Amendments to federal laws

Federal Law No. 401-FZ dated 30.11.2016 “On Amendments to Parts One and Two of the Tax Code of the Russian Federation and Certain Legislative Acts of the Russian Federation”

As you may recall, a so-called “moratorium on the review of cadastral valuation” was imposed in the summer of 2016, to run from 01.01.2017 to 01.01.2020.1

Law No. 401-FZ eases the moratorium: it envisions the right of the concerned state agencies of RF constituent entities to decide whether a new cadastral valuation will be conducted in the given RF constituent entity during the aforementioned period, or whether it will be covered by a valuation determined according to the rules of the “moratorium.” That said, the latter can only be applied provided the RF constituent entity in question sends the respective resolution to Rosreestr by 20.12.2016. As of the date of this overview, no information has been published in public sources indicating the adoption of such a resolution in St. Petersburg.2

According to publicly-available information, St. Petersburg plans to proceed with a review of the cadastral value of real estate properties in 2018.

The law entered into force on 30 November 2016, with the exception of certain provisions.

1 The corresponding moratorium was imposed under Federal Law No. 360-FZ dated 03.07.2016 “On Amendments to Certain Legislative Acts of the Russian Federation,” pursuant to which new cadastral valuations are not performed during the aforementioned period, and taxation through 01.01.2020, according to the general rule, should be based on the cadastral valuation effective as of 01.01.2014 or 1 January of the year in which cadastral valuation first became effective for taxation purposes, if, as of 1 January 2014, cadastral valuation was unavailable or unused for the purposes of taxation.

2 Please note that the St. Petersburg Government has adopted a resolution on shifting to the performance of state cadastral valuation according to the “new” Federal Law No. 237-FZ dated 03.07.2016 “On State Cadastral Valuation” as 01.02.2017, as well as on the creation for these purposes of the SPB State Budgetary Institution “Municipal Administration for Cadastral Valuation” (St. Petersburg Government Resolution No. 1259 dated 28.12.2016).

Federal Law No. 431-FZ dated 19.12.2016 “On the Suspension of a Paragraph of Clause 3, Article 14 of the Federal Law “On the Objects of Cultural Heritage (Monuments of History and Culture) of the Peoples of the Russian Federation” in Connection with the Federal Law “On the Federal Budget for 2017 and the Planned Period 2018-2019”

The law once again suspends the operation of certain provisions of the Federal Law “On the Objects of Cultural Heritage… ,”3 allowing the owner of a federally-recognized object of cultural heritage, or its operator on the basis of the respective gratuitous use agreement, to receive compensation from the federal budget for the funds spent on works performed for the upkeep of the concerned object.

The suspension will remain in force until 1 January 2019. Please note that the operation of the article in question has already been suspended for roughly 6 years (since January 2011).

The law enters into force on 1 January 2017.

3 Federal Law No. 73-FZ dated 25.06.2002 “On the Objects of Cultural Heritage (Monuments of History and Culture) of the Peoples of the Russian Federation.”

Federal Law No. 445-FZ dated 19.12.2016 “On Amendments to Articles 51 and 55 of the Town-Planning Code of the Russian Federation”

The timeframe for the issuance of construction and commissioning permits has changed from 10 calendar days to 7 business days which, according to the general rule, effectively means its shortening. The innovation applies to permits applied for after the law’s entry into legal force.

The law entered into force on 31 December 2016.

Federal Law No. 499-FZ dated 28.12.2016 “On Amendments to Article 3 of the Federal Law ‘On Amending Subsections 4 and 5, Section I, Part One and Article 1153, Part Three of the Civil Code of the Russian Federation’ ”

As you may recall, according to the general rule, the total statute of limitations period amounts to three years from the date when the person (entity) knew or should have known of the violation of its rights and learned or should have learned who represents the appropriate respondent under any lawsuit seeking the protection of said rights. The law also envisions a ten-year “objective” limitation of the statute of limitations period, subject to exemption from the date of the respective violation.

That said, the law previously envisioned that the ten-year limitation of the statute of limitations period applies to violations whose statute of limitations period had not expired as of 1 September 2013. However, Ruling No. 3-P of the RF Constitutional Court dated 15.02.2016 found such regulation unconstitutional to the extent that it allowed for a denial of protections for people (entities) whose rights had been violated more than 10 years ago, but for whom the subjective statute of limitations period (“3 years from the date when the person (entity) knew or should have known…”) had not yet elapsed by 1 September 2013.

Law No. 499-FZ clarifies that with respect to violations occurring prior to 1 September 2013, the ten-year limitation of the statute of limitations period begins running on 1 September 2013.

The law entered into force on 09.01.2017 and indicates the possibility of the review of court rulings concerning people (entities) who were denied protection with reference to the ten-year limitation.

RF Government Resolution No. 1169 dated 12.11.2016 “On Amendments to Certain Acts of the Russian Federation Government”

The resolution introduces certain changes to the Procedure for Organizing and Performing the State Expert Review of Design Documentation and Engineering Survey4 (hereinafter – the Procedure). As you may recall, this Procedure is also used in the performance of non-state expert reviews.

In the progression of innovations5 made to the Town-Planning Code of the Russian Federation concerning repeat-use design documentation6 (hereinafter – RUDD), the Resolution brings the procedure into alignment with the RF Town-Planning Code, just as it envisions that the Procedure encompass provisions regulating the issuance of expert-review conclusions concerning design documentation prepared with the use of RUDD; inter alia, it establishes that if RUDD has been used in the development of design documentation, then its review for compliance with the requirements of applicable technical regulations is not conducted with respect to those sections of design documentation that have not been subjected to modification and fully conform to the respective RUDD.

The resolution establishes that the timeframe for the expert review of design documentation and (or) the findings of engineering surveys may be extended at the initiative of the applicant by not more than 30 days, pursuant to the terms of the respective agreement.

The resolution entered into force on 30.11.2016.

4 RF Government Resolution No. 145 dated 05.03.2007. 5 For a more detailed analysis of the respective amendments to the RF Town-Planning Code, please see the Dentons Overview for Q3 2016. We would be happy to provide you with a copy of this overview at your request. 6 Pursuant to Clause 1, Article 48.2, repeat-use design documentation is understood to mean design documentation for a capital structure that has received a positive conclusion under the expert review of design documentation and may therefore be used in the preparation of design documentation for the construction of a similarly-purposed and design-rated capital structure.

RF Ministry of Construction letter No. 38231-AB/08 dated 16.11.2016 “On the Preparation of Design Documentation as of 1 September 2016”

The RF Ministry of Construction has adopted a temporarily-recommended form for conclusions on modifications to design documentation,7 confirming that the changes made to design documentation do not affect the structural and other safety characteristics of a capital structure, and that they are therefore exempt from expert review.

The RF Ministry of Construction reports that the final form for conclusions on modifications to design documentation and the procedure for the issuance of such conclusions are currently in the process of being formulated.

Moreover, the ministry has clarified that in the case of the liquidation or deauthorization of the organization which conducted the initial expert review of design documentation, expert review of documentation changes that affect the structural and other safety characteristics of the respective structure may be conducted by any other expert organization.

7 Modified design documentation is understood to mean design documentation which, following the obtainment of a positive expert-review conclusion, has been subjected to changes that do not affect the structural and other safety characteristics of the respective capital structure.

RF Government Resolution No. 999 dated 05.10.2016 “On Amendments to Certain Acts of the Russian Federation Government Concerning the Formulation of Sanctions for Violation of the Timeframe for Performing Utility-Connection Measures”

The resolution clarifies certain provisions concerning sanctions for violation of the timeframe for the performance of measures aimed at utility connections to power grids.

Also clarified is the amount of the fine for the respective violation: in the event that the fee for utility connection under the corresponding agreement is RUB 550, the party in breach must pay the other party to the agreement a fine equal to 5% of said amount for each day of delay (and in the event that the utility-connection fee under the agreement exceeds RUB 550, the party in breach must pay the other party to the agreement a fine equal to 0.25% of said amount for each day of delay); that said, the total amount of such a fine under a breach on the part of the applicant may not exceed the fine amount determined according to the aforementioned procedure per year of delay.

The resolution’s innovation lies in its provision to the effect that, above and beyond a fine, in the event of the breach of the respective timeframe, the party in breach must reimburse the other party to the agreement for the costs incurred thereby in connection with being compelled to seek the enforced recovery of the aforementioned fine (in the event of the evasion of its payment) in the amount determined by the respective court ruling.

The resolution clarifies that the applicant’s breach of the timeframe established by the respective agreement for the performance of utility-connection measures by 12 months or more may constitute grounds for termination of the agreement at the request of the concerned grid company, with recourse to court.

Another new development is the indication of cases wherein the timeframe for the performance of measures aimed at utility-connection to power grids/measures under the corresponding stage are deemed to have been breached by the applicant. Inter alia, if the applicant evades verification of the satisfaction of technical conditions; if the applicant fails to send the grid company confirmation of its satisfaction of technical conditions; if the applicant fails to properly discharge its obligation to remit payment for utility connection, etc. Furthermore, in the event of the breach of the established timeframe and procedure for the forwarding to the respective rate regulator of the required fee-establishment statement by fault of the grid company, the grid company must pay the applicant, no later than the date of the applicant’s full payment of the utility-connection fee envisioned by the respective agreement, a fine calculated as 0.014 of the key rate of the Central Bank of the Russian Federation in effect as of the date of agreement conclusion multiplied by the total amount of utility-connection fee under the agreement for each day of delay, plus the costs incurred by the applicant, as determined by the respective court ruling, in connection with being compelled to seek enforced recovery.

The aforementioned changes apply to utility-connection agreements concluded on the basis of applications filed after the resolution’s entry into force, i.e. after 15.10.2016.

RF Government Resolution No. 1138 dated 07.11.2016 “On Exhaustive Lists of Procedures under the Construction of Water-Supply and Water-Discharge Facilities and the Rules for the Administration of Procedural-Description Registers”

The resolution establishes the procedural lists indicated below, entering into force on 16.05.20178:

  • An exhaustive list of procedures in the area of the construction of linear water-supply and water-discharge facilities
  • An exhaustive list of procedures in the area of the construction of water-supply and water-discharge facilities, with the exception of linear facilities.

The aforementioned lists consist of two sections and encompass the procedures envisioned by federal regulatory acts, as well as procedures associated with the particularities of engaging in construction activity in the regions (the respective procedures apply where envisioned by regional/municipal acts). “Federal procedures” include, inter alia, procedures associated with the granting of rights to a land plot, with conclusion of the respective agreements on water usage or the adoption of decisions on the granting of a body of water into use. “Regional procedures” include such matters as the presentation of a conclusion on the compliance of design documentation with the consolidated plan for underground utilities and structures and related procedures.

At the same time, the resolution sets the rules for the introduction of changes to these lists as well as the rules for the administration of registers of the procedural descriptions included in these lists. The procedural registers are subject to administration by the RF Ministry of Construction.

The resolution entered into force on 24.11.2016.

RF Government Resolution No. 1203 dated 16.11.2016 “On Amendments to the Rules Governing the Connection (Utility Connection) of Capital Structures to Gas-Distribution Networks”

The resolution entered into force on 29.11.2016 and establishes, inter alia, the following rules concerning connection to gas-distribution networks:

  • Under the connection of capital structures belonging to different applicants, the respective request for the provision of technical conditions and (or) connection application may be submitted by a single authorized party. In that case, uniform technical conditions are issued and (or) a single connection agreement is concluded with that representative.
  • The establishment of additional material terms of the respective agreement on utility connection to gas-distribution networks, namely the obligation of the applicant, in cases of the need to connect a structure standing on another party’s land plot, to present the consent of the owner of the land plot to its use throughout the construction period of the respective gas-distribution facilities.
  • The establishment of particularities with respect to the connection of capital structures located within the territorial boundaries of areas slated for integrated development.

Grounds for the refusal to issue technical conditions are supplemented by the lack of throughput capacity on the part of the provider’s networks that would be technologically connected to the gas-distribution network.

Procedure for the issuance of construction and commissioning permits for certain structures

RF Ministry of Construction Order No. 334/pr dated 19.05.2016 “On Affirmation of the Administrative Regulation of the RF Ministry of Construction, Housing and Public Utilities Governing the Provision of State Services Involving the Issuance of Construction Permits for Capital Structures, As Indicated in Clause 4, Part 5 and Clause 1, Part 6, Article 51 of the Town-Planning Code of the Russian Federation (with the exception of capital structures for which construction permits are issued by other federal agencies)”

RF Ministry of Construction Order No. 343/pr dated 23.05.2016 “On Affirmation of the Administrative Regulation of the RF Ministry of Construction, Housing and Public Utilities Governing the Provision of State Services Involving the Issuance of Construction Permits for Capital Structures, As Indicated in Clause 4, Part 5 and Clause 1, Part 6, Article 51 of the Town-Planning Code of the Russian Federation (with the exception of capital structures for which construction permits are issued by other federal agencies)”

On 21.10.2016, the respective orders entered into force, governing the procedure for the provision of state services by the RF Ministry of Construction (hereinafter – the Ministry) involving the issuance of construction and commissioning permits for certain capital structures including, inter alia, class-one and two hydrotechnical installations, airports and other aviation infrastructure, embassies and consulates, structures whose construction and reconstruction is planned for the RF continental shelf, RF inland sea waters and the RF territorial sea, and the RF exclusive economic zone, and structures whose construction is planned for the territory of two or more RF constituent entities.

The orders contain exhaustive lists of the required documents, administrative procedures and the timeframes for their performance.

The orders establish that construction permits for the respective structures, as well as the corresponding commissioning permits, are to be issued by the Ministry within 10 calendar days from the moment of submission of the required documents. Within five business days, the Ministry must make a decision on extending the validity period of a previously-issued construction permit.

Other changes

RF Government Resolution No. 1056 dated 17.10.2016 “On Amendments to Certain RF Government Acts Concerning the Classification of the Owners of Power-Supply Network Facilities as Territorial Grid Organizations”

The resolution entered into force on 01.01.2017 and clarifies certain criteria for classifying organizations as territorial grid organizations.

  • It indicates that the ownership of power-supply network facilities must be in place for no less than the long-term regulatory period (i.e. no less than five years or no less than three years under the initial establishment of long-term prices (rates) and their maximum levels), not the next regularly-occurring regulatory calculation period (i.e. no less than 12 months).
  • It modifies certain requirements governing the ownership of power-transmission lines. Thus, it establishes that the total length of such lines must amount to no less than 15 km, and that they must be connected to transformers or other substations.

Moreover, the Fundamental Principles of Price Formation in the area of regulated prices (rates) within the scope of electric-power supply have been updated with an additional principle, whereby under the establishment of prices (rates) for services involving the transmission of electric power, exempted are the costs (irrespective of their intended purpose) associated with power-supply network facilities with voltages of 1 kV or less located inside buildings and structures or the standalone parts thereof, whose use supports the supply of electric power solely to power-intake devices located in the same buildings and structures or the standalone parts thereof, with the exception of the distribution units of built-in and built-on transformer substations, as well as power-transmission feeder lines from other transformer substations to intake devices (input switching devices, main distribution panels).

RF Ministry of Economic Development Order No. 173 dated 25.03.2016 “On Affirmation of the Procedures and Methods for the Forwarding by the Title Registration Authority of Notices, As Well As Those Subject to Issuance Following State Cadastral Registration and (or) State Title Registration of the Documents Submitted by the Applicant”

The order establishes rules governing the forwarding of notices by the title registration authority pursuant to Federal Law No. 218-FZ dated 13.07.2015 “On the State Registration of Real Estate,” entered into force on 01.01.2017, with respect to notices concerning, inter alia: the suspension of state cadastral registration or state title registration or the refusal to proceed therewith; the suspension of state cadastral registration or state title registration and the documents submitted in connection therewith.

The order differentiates between the different methods for Rosreestr’s notification of applicants, depending on the type of notification. For instance, if documents for state title registration were originally submitted in paper form, notification of state-registration refusal is issued to the applicant in person or sent by post to the address indicated in the respective application.

RF Ministry of Economic Development Order No. 679 dated 27.10.2016 “On Amendments to Certain Orders by the RF Ministry of Economic Development Concerning State Cadastral Registration and the State Registration of Real Estate Rights”

The order makes certain technical changes to numerous acts governing state registration and cadastral registration. Rosreestr is also tasked with determining the cadastral value of real estate properties subject to application during the effective term of the moratorium on the performance of cadastral valuation in the event of receipt by 20.12.2016 of the respective decision by the concerned state agency of the corresponding RF constituent entity.9

Among other things, the list of information on a building in the Uniform State Real-Estate Register must now include information on the parking spaces located therein (thereat), as well as information on the integrated real estate complex of which the building is a part. The content of entries on parking spaces is now subject to regulation (inter alia, mandating the indication of parking-space number on the respective building’s floorplan). Moreover, the order introduces the regulation of entries to the effect that the transaction providing the basis for the registration of the transfer of title to the property was concluded without the required consent of the respective body of the concerned legal entity, state agency or third party. The order enters into force on 1 January 2017.

9 See point 1 of this overview.

RF Ministry of Economic Development Order No. 792 dated 07.12.2016 “On Establishing the Minimum- and Maximum-Allowable Dimensions of Parking Spaces”

In the furtherance of certain amendments made to the Civil Code of the Russian Federation (hereinafter – the “RF Civil Code”) and Federal Law No. 218-FZ “On the State Registration of Real Estate,” threshold dimensions of a parking space have been established whereby it can be entered into cadastral registration and recognized as a standalone real estate property.

The minimum dimensions total 5.3 by 2.5 meters, the maximum – 6.2 by 3.6 meters. The order enters into force on 1 January 2017.

Amendments to the laws of St. Petersburg and Leningrad Region

St. Petersburg Law dated 23.11.2016 “On Amendments to the St. Petersburg Law “On the Property Taxation of Organizations””

The tax rate with respect to non-residential properties as of 01.01.2017 is established in the amount of 1% of their cadastral value.

Transfer by investors of cash funds under the provision of state-owned land plots

St. Petersburg Government Resolution No. 865 dated 06.10.2016 “On the Amendment of St. Petersburg Government Resolution No. 275 Dated 15.03.2005 ‘On the Procedure for the Transfer by Investors of Cash Funds under Agreements Concluded Pursuant to St. Petersburg Law No. 282-43’”

The resolution entered into force on 06.10.2016 and envisions that under the provision of a land plot underlying the subject matter of a public-private partnership agreement and (or) deemed necessary for performance of the activity envisioned by a public-private partnership agreement, as well as in the event of the provision of a land plot underlying the subject matter of a concession agreement and (or) deemed necessary for the concessionaire’s performance of the activity envisioned by a concession agreement, the procedure for the transfer of cash funds under the respective lease agreements is established by the agreements themselves – not by applicable legislation.

St. Petersburg Government Resolution No. 905 dated 19.10.2016 “On Amendments to St. Petersburg Government Resolution No. 275 Dated 15.03.2005”

The resolution entered into force on 19.10.2016 and changed the procedure for the remittance of payments under the provision of St. Petersburg-owned real estate properties. The resolution differentiates between the procedure for the transfer of cash funds: (i) under the provision of a land plot under a lease agreement on investment terms concluded based on the results of competitive bidding in the form of tender (hereinafter – an Agreement Based on the Results of Competitive Bidding), and (ii) under the provision of St. Petersburg-owned real estate properties for the purposes of construction, reconstruction and retrofitting for modern use, with the exception of Land-Plot Lease Agreements Based on the Results of Competitive Bidding (hereinafter – an Agreement on Investment Terms).

In the event of the conclusion of an Agreement on Investment Terms, aside from the transfer of cash funds in full within a month’s time of the conclusion of the agreement, the investor shall be entitled to the remittance of payment in equal quarterly installments, payable by the 10th day of the first month of the payable calendar quarter throughout the entire term of construction / reconstruction / retrofitting for modern use, as indicated in the respective St. Petersburg Government resolution.

Under the conclusion of an Agreement Based on the Results of Competitive Bidding, transfer is made annually at the discretion of the investor: (i) in full within a month’s time of the moment of signing of the Agreement Based on the Results of Competitive Bidding and thereafter no later than the date and month of payment of the first annual lease payment under the agreement; or (ii) in equal quarterly installments, payable by the 10th day of the first month of the payable calendar quarter. That said, the amount subject to transfer for the quarter shall be charged interest equal to the refinancing rate of the RF Central Bank in effect on the date of signing of the Agreement Based on the Results of Competitive Bidding, for the period of time running from the date of signing of the respective agreement to the payment date established therein (for the first year of lease-payment transfer), and thereafter on an annual basis on the date and month of signing of the Agreement Based on the Results of Competitive Bidding, for the period of time running from that date to the payment date established therein (for subsequent years of lease-payment transfer).

Other changes

St. Petersburg Government Resolution No. 1259 dated 28.12.2016 “On the Amendment of St. Petersburg Government Resolution No. 98 Dated 16.02.2015 and Creation of the State Budgetary Institution ‘Municipal Administration for Cadastral Valuation’ ”

The resolution envisions shifting to state cadastral valuation according to the rules of Federal Law No. 237-FZ dated 03.07.2016 “On State Cadastral Valuation”10 in St. Petersburg as of 1 February 2017. In the furtherance of this law, the Committee for Property Relations is tasked with the creation, by 1 February, of the State Budgetary Institution “Municipal Administration for Cadastral Valuation,” expected to perform valuations together with State Unitary Enterprise “Municipal Department for Real-Estate Inventory and Appraisal,” as well as with taking the legal steps required for the operational start up of the aforementioned institution.

The resolution enters into force on 1 January 2017.

10 For a more detailed analysis of this federal law, please see the Dentons Overview for Q3 2016. We would be pleased to provide you with a copy of this overview at your request.

St. Petersburg Government Resolution No. 1263 dated 28.12.2016 “On the Amendment of St. Petersburg Government Resolution No. 650 Dated 28.04.2004”

The resolution vests the Construction Committee with the authority to issue conclusions as to the compliance of the developer and the project declaration with the requirements established by Part 2, Article 3, Articles 20-21 of Federal Law No. 214-FZ.11

As you may recall, as of 01.01.2017, the registration of an agreement on participation in shared construction requires the provision of the respective conclusion.12

The resolution enters into force on 01.01.2017.

11 Federal Law No. 214-FZ dated 30.12.2004 “On Participation in the Shared Construction of Apartment Buildings and Other Real Estate Properties and the Amendment of Certain Legislative Acts of the Russian Federation.” 12 Clause 2, Article 5 of Federal Law No. 304-FZ dated 03.07.2016 “On Amendments to the Federal Law “On Participation in the Shared Construction of Apartment Buildings and Other Real Estate Properties and the Amendment of Certain Legislative Acts of the Russian Federation” and Individual Legislative Acts of the Russian Federation.”

St. Petersburg Government Resolution No. 882 dated 06.10.2016 “On the Amendment of St. Petersburg Government Resolution No. 1679 Dated 19.10.2004”

As you may recall, in the summer of 2016, St. Petersburg Law No. 508-100 dated 24.11.2009 “On Town-Planning Activity in St. Petersburg” was updated with a new procedure in the field of construction – the provision of conclusions on the compliance of design documentation with the consolidated plan for underground utilities and structures. The provision of a conclusion on the compliance of design documentation with the consolidated plan for underground utilities and structures is one of the procedures in the field of residential construction,13 as well as in the field of the construction of water-supply facilities and water-discharge facilities.14

Under this resolution, as of 06.10.2016, the St. Petersburg Committee for Town-Planning and Architecture (KGA) is vested with the authority to provide such conclusions. As of the date of this overview, the administrative regulation governing this procedure has not yet been approved.

13 Clause 137 of RF Government Resolution No. 403 dated 30.04.2014. 14 Clause 108 of RF Government Resolution No. 1138 dated 07.11.2016.

St. Petersburg Government Resolution No. 917 dated 24.10.2016 “On Affirmation of the Procedure for the Organization and Exercise of Regional State Oversight over the Condition, Maintenance, Preservation, Use, Popularization and State Protection of Regionally-Recognized Objects of Cultural Heritage, Locally-Recognized (Municipally-Recognized) Objects of Cultural Heritage, and Newly-Identified Objects of Cultural Heritage”

As of 08.11.2016, regional oversight over objects of cultural heritage is exercised through the performance of audits by the respective parties (public and private entities) of measures for oversight over the condition of various objects of cultural heritage and performance of the requirements of applicable legislation in the area of their preservation.

This oversight is exercised, inter alia, via the performance of audits by the responsible officials from the Committee for the State Control, Use and Preservation of Monuments of History and Culture (hereinafter – KGIOP), who, upon the identification of violations:

  • Issue instructions and (or) file statements of claim in court
  • Take measures to eliminate the violations with an indication of the timeframe for their elimination, inter alia, through the issuance of instructions, as well as measures to oversee the elimination of violations, to prevent violations and to guard against the causing of damage to objects of cultural heritage, as well as measures envisioning prosecution of those responsible for allowing the identified violations.

In the event of the absence of the director or other authorized representative of the concerned legal entity under the performance of an audit, as well as in the case of the audited entity’s refusal to sign off on its familiarization, or refusal to familiarize itself, with the audit report, within 5 days of its compilation, the audit report must be sent by registered mail to the audited entity with confirmation of delivery, which is then appended to the copy of the audit report kept on file at KGIOP.

St. Petersburg Government Resolution No. 997 dated 09.11.2016 “On Amendments to St. Petersburg Government Resolution No. 438 Dated 21.05.2015”

As of 09.11.2016, the procedure for interaction among the executive state bodies of St. Petersburg in the preparation of documentation on territorial planning has been clarified.

The resolution sets forth that for the purposes of decision-making on the preparation of territorial planning drafts, KGA must now send an inquiry:

  • To the St. Petersburg Investment Committee requesting the provision of information on the adoption, with respect to land plots whose disposal is carried out by St. Petersburg, of decisions on the tentative approval of the provision of the aforementioned land plots for the purposes of construction, reconstruction and retrofitting for modern use
  • To the Construction Committee requesting the provision of information on the measures implemented thereby pursuant to the respective decisions on budgetary investments in state-owned properties and on land plots concerning which the respective decision has already been made on tentative approval of the location of the property, confirming the act on selection of the corresponding land plot.

St. Petersburg Committee for Property Relations Instruction No. 117-r dated 29.09.2016 “On Amendments to Committee for State-Property Management (KUGI) Instruction No. 187-r Dated 01.02.2000”

As of 29.09.2016, information on the effectively-vacant stock of non-residential properties constituting the property of the St. Petersburg Treasury is subject to publication on the official website of the Committee for Property Relations.

Leningrad Regional Committee for Town-Planning and Architecture Order No. 53 dated 13.10.2016 “On Amendments to Leningrad Regional Committee for Town-Planning and Architecture Order No. 6 Dated 27.12.2014 ‘On Affirmation of the Regulation Governing the Procedure for Approving (Modifying) the Draft Rules of Land Use and Development of the Urban and Rural Settlements, Municipal Districts of Leningrad Region’ ”

As of 18.10.2016, the procedure for approving the Rules of Land Use and Development (RLUD) of municipal formations (hereinafter – “MF”) in Leningrad Region has changed.

The review and approval of draft RLUD is referred to the competency of a specific structural division of the Leningrad Regional Committee for Town-Planning and Architecture (hereinafter – the LR KGA): the Department for Town-Planning Zoning and Documentation on Territorial Planning.

The order establishes the list of grounds for the forwarding of draft RLUD for revision following their initial consideration but prior to the holding of public hearings, such as for non-compliance with territorial-planning documents, the respective decision by an MF agency and the preparation of other RLUD, the requirements of the RF Town-Planning Code, the procedure for the preparation of draft RLUD, etc.

Grounds for the refusal to approve draft RLUD have been supplemented with grounds in the form of the con-conformance of draft RLUD with the version of the draft previously undergoing expert review at LR KGA, with the exception of modifications made to the draft based on the results of public hearings.

St. Petersburg Government Committee for Town-Planning and Architecture Instruction No. 209-25 dated 10.11.2016 “On Amendments to Committee for Town-Planning and Architecture Instruction No. 209-1 Dated 05.02.2016”

As you may recall, approval of the architectural and town-planning appearance of a residential property in St. Petersburg is a compulsory procedure for the obtainment of a town-planning solution for the underlying land plot. Earlier, KGA Instruction No. 209-1 within the scope of the procedure for the approval of architectural and town-planning appearance envisioned the applicant’s provision of various information / documents, including information on the total area of the underlying land plot, on the total area of the development, on the total area of apartments and integrated premises, a description of the compositional devices and façade solutions of residential structures, diagrams depicting the positioning of underground utilities and structures, and panoramic view. It should be noted that these requirements have been the subject of repeated criticism by the business community for the simple reason that the respective information only becomes reliably known at the stage of the residential building’s design – not at the stage of obtainment of the town-planning solution for the underlying land plot.

As of 10.11.2016, the requirements governing the composition of documents subject to submission for the approval of architectural and town-planning appearance have been modified. The information / documents indicated above have been excluded.

St. Petersburg Government Committee for Town-Planning and Architecture Instruction No. 11-n dated 15.11.2016 “On Affirmation of the Administrative Regulation of the Committee for Town-Planning and Architecture for the Provision of State Services Involving the Preparation, Approval and Issuance of Town-Planning Solutions for Land Plots”

As of 15.11.2016, a new Administrative Regulation is in effect for the provision of state services involving the preparation, approval and issuance of town-planning solutions for land plots.

The list of subjects of the provision of state services remains the same and encompasses KGA, St. Petersburg Administration of Rosreestr, Federal State Budgetary Institution “Federal Treasury Enterprise Rosreestr for St. Petersburg;” KGIOP; Committee for Energy and Utilities.

The total timeframe for the provision of state services is similar to that under the previous administrative regulation and amounts to no more than 30 days. That said, the timeframe for the performance of certain administrative procedures has changed; for instance, the timeframe for the preparation of draft town-planning solutions has shortened from eight to seven days.

The list of administrative procedures under the provision of state services has been supplemented by a procedure for the correction of technical errors in the approved town-planning solution. This procedure is initiated by application on the part of the interested party, appended with the documents required for the provision of the respective state services. Maximum performance timeframe – five days. The result is either refusal by way of notification of the absence of grounds for error correction, or the issuance of a new town-planning solution.

The instruction separately establishes the obligation of KGA, in the event of its receipt from the competent executive state bodies of St. Petersburg of information concerning the existence of a technical error in the town-planning solution for a land plot, to send notice to that effect to the applicant receiving the erroneous town-planning solution.

Administrative regulations of Leningrad Region with respect to the disposal of land plots held in undelineated state ownership

Leningrad Region has adopted a series of administrative regulations, effective as of 30.09.2016 and governing the following procedures:

  • Procedure for the conclusion of an agreement on the redistribution of land and (or) land plots whose state ownership is undelineated, located in the territory of Leningrad Region, and land plots held in private ownership15
  • Procedure for the establishment of easement over a land plot whose state ownership is undelineated, located in the territory of Leningrad Region16
  • Procedure for the tentative approval of the provision of a land plot whose state ownership is undelineated17
  • Procedure for approval of the erection of structures on land and land plots whose state ownership is undelineated, without provision of the underlying land plots or the establishment of easement18
  • Procedure for the provision of land plots whose state ownership is undelineated into ownership (for a fee/without a fee), lease, gratuitous use, permanent (indefinite) use without benefit of competitive bidding.19

15 Leningrad Regional Committee for State-Property Management Order No. 27 dated 30.09.2016. 16 Leningrad Regional Committee for State-Property Management Order No. 28 dated 30.09.2016. 17 Leningrad Regional Committee for State-Property Management Order No. 29 dated 30.09.2016. 18 Leningrad Regional Committee for State-Property Management Order No. 30 dated 30.09.2016. 19 Leningrad Regional Committee for State-Property Management Order No. 31 dated 30.09.2016.

Legal precedents

In the case in question, a land plot whose title had been registered in the name of the claimant was subsequently provided into the lease and then into the ownership of another party—the one that had constructed a building on the plot. The claimant filed a claim in court challenging the title of the second owner. The court of first instance indicated that the claimant had effectively withdrawn from maintenance of the land plot and refused to satisfy her claim demands.

However, the RF Supreme Court found that the bad faith of the owner of a land plot in evading its proper maintenance cannot serve as grounds for the termination of that person’s title to the respective land plot. The Judicial Division for Civil Cases motivated its conclusion by citing the absence in applicable legislation of any such grounds for the termination of title.

Under a lease agreement for municipal premises, the amount of lease payment was determined using the method approved by the local authorities. The calculation formula did not include a fee for use of the land plot on which the building with the premises was situated. Several years into the effective term of the agreement, the lessor suddenly decided to demand separate payment for use of the land.

The RF Supreme Court did not support this demand: the lease payment originally agreed upon in the agreement encompasses use of both the premises as well as the land plot. This position is also aligned with the approach taken by the RF Supreme Arbitrazh (State Commercial) Court: payment for the use of a property usually includes the fee for use of the underlying land plot.

The conclusion of transactions involving property that has been seized is not prohibited, insofar as it does not constitute a legal action involving the disposal of property in the absence of an act witnessing transfer of the property serving as the subject matter of the conclusion of the respective transaction. The only thing capable of being found legally void would be the physical transfer of the seized property – not the conclusion of the respective agreement. A similar stance was previously expressed by the RF Supreme Arbitrazh (State Commercial) Court.

Resolution No. 54 by the Plenum of the RF Supreme Court dated 22.11.2016 “On Certain Issues of the Application of the General Provisions of the Civil Code of the Russian Federation on the Establishment and Discharge of Obligations”

The Plenum of the RF Supreme Court expressed its position on a broad range of issues associated with the law of obligations. Among other things, it noted the following.

A contractual term stipulating payment for exercise of the right to unilateral refusal is void where this right is envisioned by binding norm – for instance, the right to unilateral refusal in lease agreements concluded for an indefinite term (Article 610, Clause 2 of the RF Civil Code).

Also clarified is the provision stipulating the right of a debtor to demand that the lender’s representative provide proof of its authorities under the discharge by the debtor of its obligations. That said, the parties are entitled to establish in their agreement the procedure for confirmation of the authorities of the lender’s representative: for example, the debtor may contact the lender directly requesting prompt confirmation of the authorities of its representative in simple written form.

Moreover, a clarification is provided of the new provisions of the RF Civil Code concerning optional obligations. The right of a debtor to substitute primary performance with another (optional) performance may be agreed upon by the parties at the time of conclusion of the agreement from which the primary obligation stems, or subsequently but prior to performance of the primary obligation. Unless otherwise provided by applicable law, other legal act or the agreement, the lender must accept optional performance from the debtor, including during the period of the delay in performance of the primary obligation.

Aside from the foregoing, the RF Supreme Court affirmed that the start and end dates under contracting agreement may be determined by referencing the remittance of advance payment.

Overview of case law in matters involving challenges to the refusal to perform cadastral registration (affirmed by the Presidium of the RF Supreme Court on 30.11.2016)

The Supreme Court of the Russian Federation (hereinafter – the RF Supreme Court) has sent clarifications to the arbitrazh (state commercial) courts and courts of general jurisdiction concerning challenges to the performance or refused performance of cadastral registration according to the procedural rules stemming from public law. The RF Supreme Court also noted that adoption of the Federal Law “On the State Registration of Real Estate” does not affect the established grounds in applicable case law for the refusal of cadastral registration, since they are essentially analogous in more recent legislation.

The overview finally affirmed numerous previously-established positions on matters of cadastral registration, from which practice has sometimes deviated (including with respect to the impossibility of the cadastral registration of asphalted surfaces and other amenities, piling fields as construction-in-process, awnings and other temporary structures; on the possibility of the cadastral registration of part of a building or premises solely on condition of their independence and isolation). Moreover, a number of less obvious conclusions have also been formulated.

Thus, the cancellation and exclusion form the state real-estate cadaster of temporary information on a land plot is deemed unlawful under Article 10 of the RF Civil Code by virtue of the fact that such actions are performed for the purposes of hindering a person’s right to the privatization or lease of a land plot, rights to which have not been registered on anyone’s behalf pursuant to Article 39.20 of the RF Land Code. The courts had previously taken a formal position on this issue and permitted the exclusion of such information by application of the respective state agency or local self-government authority irrespective of the reasons or grounds – even if the territory of a land plot whose rights have not yet been registered accommodates a building owned by a third party laying claim to that plot. That said, this position is not relevant for properties first subjected to cadastral registration after 1 January 2017, since temporary information will no longer be entered in the state real-estate cadaster.