On 11 July 2011, the Supreme Arbitration Court of the Russian Federation (the "SAC") issued a decree on agreements concluded on real estate to be developed or acquired at a future date. Specifically, the following points were clarified:

a) sales and purchase agreement may be concluded on real estate, whose ownership title is not registered in the Unified Register of Immovable Property Rights and Transactions, as at the execution date of the agreement. In this case, specifying the (i) site; (ii) approximate area; and (iii) features from the design will suffice in determining the subject-matter of the agreement.

b) Any preliminary sales and purchase agreement that involves the full payment or payment of a significant portion of the contract price as one of its essential conditions must be qualified by the courts as a sales and purchase agreement on future real estate.

c) An investment agreement is not a separate type of agreement, and arbitration courts in each case will need to determine its legal nature (sales and purchase, construction agreement, partnership, etc.).

Consequently, the SAC has established a new type of legal relationship with respect to the construction of real estate property and the further transfer of its title (a future sales and purchase agreement) as opposed to the institute of the preliminary agreement, thereby simplifying relationships between sellers and buyers.

[Decree No. 54 of the Plenum of the Supreme Arbitration Court of the Russian Federation, dated 11 July 2011]