Public land plot tenants: COVID 19-triggered support measures
Legal Update No 793
Bryan Cave Leighton Paisner LLP, formerly Goltsblat BLP in Russia, reminds readers of the federal and regional measures for supporting public land plot tenants against the backdrop of the coronavirus pandemic.
Federal Law No. 166-FZ dated 8 June 2020 (the Law) entitles tenants of state- or municipally owned land plots to request landlords to sign an addendum prolonging their lease1.
Under the Law, the right is subject to certain conditions:
The land plot lease must have been concluded before the high alert or emergency regime was introduced in 2020 by the relevant region. To illustrate, in Moscow, the high alert regime was introduced by Moscow Mayoral Decree No. 12-UM dated 5 March 2020, while the Moscow Region Governor did so in the Moscow Region by Resolution No. 108-PG dated 12 March 2020.
On the date of the tenant’s addendum request, the land plot lease has not yet expired and no lawsuit has been filed by the tenant to terminate it.
On the date of the tenant’s addendum request, the competent authority has no information about any violations of the Russian legislation during use of the land plot that might have been identified through the land supervision but remain outstanding.
The request must be sent by the tenant to the landlord on or before 1 March 2020.
The Law grants the right to lease prolongation to all public land plot tenants, whether small and medium businesses or operating in the Russian industries most affected by COVID-19. Equally, the basis for conclusion of the lease (whether or not by tender) and any land rent arrears are of no relevance.
The addendum may prolong the land plot lease for a term determined by the tenant but not exceeding:
the land plot lease term agreed by the parties prior to its prolongation; or
three years if the lease was concluded for a longer term.
The Law specifically provides that Clause 8, Article 39.8 of the Russian Land Code on the general rules for setting the lease term for public land plots do not apply.
As no unified approaches have been established at the federal level to reducing or exempting from lease payments for public land plots, we recommend relying on the laws and regulations of Russia’s constituent entities.
For instance, Moscow Government Resolution No. 212-PP dated 24 March 2020 On Economic Relief under the High Alert Regime exempts certain categories of person from lease payments for a specific period.
In the Moscow Region, similar support measures are provided for by Moscow Region Government Resolution No. 208/11 dated 16 April 2020, which approves the list of activities eligible for relief and the relief measures available to tenants of real estate owned by the Moscow Region.
1 Article 19 of Federal Law 98-FZ dated 1 April 2020 “On Amending Individual Legislative Acts of the Russian Federation on Emergency Prevention and Response”.
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