Unauthorised structures: latest practice of the Russian Supreme Arbitration Court.

18.01.2011

Legal Update No. 210.

Goltsblat BLP advises of publication of Information Letter No. 143 of the Presidium of the Supreme Arbitration Court on 09 December 2010. It overviews application of Article 222 of the Civil Code of the Russian Federation by arbitration courts (the “Overview”).

Further to Resolution No. 10 of the Plenum of the Supreme Court of the Russian Federation , Plenum of the Supreme Arbitration Court of the Russian Federation No. 22 dated 29 April 2010 “On certain issues arising in court practice when resolving disputes connected with protection of ownership and other rights in rem”, the Overview specifies and develops the position of the Supreme Arbitration Court with respect to unauthorised structures. We see the following conclusions and recommendations in the Overview as the most important from the practical point of view:

  • The Overview specifies who is authorised to file a court claim for demolition of an unauthorised structure. Such persons include, in particular, prosecutors, construction supervision authorities, and neighbouring land users whose rights and legitimate interests are violated by the unauthorised structure remaining in place.
  • Yet the court makes an important reservation: a prosecutor is not entitled to file a claim for demolition of an unauthorised structure created in breach of the civil rights only of the legitimate owner of the land plot (see paragraph 2 of the Overview). In other words, in order to file a court claim, the prosecutor must first prove that the structure has been built in material breach of construction standards and rules and jeopardises human life and health.
  • It is confirmed that state registration of real estate title does not, in itself, rule out the possibility of a claim to have a structure recognised as unauthorised being satisfied (see paragraph 5 of the Overview). The court also confirms that transactions with unauthorised structures are void (see paragraph 11 of the Overview). The above provisions once again prove the importance of a full title due diligence before any real estate is acquired.
  • The Overview systematises the position of the Supreme Arbitration Court of the Russian Federation regarding enforcement of the statute of limitations for claims to demolish unauthorised structures. In particular, it specifies the cases when the statute of limitations does not apply to claims for demolition (see paras. 6, 7, 12 of the Overview).
  • It also clarifies the position regarding assessment of a person’s actions to obtain a construction permit. The court confirms that an application for such a permit must be filed together with all the documents required under the town-planning legislation (specifically, entitling documents for the land, town-planning plan of the land plot, a positive State Expert Review opinion, etc). In this case, when considering invalidation of a structure, the court may regard the applicant's subsequent actions to construct the facility in the absence of a construction permit as bona fide actions (see paragraph 9 of the Overview).
  • According to paragraph 10 of the Overview, in the event of invalidation of a construction permit (for example, if some required opinion or authorisation is not obtained), provided that there are no other grounds for demolishing the structure, such property cannot be recognised as an unauthorised structure if the person that created it acted in good faith and took proper measures to obtain such a permit. When a land plot is allocated out of public lands, the applicant may, therefore, expect the competent authority to take into account all the relevant regulations and conditions for use of the territory.
  • According to the Supreme Arbitration Court of the Russian Federation, the title to an unauthorised structure created without the requisite permits may be acquired by virtue of acquisitive prescription by a person that has owned it in good faith, openly and continuously, as its own real estate , for 15 years, provided that human life and health are not jeopardised by such a structure remaining in place (see paragraph 12 of the Overview).

For additional information, please contact:

Vitaly Mozharowski, Partner, Real Estate and Construction, Goltsblat BLP
T: +7 (495) 287 44 44,
E: info@gblplaw.com


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

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