Draft Law No. 417505-4, intended to impose material liability on an owner or another legal possessor of a building for harm caused to a third party as a result of destruction or damage to a building, was introduced in the State Duma on 22 February 2011.

The draft law is expected to require an owner or another lawful possessor to reimburse a third party for harm caused. Reimbursement is to be made in accordance with civil legislation (such as in the loss of the primary wage earner, deterioration of health, etc.) and to compensate:

  •  a victim’s relatives (parents, spouse, children) RUB 3 million in the event of death;
  • a victim RUB 2 million in the event of grave bodily injury; and
  • a victim RUB 1 million in the event of moderate bodily injury.

 A designer, developer or customer will bear the same liability in the event of the destruction of a building during construction. However, there should not be any issues in respect of payments from designers or developers because there are special compensatory funds of corresponding self-regulatory organisations for such cases.

In terms of an owner or a lessor, the draft law could complicate/delay the sale and purchase of a building, as the parties are likely to be wary of entering into such transactions before carrying out a full-scale check of the technical condition of the building. Consequently, owners of defectively constructed buildings risk a loss of interest from potential buyers and lessors.

[Draft Law No. 417505-4 “On Amending the City-Planning Code of the Russian Federation and Separate Legislative Acts of the Russian Federation”, dated 22 February 2011]