the real estate cadastre has been supplemented[11]

The additional information on a real property now also includes:

  • information that the land plot(s) has/have been/are formed by redistribution of (1) publicly owned land plot(s) and (2) privately owned land plot(s) based on a decision to approve the land plot layout or consent of state/local authorities to conclude an agreement on land plot redistribution;
  • information on the decision to seize a land plot or real estate located on it for state needs[12];
  • information that the land plot or the real estate on it are located within a territory for which a decision has been taken to reserve land plots for state needs.

Effective since 30 April 2021

7. Amendments to the procedure for correcting errors in the State Real Estate Register

 Law No.120 stipulates that an application to correct a technical error may be submitted electronically through a personal account on the Rosreestr website without signing the application with an electronic signature[13].

  • The following procedure will be followed to correct registry errors:
  • if the registry error is contained in documents submitted earlier with an application for simultaneous state cadastral registration and state registration of rights or with an application for state cadastral registration of the respective real property, then state cadastral registration due to a change in the property will be done;
  • if a registry error is contained in documents previously submitted through interdepartmental information exchange, then the information will be included in the State Real Estate Register ;
  • if the registry error is contained in documents previously submitted by notification or otherwise, then the information will be included in the State Real Estate Register[14].

Effective since 30 April 2021

8. The provision regulating the relevance of data from the State Real Estate Register has been amended

Law No.120 stipulates that information from the State Real Estate Register is up-to-date (valid) as of the date the relevant extract from the State Real Estate Register is signed by the registration authority[15].

Effective since 30 April 2021

9. Provision of information from the State Real Estate Register via third-party websites

Law No.120 bans the creation of websites (other than the official Rosreestr website), computer programs and mobile applications providing information from the State Real Estate Register. It also prohibits citizens, organizations and other persons who created them from using such websites, programs and applications to provide information to interested parties[16].

Effective since 30 April 2021

10. The list of applications that can be submitted through a personal account on the Rosreestr website has been defined

The following applications, in particular, may be submitted electronically via a personal account without the owner’s electronic signature[17]:

  • an application for the state cadastral registration of changes to the main information about the real estate;
  • an application for the state cadastral registration and state registration of rights to single-family housing construction or a garden house that has been created or reconstructed;
  • an application for the state cadastral registration and state registration of rights to a land plot(s) formed by reallocating publicly owned land plot(s) or privately owned land plot(s);
  • an application to enter information on the email address and/or postal address through which the owner can be contacted in the State Real Estate Register;
  • other applications.

Effective starting 1 January 2023

11. The number of original documents submitted for state cadastral registration and/or state registration of rights has changed

Law No.120 stipulates that only one original copy of documents required for the state cadastral registration and/or state registration of rights will now be provided. The original will be returned to the applicant after the respective registration procedure has been completed. Acts of state/local authorities and court acts establishing rights to real estate are still provided in one copy[18]

Effective since 30 April 2021

12. Amendments have been made to the procedure for and timing of state registration of joint construction agreements (JCA)

 There was already a list of documents required to register a JCA. Now, if the rights to the land plot where the construction is being done were pledged to secure the construction loan, Law No. 120 establishes that the pledgee’s consent is also required before the developer enters into the first JCA[19].

  • Also, for state registration of the second and subsequent JCAs, the developer must submit, among other documents, the pledgee’s consent to terminate the pledge over the joint construction project, if such consent is issued for each joint construction project[20].
  • The state registration of a participant’s rights to a joint construction project no longer requires the submission of a JCA or an agreement assigning claims under a JCA, if a claims assignment agreement has been concluded[21]. 

Effective since 30 April 2021

Law No.120 introduces the following deadlines for registering the second and subsequent JCAs after the JCA for the first joint construction project has been registered[22]:

  • Five business days if the application is submitted in hard copy;
  • Three business days if the application is submitted electronically;
  • Seven business days if the application is submitted through the Multifunctional Public Services Centre.

Effective starting 28 October 2021

13. Status of dormitories determined

Law No.120 stipulates that when information on a building with the permitted use of “dormitory” is entered in the State Real Estate Register, the building’s purpose is stated as “non-residential” in the real estate cadastre[23].

Effective since 30 April 2021

14. The maximum permitted parking space size has been changed

Law No.120 stipulates that the maximum permitted size of a parking space is not limited[24]. The minimum size of a parking space is still 5.3 x 2.5 meters.[25]

Effective since 30 April 2021

15. Changes in the state cadastral registration and state registration of rights for certain categories of real estate

Law No.120 introduces a new provision that the expiry of a lease/uncompensated use agreement for a land plot provided for construction of real estate is not grounds for suspending state cadastral registration and state registration of rights to an object created on the land plot, as long as the construction permit was valid when the documents were submitted[26].

  • There are new considerations for cadastral registration for a part of a property. For example, if the application for state registration of lease of part of a land plot, building, structure, premises or parking space is not accompanied by a land survey map or technical plan of that part of the real estate, then the cadastral registration of that part is not done. Instead, the lease agreement is registered as an encumbrance of the real estate, except for the following cases:
  • the State Real Estate Register contains information on all premises in the building/structure;
  • a lease agreement for the building/structure entitling use of part of the building/structure constituting one or more premises with common building structures within the floor(s) is provided[27].

Effective since 30 April 2021

____________________________

We recommend considering these amendments when carrying out real estate cadastral and registration activities.

[1] Clause 2(5.1, 7.2, 7.3, 7.4) of Art. 14 of the State registration law.

[2] Clause 5(12) of Art. 14 of the State registration law.

[3] Clause 1(22) of Art. 26 of the State registration law.

[4] The list of permitted uses of a land plot is contained in the town-planning regulation for the territorial zone within which the land plot is located.

[5] Clause 1(33.1) of Art.26 of the State registration law.

[6] Clause 1(4.3, 4.4, 4.5) of Art. 15 of the State registration law.

[7] Clause 2(2.3, 2.4, 4.1, 4.2, 4.3, 4.4, 5.1) of Art. 15 of the State registration law.

[8] Clause 15(9) of the State registration law.

[9] Formerly, in practice Rosreestr could refuse to register the transfer of ownership if the seller company was liquidated/excluded from the State Register of Legal Entities and if only a purchaser submitted the application.

[10] Clause 15(4.1) of the State registration law.

[11] Clause 8(4, 5) of the State registration law.

[12] Previously, this information was contained in the register of property rights.

[13] Clause 61(2.1) of the State registration law.

[14] Clause 61(3) of the State registration law.

[15] Clause 62(4) of the State registration law. Formerly, the information from the State Real Estate Register was deemed up-to-date (valid) at the time of its issuance by the registration authority or the Multifunctional Public Services Center.

[16] Clause 62(25) of the State registration law.

[17] Clause 18(1.2) of the State registration law.

[18] Clause 21(3) of the State registration law. The State registration law used to require that at least two original copies be submitted, one of which was placed in the register file. Now, the originals submitted for state cadastral registration and/or state registration of rights will be converted into electronic format and returned to the applicant upon completion of registration.

[19] Clause 2(8) of Art. 48 of the State registration law.

[20] Clause 48(3.1) of the State registration law.

[21] According to Law No.120, Clause 11(2) of Art. 48 of the of the State registration law is no longer valid.

[22] Clause 1(13, 14) of Art. 16 of the State registration law.

[23] Clause 70(17) of the State registration law.

[24] Clause 24(6.2) of the State registration law. Formerly, the maximum size of a parking space was 6.2 x 3.6 meters.

[25] Order of the Ministry of Economic Development of Russia No.792 of 07.12.2016 “On Establishing the Minimum and Maximum Permissible Sizes of Car Parking Spaces”.

[26] Clause 40(2.1) of the State registration law.

[27] Clause 44(2, 5) of the State registration law.

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