Is a new friend better than two old ones?

The Property Relations Committee started work as successor of the abolished KUGI and KZRiZ in St. Petersburg

On April 21, 2015, a new committee – the Property Relations Committee (hereinafter the “PRC”) – started its work in St. Petersburg based on Resolution No.98 of the Government of St. Petersburg “On the Property Relations Committee of St. Petersburg and on acknowledging void certain resolutions of the Government of St. Petersburg” dated February 16, 2015, which has entered into force.

The PRC was organized by merging two independent structures – the Committee for Municipal Property Management (‘KUGI’) and the Committee for Land Resources and Land Tenure (‘KZRiZ’). The information on the planned reorganization for purposes of enhancing efficiency of state property management became available in January.

The PRC will exercise the powers of both the abolished state bodies. According to the web site of the new authority, the PRC structure consists of 21 directorates including 62 departments, as well as 16 PRC district departments that are granted the powers of the district departments of KZRiZ.

Therefore, from now on the PRC is in charge of issues such as privatization and other disposition of state property, adopting decisions on conducting cadastral property assessment, land inventory, as well as concluding and terminating lease agreements.

The state unitary enterprise Municipal Directorate of Real Estate Inventory and Assessment (‘GUP GUION’) responsible for conducting cadastral assessment and the budgetary institution “Center of enhancing efficiency of state property use” also fall under PRC control.

Forecasts on how such restructuring will impact business are currently vague. On the one hand, the reform was carried out primarily for the city’s benefit – for the purposes of monitoring and maximum control over municipal property management. Even if entrepreneurs’ interests were considered within the context of the reform, they were not top priority.

On the other hand, business representatives have in the past actually faced administrative barriers in the event of need to cooperate with KUGI and KZRiZ simultaneously. Resolving a basic issue within one authority literally required passing several instances in the other committee, and the absence of a unified information database sometimes produced insuperable challenges. It would be logical to expect that the merger of the two bodies should settle the situation; however, one should be ready for new rules of communication with the new committee and for the respective restructuring of the communication that has already been established.

From a practical point of view, the tenants and other contractors of the abolished KUGI are recommended to clarify the details of the PRC for performing settlements under the current agreements, as well as to pay attention to the new structure of the committee for sending appeals and obtaining advice when needed.

Resolution No.98 of the Government of St. Petersburg “On the Property Relations Committee of St. Petersburg and on acknowledging void certain resolutions of the Government of St. Petersburg” dated February 16, 2015

Igor Gorokhov    Senior Associate   St. Petersburg   igorokhov@cls.ru   Tel.: +7 (812) 346 79 90

Anastasya Kuzmina   Associate   St. Petersburg       Tel.: +7 (812) 346 79 90

Additional notes

Should any questions arise in connection with the above or if you need any additional materials, please contact Igor Gorokhov or Anastasia Kuzmina, St. Petersburg Office of Capital Legal Services.

This Information letter keeps the clients of Capital Legal Services and other interested parties abreast of information that may, to any extent, affect their activity or cater to their particular interests. The opinions and commentaries expressed in this information letter shall not be deemed as legal opinions and do not cancel the need to obtain legal advice or legal opinion on separate issues.