Developments in the land, real estate and construction legislation December 2008 – January 2009.

07.03.2009

LEGAL UPDATE No. 6.

1. Developments in state cadastral registration of land.

Goltsblat BLP hereby advises on changes to the procedure for state cadastral registration of land plots, including:

1) introduction of the notion of a “multi-contoured land plot”, in effect to replace that of “joint land holding”;

2) approval of:

  • a new format for the land survey plan and requirements for drafting it,
  • a template notice of a meeting to be convened for approval of land plot boundaries, and,
  • a transitional period for application of the corresponding order.

Multi-contoured land plots.

The Federal Law “On the State Real Estate Cadastre” enacted on 1 March 2008 abolished state cadastral registration of joint land holdings (so-called “composite land plots”), which had significantly complicated recording, for instance, of land plots for agricultural use and those intended for operation of linear facilities.

In this connection, the Ministry for Economic Development issued letter No. 266-IM/D23 of 16 January 2009 permitting state cadastral registration of “multi-contoured land plots”.  In essence, these are similar to the notion of “joint land holding” used previously. The specific difference is that land to be recorded in the State Cadastre now includes only the multi-contoured land plot itself, whereas both the joint land holding and its individual components used to be subject to cadastral registration. Please note that the boundaries of  identified multi-contoured land plots should not cross those of municipal districts and/or population centres (while they may span multiple cadastral quarters).

Introduction of multi-contoured land plots for cadastral registration is expected to help accelerate and reduce the cost of identifying agricultural land plots and ones intended for operation of linear facilities. Even so, the software on which the State Real Estate Cadastre is based does not yet allow operations with such land plots, so cadastral registration of multi-contoured land plots might involve practical difficulties for the time being (probably until mid-March 2009).

Land survey plan of a land plot.

Order of the Ministry for Economic Development and Trade of the Russian Federation No. 412 of 24 November 2008 approved the land survey plan format, corresponding drafting requirements, and the template notice of a meeting convened to approve land plot boundaries (registered with the Ministry of Justice of the Russian Federation under No. 12857 on 15 December 2008).

Pursuant to Federal Law No. 221-FZ “On the State Real Estate Cadastre” of 24 July 2007 (hereinafter the “Law”), a land survey plan is drawn up on the basis of the cadastral plan of the relevant area or a cadastral excerpt concerning the relevant land plot containing certain data recorded in the State Real Estate Cadastre and providing information on the identified land plot(s) or part(s) thereof, or new facts about the land plot(s) to be recorded in the State Real Estate Cadastre. In other words, a land survey plan is one of the most vital documents for cadastral registration of land plots.

The land survey plan format consists of text and graphics, divided into mandatory sections, plus sections included in the survey plan, depending on the type of cadastral works. Mandatory sections of the land survey plan, irrespective of the type of cadastral works, include, for example:

  • source data;
  • information on measurements and estimates;
  • draft geodesic survey;
  • land plot layout, draft of land plots and their parts.

Even though the Order took effect on 1 January 2009, the Ministry for Economic Development and Trade of the Russian Federation established a transitional period for its application (letter No. 20581-IM/D23, dated 26 December 2008). If a work contract for elaborating the documents needed for state cadastral registration was concluded before 1 January 2009, Land Plot Descriptions complying with the previously effective rules established by Roszemkadastr Order No. P/327 of 2 October 2002 may be submitted until 1 July 2009, instead of land survey plans.

2. Enactment of Moscow Region Law No. 236/2008-ОZ of 27 December 2008 “On Amendments to the Moscow Region Law ‘On Land Relations in the Moscow Region’” (hereinafter the “Law”) has come into effect.

The main purpose of the Law is to bring Moscow Region Law No. 23/96-OZ “On Land Relations in the Moscow Region”, dated 7 June 1996 (hereinafter the “Law on Land Relations) in line with new federal legislation and certain judicial acts. The most critical amendments introduced by the Law can be conditionally divided into 3 groups.

Disposal of land plots in undelimited state ownership.

Ruling No. 4-G08-27 of the Supreme Court of the Russian Federation, dated 23 July 2008, invalidated certain provisions of Moscow Region Law No. 23/96-OZ “On land Relations of the Moscow region” of 7 June 1996 requiring prior approval by the Moscow Region Property Ministry of draft decisions of municipal authorities on disposal of land plots in undelimited state ownership. The Ruling deletes all references to the need for such approval from the Law on Land Relations.

Local authorities of municipal and urban districts may now dispose of land for which state ownership is not delimited and decide on:

1. approval of a land plot layout on the cadastral plan or cadastral map of the relevant area (previously – drafts of land plot boundaries);
2. attribution of land and land plots located within such an area to a specific land category, other than agricultural land;
3. prior approval of facility locations on land plots;
4. other matters in accordance with the legislation of the Russian Federation and the Moscow Region.

Change in land categories.

Certain provisions of the Law on Land Relations were brought in line with the federal legislation on recategorisation of land and land plots. For example, by analogy with the federal legislation, the Law no longer requires a “land management file” and lost agricultural production estimates to be provided for transfer purposes.

Other issues.

Certain provisions of the Law on Land Relations have also been aligned with Federal Law No. 141-FZ of 22 July 2008 (specifically, the conditions and procedure for identifying land plots and the cost of land privatisation) and federal legislation on cadastral works and the state real estate cadastre.

3. Enactment, on 21 December 2008, of Moscow Region Law No. 100/2008-OZ “On Amendments to Moscow Region Law ‘On Agricultural Land Transactions in the Moscow Region’” of 12 December 2008 .

On 21 December 2008, Moscow Region Law No. 100/2008-OZ “On Amendments to Moscow Region Law ‘On Agricultural Land Transactions in the Moscow Region’”, dated 12 December 2008, came into force.

The main purpose of the Law is to bring Moscow Region Law No. 75/2004-OZ “On Agricultural Land Transactions in the Moscow Region” in line with the new federal legislation.

The Law determines more precisely the terms of reference of the Moscow Region Government and of the authority in charge of transactions with agricultural land plots (the Moscow Region Property Ministry). Specifically, their authority to dispose of land is limited to land plots owned by the Moscow Region. Furthermore, the Law confirms removal of the previous limitations on the authority enjoyed by the governments of municipalities and urban districts, depending on the area of land plots.

4.  Privatisation of state-owned property in Moscow.

17 December 2008 saw adoption of Moscow City Law No. 66 “On Privatisation of State-Owned Property in Moscow” (hereinafter the “Law”) and invalidation of the former Moscow City Law No. 12 “On Privatisation of State-Owned and Municipal Property in Moscow” of 11 April 2001.

The key developments are:

1) The list of ways to privatise property was brought in line with the federal legislation. Ten privatisation methods are identified, including transformation of a state unitary enterprise into an open joint-stock company, sale of property by auction, by tender, by public offering, etc.

2) The decision-making procedure is determined with respect to privatisation conditions. A decision on privatisation conditions may be accompanied by a decision on encumbering the disposed property, including in the form of a public easement.

3) Organisations entitled to sell Moscow city property are determined, as is the payment period for privatised property: no more than 30 days from the relevant sale and purchase agreement being signed.

4) A number of limitations are imposed on the legal capacity of state unitary enterprises involved in the programme for privatisation of state unitary enterprises in Moscow and open joint-stock companies created thereby. These apply until the title to the privatised property is transferred to the buyer. Specifically, from the time when the privatisation programme is approved, such enterprises may not, without the owner’s consent, receive loans, issue securities, perform certain transactions, etc.

5) Please note that similar limitations contained in the federal legislation apply only to unitary enterprises.

6) Specific conditions are established for privatisation of historical and cultural monuments. Sale and purchase agreements for these must include obligations on the part of their new owners to restore and preserve the historical and cultural monuments.

7) A maximum area (not more than 100 m2) of real estate is established for acquisition by small and medium-sized businesses holding it on lease and enjoying the pre-emptive buyout right; a maximum period of one year is set for paying by instalment for the acquired property.

8) Adoption of the Law has meant a change in the privatisation planning procedure. Privatisation planning now involves approval of a Moscow City property privatisation programme, including a list of state unitary enterprises, shares (contributions) and other property intended for privatisation and other data.

Unlike the forecast plan (programme) for privatisation of federal property developed annually for the next financial year, the Moscow City property privatisation programme must be planned for three years, broken down by the year.

With the exception of certain provisions, the Law took effect on 29 December 2008.

For further information, please contact:

Vitaly Mozharowski, Partner,
Commercial/Industrial Real Estate and Construction
Goltsblat BLP;
Tel: +7 (495) 287 44 44,
Email: info@gblplaw.com

Elena Barinova, Partner,
Real Estate Investment and Finance
Goltsblat BLP;
Tel: +7 (495) 287 44 44,
Email: info@gblplaw.com

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