Recent amendments to the law on the registration of real estate transactions – introduced by Federal Law 391-FZ on December 29 2015 (the 'December 2015 amendment') and Federal Law 172-FZ on June 2 2016 (the 'June 2016 amendment') – made the following transactions subject to notarisation:
- the alienation of a joint share in a property;
- the sale of a share in an agricultural plot (relevant only for particular types of agricultural plot);
- real estate transactions relating to guardianship; and
- the alienation of a minor or incompetent person's real estate.
The June 2016 amendment corrects and clarifies the changes initially introduced by the December 2015 amendment. For example, while the December 2015 amendment provided that only the sale of a joint share in a property to a third party be notarised, the June 2016 amendment clarifies that any alienation – including a donation or contribution to a company's charter capital or property – must be notarised.
The June 2016 amendment also explicitly states that notarisation is required when all joint shares in a property are simultaneously alienated. This issue had been subject to discussion after the December 2015 amendment was adopted and is finally clarified in the June 2016 amendment.
Further, it was unclear whether notarisation was required in a sale of premises, as under Russian law the owner of a premises automatically owns a share in the commonly used parts of both the building and the plot on which the building is located (unless the plot is state owned). In this regard, the December 2015 amendment could be implemented so that any sale of premises requires notarisation since it would be sold together with the relevant share in the commonly used parts of the building and plot.
Some lawyers believe that in such situations, notarisation is not required as the premises should be regarded as principal and the share in the commonly used parts of the building and plot should be regarded as adjunct of such premises. This view is supported by the existing practice of registration authorities and notaries.
The issue concerning the disposal of real estate subject to fiduciary management conditions has also been addressed. In particular, Russian law provides for the establishment of real estate unit investment funds, which represent real estate operated by a management company on the basis of fiduciary management. The December 2015 amendment provided that all transactions relating to the disposal of real estate subject to fiduciary management conditions required notarisation, which implied that all transactions regarding real estate unit investment funds fell under such requirement. The June 2016 amendment clarifies that unit investment fund transactions and transactions subject to fiduciary management conditions do not require notarisation, which has brought significant relief to those active in the real estate investment fund field.
For further information on this topic please contact Ekaterina Kalinina at Noerr by telephone (+7 495 799 56 96) or email (firstname.lastname@example.org). The Noerr website can be accessed at www.noerr.com.
This article was first published by the International Law Office, a premium online legal update service for major companies and law firms worldwide. Register for a free subscription.