New lease length for land plots allocated by auction

16.11.2015

Legal Update № 544

Goltsblat BLP advises that the recently adopted Russian Ministry of Construction, Housing and Utilities (Minstroy) Order No. 630/pr of 1 September 2015 (the “Order”) modifies the timeframes for engineering surveys, architectural and structural design and construction of buildings and structures (“Regulatory Timeframe”).

The Regulatory Timeframe directly affects the length of leases for state- or municipally-owned land plots allocated by auction (clause 9, Article 39.8 of the Russian Land Code), which are concluded for twice the Regulatory Timeframe established by the federal executive body duly authorised by the Russian Government.

Since March 2015, the Timeframe has been five years, irrespective of what capital structure is to be built on the plot (Russian Minstroy Order No. 137/pr of 27 February 2015). Accordingly, the term for auction-based leases of publicly-owned land plots has been ten years.

Under the new Order, the Regulatory Timeframe is contingent on the planned capital structure area:

As can be seen, the length of leases for publicly-owned land plots is now subject to differentiation and is shorter than originally.

The Order comes into effect on 17 November 2015.

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