The Integral Real Estate Complex as a New Type of Real Estate and Other Amendments to the Regulation of the Subject-matter of Civil Law Rights

19.07.2013

Legal Update No. 424, 19 July 2013

Goltsblat BLP advises that Federal Law of 2 July 2013 No. 142-FZ “On Amending Subsection 3, Section I of the First Part of the Civil Code of the Russian Federation” has been adopted (the “Law”).

1. The Law introduces a new type of real estate: the integral real estate complex (new Article 133.1 of the Russian Civil Code). It is defined as a set of buildings, structures and other properties that serve the same purpose and are physically or technologically inseparable, including linear facilities (railways, electricity transmission lines, pipe-lines, etc.) or are located on the same land plot, provided that the title thereto is registered in the Realty Register (EGRP) by specifying this entire set of properties as a single piece of real estate. Moreover, the integral real estate complex should also be treated as indivisible real estate.

This legal development is primarily aimed at simplifying turnover of various infrastructure facilities (for instance, energy, transport, communications, utility facilities, etc.) and classifying them as real estate. These facilities may consist of a number of various properties, both movable and immovable, and previously it was only possible to register rights to each piece of real estate constituting part of such facilities but not to a facility as a whole.

The success of the new concept of the integral real estate complex will mostly depend on the harmonisation and quality of other immediately affected legislative provisions. A number of amendments will be required to the law on state registration of real estate rights and transactions, the law on the state real estate cadastre, the land and town-planning legislation, the rules for maintaining the Realty Register and various other laws and regulations. Following introduction of the integral real estate complex, a relevant draft law on amendments to certain legislative acts has been submitted to the State Duma for consideration.

2. The Law introduces the presumption that products, benefits and profits derived from things should belong to their owners, unless the law, the contract or the nature of the relations determines otherwise. Previously, the general rule was that persons using things legally were considered to be the owners of the products, benefits and profits gained.

3. The Law excludes work from the subject-matter of civil rights and it now specifies that only work products, not work itself, should be treated as the subject-matter of civil rights. As for services, the Law clarifies, in contrast, that it is the process of rendering services that constitutes the subject-matter of civil rights.

4. The Law also provides clarifications on the legal treatment of indivisible things and refers to securities and their types by establishing requirements on certificated and non-certificated securities. It also refers to intangibles and their protection, as well as to protection of personal privacy.

Federal Law No. 142-FZ comes into force from 1 October 2013.

If you have any question or would like more detailed information, please contact: Vitaly Mozharowski, Partner, Real Estate & Construction, Goltsblat BLP, by phone +7 495 287 44 44, or by e-mail Vitaly.Mozharowski@gblplaw.com; or Yuri Chernobrivtsev, Partner, Real Estate & Construction, Goltsblat BLP, by phone +7 495 287 44 44, or by e-mail Yuri.Chernobrivtsev@gblplaw.com; or Dmitry Ilyin, Head of Group , Real Estate & Construction, Goltsblat BLP, по тел.: +7 495 287 44 44, or by e-mail: Dmitry.Ilyin@gblplaw.com.

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