No. 67. The Russian Supreme Arbitration Court specifies the legal treatment of common areas in non-residential and other buildings

Goltsblat BLP advises that Resolution of the Plenum of the Supreme Arbitration Court of the Russian Federation of 23 July 2009 No. 64 “On certain aspects of the practice of considering disputes concerning the rights of owners of premises to common property in a building” (the Resolution) has been published. With respect to regulation of the treatment of common premises in non-residential buildings, this is undoubtedly a long-awaited development.

The most significant conclusions and recommendations include the following:

1. By legal analogy, the treatment of common property of owners of premises in apartment blocks (articles 249, 289 and 290 of the Civil Code of the Russian Federation) is applied to common property in non-residential buildings.
2. The owner of premises in a non-residential or other building also owns a share in the right of common ownership of the common property in the building. The right of common ownership arises by virtue of law, irrespective of its registration in the Realty Register.
3. The share in the right of common ownership of common property is determined in proportion to the area of the premises owned, though, in certain cases, the court might determine a different share. A change in the share on agreement between the owners of the premises is not permitted.
4. On agreement between the owners of the premises, a specific regime may be established for use of the common property (for instance, a procedure for carrying out repair works or using lease proceeds).
5. By analogy, the provisions of the lease legislation are applied to agreements of the owners of common property on transfer of individual parts of the building (roof, support walls) for use (for instance, for placement of outside advertising). The party transferring the property for use is made up of all the owners of the common property (a multitude of persons on the part of the lessor). At the same time, the building as a whole is thus encumbered. Such agreements are subject to state registration as envisaged for registration of lease agreements for buildings and structures.
   6. When the owner of the building formalises the right to individual premises in the building (for instance, in order to sell the given premises), the right of ownership to the building as a whole terminates. The registration of the building is deleted and the building ceases to exist as a real estate facility and subject of rights, while the rights to the individual premises are subject to registration.
6. The right of common shared ownership to the common property in the building arises as soon as any of the premises in the building become the property of another person.
7. If the individual title of any person to the facilities making up the common property is registered, the owners of the premises in the building are entitled to demand recognition of their own common shared ownership of the facilities making up the common property.

Let us note that, in contrast to the Housing Code of the Russian Federation (article 36), the Resolution makes no mention within the common property of the land plot accommodating the building. The question of the land plot beneath a non-residential or residential building consisting of premises belonging to different persons by title is not addressed at all by the Resolution.

For additional information, please contact:

Vitaly Mozharowski,
Partner,
Real Estate&Construction,
Goltsblat BLP,
E-mail: info@gblplaw.com

Elena Barinova, Partner,
Real Estate Investment and Finance,
Goltsblat BLP,
E-mail: info@gblplaw.com