No registration in the Unified Register of Rights to Real Estate and Transactions Therewith – perhaps you are not the owner?
Draft Federal Law “On amending Federal Law ‘On state cadastral register’” (the “Draft Law”) was published by the Ministry of Economic Development of the Russian Federation in January 2014.
The Draft Law is designed for implementing one of the measures provided by the “road map” (“Improvement of state services quality in the field of state cadastral registration of real property and state registration of rights to real estate and transaction therewith”) approved by Decree No.2236-r of the Government of the Russian Federation dated December 01, 2012.
For example, in 2014 the “road map” provided for adoption of a federal law and a regulatory legal act establishing obligations of the municipal authorities to apply to court with claims on recognizing the right of municipal property to ownerless items, information on which is included in the state cadaster of immovable property in the event the rights to such objects are not registered in the Unified Register of Rights to Real Estate and Transactions Therewith (“EGRP”) by a certain date.
To develop this idea, the Draft Law of the Ministry of Economic Development of the Russian Federation proposed to include the following amendments:
In the event the ownership title to real property has not been duly registered within five years from the date the cadaster number is assigned, the cadaster authority shall within 10 days upon the expiry of the specified term send information about such property to the local authority, and in Moscow and St. Petersburg – to the appropriate authorized state authority of these cities.
The municipal authority (or authorized state authority of Moscow or St. Petersburg) must no later than 10 working days from the date of receiving such information from the cadaster, apply to the authority executing state registration of rights to real property for registration of such real property as an ownerless real estate item in accordance with the procedure prescribed by law.
The purpose of the property registration as an ownerless item is the same as before – to subsequently declare it municipal property.
The authors of the Draft Law see its essence in motivating the actual owners of the real property to register their rights in the EGRP in order to levy the respective taxes, in particular, the planned real estate tax for property, introduction of which was delayed.
The Draft Law gave rise to many questions. For instance, what shall the real estate owners do in the event their rights accrued before 1998, i.e. before introduction of Federal Law No.122-FZ “On state registration of rights to real estate and transaction therewith” dated July 21, 1997 and, accordingly, before creation of the EGRP? Should the ownership rights be registered or not?
Applicable legislation acknowledges such rights to real property as legally valid and does not oblige the owners of the real property purchased before 1998 to register their rights of ownership in the EGRP, saying that such registration can be effected only at the owner’s wish.
However, in this situation the lawmakers should also take into account the realities of the system and the registration procedure of rights to real estate adopted in the country.
Taking into account that EGRP has existed since only 1998, it does not contain information on previously accrued rights to real estate if no transactions were made with the property since then, and the Technical Inventory Bureau registered mainly technical data on the property. In this connection, the owners of the property of the said “transition period” can suffer from the incompletness of information contained in the state registers and databases and will have to register their right to real estate property in the EGRP while such obligation to register is not provided by law.
It is quite obvious that the Draft Law is “raw” and requires substantial improvements from the perspective of protecting the real estate property owners’ rights.
Should any questions arise in connection with the above or if you need any additional materials, please contact Elena Stepanova, Moscow Office of Capital Legal Services.
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