Amendments to federal laws

Federal Law No. 95-FZ dated 5 April 2016 “On Amendment of the Federal Law ‘On the Objects of Cultural Heritage (Monuments of History and Culture) of the Peoples of the Russian Federation’ and Article 15 of the Federal Law ‘On the State Real Estate Cadastre’”

The law enters into force on 3 October 2016 and introduces new protection zones for cultural heritage sites, which become effective as of the date a monument or ensemble (with a few exceptions) is added to the register of objects of cultural heritage and until the date of approval of the preservation-zone plan for the concerned object of cultural heritage.

The following restrictions on activity are imposed within the boundaries of the protection zone:

• The construction of capital structures is prohibited, with the exception of the construction of utility lines.
• The construction of capital structures entailing a modification of their existing parameters (height, number of stories, area) is prohibited, with the exception of the reconstruction of utility lines.
  It is important to bear in mind that the aforementioned construction/reconstruction prohibition is not applicable in cases where the respective construction permit is issued before the law enters into force (i.e., before 3 October 2016), as well as in cases of extension of the construction permit and/or change of developer.

The law also establishes the sizes of protection zones.¹

¹ For a more detailed analysis of this federal law, please refer to the Dentons Legal Notice “Freezing of Construction/Reconstruction Around “Unprotected” “Free-Standing” Monuments.” We would be pleased to provide you with a copy of it at your request.

Federal Law No. 139-FZ dated 1 April 2016 “On Amendment of the RF Criminal Code and Certain Legislative Acts of the Russian Federation Concerning the Establishment of Criminal Responsibility for Violation of Legislative Requirements on Participation in the Shared-Equity Construction of Apartment Buildings and/or Other Residential Structures”

The law entered into force on 12 May and became the latest phase in the general trend towards tightening the regulation of shared-equity construction. The law introduces the long-discussed criminal responsibility of developer executives (from compulsory community service to imprisonment for up to five years) for raising funds from individuals in violation of the requirements of applicable law on participation in shared-equity construction.

Such a violation, committed on a large scale (RUB 3 million or more), is punishable by compulsory community service for a period of up to three hundred and sixty hours, or correctional work for a period of up to one year, or compulsory labor for a period of up to two years, or imprisonment for the same term, with or without supervised release for a term of up to one year.

Such a violation, committed on an especially-large scale (RUB 5 million or more), is punishable by compulsory community service for a period of up to four hundred and eighty hours, or correctional work for a period of up to two years, or compulsory labor for a period of up to five years, or imprisonment for the same term, with or without supervised release for a term of up to two years.

That said, voluntary repayment of illegally-raised funds or the taking of measures resulting in commissioning of the respective structure forms the basis for relief from criminal responsibility.

As you may recall, such a violation not committed on a large- or especially-large scale continues to result in civil liability.

Please note that the law fails to specify exactly what is meant by the expression “raising funds in violation of legislative requirements on participation in shared-equity construction.” We think it would be reasonable to take the approach developed through case law with respect to matters involving the respective administrative violations, whereby such a violation is understood as the conclusion of shared-equity construction agreements in violation of the requirements of shared-equity construction legislation (for instance, in cases where the developer has no construction permit, etc.).

Federal Law No. 144-FZ dated 23 May 2016 “On the Amendment of Parts One and Two of the Tax Code of the Russian Federation”

The law introduces the concept of “participant in a special investment contract” and provides that the preferences envisioned by the RF Tax Code with respect to regional investment projects may be applied to projects being implemented under federal special-investment contracts.

The law clarifies the procedure for applying the provisions of legislation on taxes and levies that worsen the position of investors under a special investment contract and establishes that the respective legislative amendments may not be applied to the legal relations arising under the contract prior to the earlier of the following dates: (1) expiration of the contract; (2) expiration of the tax rates, tax breaks, tax-assessment procedure and the procedure and timeframe for the payment of taxes of a temporary nature in effect as of the date of the contract’s conclusion.

Aside from provisions concerning special investment contracts, the law introduces a number of amendments to the provisions for regional investment projects. Thus, pursuant to the law, regional investment projects may now be implemented in all RF constituent entities.

The law also explains that the relevant preferences under regional investment projects are applicable in certain RF constituent entities (Buryatia, Yakutia, Tyva and Khakassia, the Trans-Baikal, Kamchatka, Krasnoyarsk, Primorsky and Khabarovsk Krais, the Irkutsk, Magadan and Sakhalinsk Regions, the Jewish Autonomous Region and the Chukotka Autonomous District), inter alia, under the commitment of investments in the amount of at least RUB 50 million for three years in a row or at least RUB 500 million for five years in a row (these amounts may be adjusted upwards by the law of the respective RF constituent entity).

It is important to note that the profit-tax break is only applicable in the event that the revenue generated from the sale of goods under implementation of the regional investment project accounts for at least 90% of the total revenues counted for the purposes of determining the tax base for profit tax.

Although the law entered into force on 23 June 2016 (aside from the provisions on preferential tax rates, which enter into force as of 1 January 2017), the periods for determining investment amounts start running on 1 January 2016, meaning that companies cannot secure the right to receive preferences before 1 January 2019.

Federal Law No. 119-FZ dated 1 May 2016 “On the Particulars of the Granting to Individuals of State- or Municipally-Owned Land Plots Located on the Territory of RF Constituent Entities Forming Part of the Far Eastern Federal District, and the Amendment of Certain Legislative Acts of the Russian Federation”

Pursuant to the law, which entered into force on 2 May 2016, RF citizens are entitled to receive, for uncompensated use and a term of five years, a land plot measuring up to 1 hectare to pursue any activity not prohibited by applicable law on the territory of the Republic of Sakha (Yakutia), Kamchatka Krai, Primorsky Krai, Khabarovsk Krai, Amur Region, Magadan Region, Sakhalin Region, the Jewish Autonomous Region and the Chukotka Autonomous District. Upon expiration of the uncompensated-use term, the plot may be bought out or leased, provided it has been put to proper use over the course of the previous five years.

That said, prior to 1 February 2017, applications may only be submitted by citizens registered in the respective RF constituent entities, and only thereafter by all RF citizens.

Federal Law No. 334-FZ dated 3 July 2016 “On Amendment of the RF Land Code and Certain Legislative Acts of the Russian Federation”

Of the most important amendments provided by the law, worthy of particular mention is the scaling back of land-conservation requirements. Thus, pursuant to the law, the following land-conservation measures need no longer be performed by land-plot owners, land users, landowners and leaseholders: (i) conservation of soil and soil fertility; (ii) clean-up of polluted land, including biogenic pollution; (iii) timely land rehabilitation; (iv) preservation of soil fertility and the use of such measures in work involving soil disturbance; (v) protection of plants and plant products against hazardous organisms (pests). That said, the law introduces a requirement stipulating the fertility recovery of agricultural land as a mandated land-conservancy measure.

The law introduces a novelty, whereby the obligation to rehabilitate land is imposed on those whose activities have resulted in a deterioration in land quality, that is, on the immediate doer of “harm.” In the previous version of Art. 13 of the RF Land Code, this obligation was assigned to the owners of land plots, which, in our view, imposed additional and unreasonable costs on landowners in the event that the deterioration in land quality was not their fault.

The law also modifies the list of agencies responsible for the granting of land plots. In the law, the list appears as follows: municipal districts do the granting with respect to rural areas and inter-settlement territories; urban districts – with respect to the given urban territory; urban localities – with respect to the given locality territory; and cities of federal importance – with respect to the territories of the respective constituent entities.

The law have entered into force on 4 July 2016, save for the amendments related to granting of land plots, which will enter into force on 1 January 2016.

Federal Law No. 351-FZ dated 3 July 2016 “On the Amendment of Article 24-1 of the Federal Law ‘On the State Registration of Rights to Real Estate and Transactions Therewith’ and Article 42 of the Federal Law ‘On the State Registration of Real Estate’”

Pursuant to the amendments, transactions involving land shares are not subject to notarization. As you may recall, a land share is understood to mean a share in the common ownership of agricultural land plots in cases where ownership rights arose as a result of the privatization of farmland prior to the entry into force of the Federal Law “On the Turnover of Agricultural Land” (Art. 15).

The law have entered into force on 4 July 2016.

Federal Law No. 362-FZ dated 3 July 2016 “On the Amendment of Articles 72 and 73 of the Federal Law ‘On the Central Bank of the Russian Federation (Bank of Russia)’ and Article 33 of the Federal Law ‘On Banks and Banking’”

The Federal Law expands the authorities of the Central Bank of the Russian Federation (hereinafter – the RF CB) in the area of banking regulation and banking oversight. In particular, the RF CB is entitled to audit the pledged items accepted by banks as security for loans (in the broader sense, including credits), as well as the activities of legal entities acting as borrowers or pledgors. The audits are conducted for the purposes of valuating the assets and liabilities of the respective lending institution, including the sufficiency of doubtful-loan provisions.

These audits entail establishing the actual existence of the pledged item and performing its inspection, establishing the legal status of the pledged item and estimating its value, based on federal valuation standards. That said, the Federal Law stipulates a number of restrictions binding on the RF CB under its performance of such audits: thus, the RF CB is not entitled to inspect the movable and immovable property owned by a private individual but not used for the purposes of entrepreneurial activity.
Banks will now have to include a clause in loan agreements and pledge agreements stipulating the obligation of the borrower/pledgor to provide the bank with the relevant documents (information) and perform the other actions required for the aforementioned audits, which certainly amounts to an additional burden for borrowers/pledgors. The law provides that this obligation shall be included even in those loan agreements which have already been concluded and are effective within 180 days after entrance of this law into force.

In this connection, we recommend paying more attention to the wording of the lending agreements offered by banks.

The law have entered into force on July 4, 2016, save for the obligation to provide the bank with documents and information for audit which will enter into force on 4 August 2016.

Federal Law No. 315-FZ dated 3 July 2016 “On the Amendment of Part One of the RF Civil Code and Certain Legislative Acts of the Russian Federation”

The main novelty of the law is the recognition of parking spots as real estate properties, provided their boundaries are described in the manner established by legislation on cadastral registration. The law also introduces the definition of parking spots into the RF Civil Code. According to the revised version of the RF Civil Code, a parking spot is an individually-assigned part of the building or structure intended solely for the parking of vehicles which is not walled off or is only partially walled off by construction cladding or other enclosures and whose boundaries are described in the manner established by legislation on state cadastral registration.

This determination of the status of parking spots ushers in a series of amendments to other laws (on mortgage, on the state registration of real estate). In particular, it provides that in the technical plan, the location of a parking spot is established via graphic depiction on the floor plan or partial floor plan of the building or structure (in the event that the building or structure has no floors, then on the building or structure plan) in the form of the geometrical shape corresponding to the parking spot’s boundaries.

The law also changes the procedure for the sale of shares in joint shared property (JSP): other JSP owners enjoy the preferential right to purchase shares in immovable property for a period of one month from the date of sale notice, and in movable property for a period of 10 days from the date of sale notice. That said, if the seller receives a refusal within this period of time, he is entitled to sell the share prior to its expiration.

The aforementioned provisions of the law enter into force as of 1 January 2017.

A logical and anticipated amendment has been made to Art. 317.1 of the RF Civil Code on statutory interest, which is now only subject to application where envisioned by agreement or applicable law. The law also introduces amendments to Art. 395 of the RF Civil Code, whereby interest on arrears is determined by the key rate of the Central Bank for the corresponding periods (currently the average rate on individual deposits), although another rate may be envisioned by agreement or applicable law. The aforementioned amendments to Arts. 317.1 and 395 of the RF Civil Code enter into force as of 1 August 2016.

Federal Law No. 275-FZ dated 3 July 2016 “On Amendment of the Federal Law ‘On Concession Agreements’”

The law introduces sweeping amendments to Federal Law No. 115-FZ on Concession Agreements with respect to the implementation of projects involving heating systems, central hot-/cold-water-supply systems and/or sewerage systems and the individual elements of such systems: an entirely new chapter of the Law is devoted to the regulation of concession agreements involving such facilities.

In particular, the law stipulates: 1) participation in such agreements by RF constituent entities (as a third party, in cases where the constituent entity has not transferred powers of state tariff regulation in the given area to the municipal level); 2) the possibility of concluding such agreements with respect to facilities whose composition includes unregistered immovable property; 3) detailed provisions on the guarantees of concessionaire rights under such agreements; 4) prohibition against foreign legal entities acting as concessionaires under such agreements, etc.

The law also provides for a number of amendments to the General Provisions of the Law on Concession Agreements. The law enters into force on 1 January, 2017.

Federal Law No. 304-FZ dated 3 July 2016 “On Amendment of the Federal Law ‘On Participation in the Shared-Equity 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”

The law entails a tightening of the requirements imposed on developers under agreements on participation in shared-equity construction. In particular, developers raising funds from private citizens will be compelled to observe requirements on minimum authorized capital (depending on the area of the properties they build), no information on them may be contained in the register of unscrupulous providers, and their arrears in terms of taxes, levies and other compulsory payments for the previous year must not exceed 25% of the balance-sheet value of their assets.

Moreover, the law introduces detailed rules governing information disclosure by developers (irrespective of whether they raise their funds from private individuals or legal entities). Among other things, the developer’s website must contain the property’s design declaration, the conclusion of the competent agency as to its compliance with the requirements of applicable law, draft shared-equity construction agreements and information concerning security for the developer’s performance of its obligations.

Requirements are introduced with respect to the content of transfer-acceptance acts, which must be affixed with instructions on the operation of the property being transferred. It is also proposed to directly establish what qualifies as a substantial alteration of design documentation constituting grounds for the termination of shared-equity construction agreements: a change in total area of more than 5%.

Another important amendment is the introduction of a fund aimed at protecting the rights of shared-equity construction participants under developer bankruptcy, which will be formed using developer contributions. The procedure governing its formation and management will be established by the RF Government.

The law will enter into force as of 1 January 2017, with the exception of certain provisions.

Decree of the Government of Russia No. 385 dated 30 April 2016 “On Amendment of the List of the Types of Structures That May Be Built on State- or Municipally-Owned Land or Land Plots Without the Granting of Said Plots or Establishment of Encumbrances, Affirmed by Decree of the Government of Russia No. 1300 dated 3 December 2014”

The decree entered into force on 13 May and expanded the list of structures that may be built on public land plots under the administrative procedure without the granting of said plots or formalization of encumbrances. In view of the amendments to the list, it is now possible under the aforementioned “simplified” procedure to engage in the construction, inter alia, of the following structures:

• Underground linear facilities, as well as their aboveground elements and components, as technologically required for their use, in cases where their installation does not require the respective construction permit.
• Water mains and water conduits of all types, in cases where their installation does not require the respective construction permit.
• Linear facilities of sewer (including linear) and wastewater-disposal systems, in cases where their installation does not require the respective construction permit.
• Elements of site upgrading and small architectural forms (gazebos, rotundas, verandas, awnings, sculptures, bus-stop shelters, lampposts, garbage urns, landscaping facilities, benches and footbridges).
• Power-transmission lines with a voltage class of up to 35 kV, as well as related transformer stations, distribution points and other equipment intended for the transmission of electric power, in cases where their installation does not require the respective construction permit.
• Heating networks of all types, including hot-water supply systems, in cases where their installation does not require the respective construction permit.
• Driveways, including service and access roads, in cases where their installation does not require the respective construction permit.

Decree of the Government of Russia No. 484 dated 30 May 2016 “On Price Formation in the Handling of Solid Municipal Waste” (together with the “rules for the regulation of tariffs in the handling of solid municipal waste”)

As you may recall, in force as of 1 January 2016 are the provisions of the Federal Law “On Production and Consumption Waste” with respect to the regulation of activity in the area of the handling of solid municipal waste (“SMW”). In particular, the law establishes that certain types of maximum tariffs in the area of SMW handling are subject to state regulation: the uniform tariff for SMW-handling services (established with respect to regional operators); the SMW recycling tariff; the SMW decontamination tariff; and the SMW landfill tariff (established with respect to SMW-handling operators). These SMW services may be provided at prices determined by agreement of the parties, which may not, however, exceed the approved tariffs.

In this connection, the decree that entered into force on 11 June 2016 and affirmed the Basic Principles of Pricing (the “Principles”) in the area of SMW handling and Rules of Rate Regulation in the area of SMW handling (the “Rules”) is one of the key bylaws in the area of SMW handling, which is expected to undergo updating.

One of the broader advantages of the Principles is the fact that tariff amounts must compensate the regulated organizations for their economically-justified costs and ensure an economically-viable rate of return from daily operations. The Principles establish the basic mechanisms and methods of establishing tariffs, as well as the grounds for applying the corresponding methods.

According to the Rules, tariffs are generally introduced as of the beginning of the regular calendar year for a period of not less than 12 months. Proposals on the establishment of tariffs are submitted by the regulated organization to the regulatory authority by 1 September of the year immediately preceding the next regularly-scheduled period of regulation. The procedure for the submission and consideration of the corresponding applications is established by the Rules.

Decree of the Government of Russia No. 423 dated 16 May 2016 “On the Amendment of Certain Acts of the Government of Russia”

As of 28 May 2015, the rules governing the sale of state and municipal property under privatization have been streamlined. The following are among the main procedural changes: information on the sale is now posted on the Internet only; the amount of advance deposit has increased from 10 to 20% of the price of the property; the timeframe for signing of the agreement has been shortened to five business days from signing of the sale record (previously, the agreement had been subject to execution within a period of 10-15 business days).

Order of the Ministry of Economic Development of Russia No. 931 dated 10 December 2015 “On Establishing the Procedure for the Accounting Registration of Ownerless Immovable Property”

In furtherance of the Federal Law “On the State Registration of Real Estate” dated 13 July 2015, which enters into force on 1 January 2017, the Ministry of Economic Development of Russia approved a new procedure for the accounting registration of ownerless immovable property.

In general, the Procedure corresponds to the currently-existing procedure for the accounting registration of ownerless immovable property.²

Under the Procedure, Rosreestr and its territorial bodies perform the accounting registration of buildings, structures and premises that have no owners or whose owners are unknown, or whose owners have waived title thereto.

Grounds for accounting registration are provided by the relevant statement from the respective body of local self-government, as well as from the executive bodies of cities of federal importance.

The Procedure contains the relevant procedures and timeframes of accounting registration and form of registration notice.

The order enters into force on 1 January 2017.

² Order of the Ministry of Economic Development of Russia No. 701 dated 22 November 2013 “On Establishment of the Procedure for the Registration of Ownerless Immovable Property”

Order of the Ministry of Economic Development of Russia No. 137 dated 16 March 2016 “On Approval of the Procedures and Means of Notification on the Status of Services Involving State Cadastral Registration and/or State Title Registration”

As of 1 January 2017, Rosreestr will notify applicants of the status of state services involving the cadastral registration or title registration of immovable property by SMS or email without charging a fee.

Rosreestr will also make notification of incoming information about the payment of state duties and acceptance of applications for processing, on the return of enclosed documents without consideration, on the performance and suspension of state cadastral registration or state title registration or refusal to perform registration. Notifications will be sent out by COB on the day during which the respective actions were taken.

Minstroy of Russia Order No. 98/pr dated 19 February 2016 “On Approval of the Code ‘Regulation on Architectural Supervision in the Construction of Buildings and Structures’ (along with Code 246.1325800.2016. Code)”

It should be noted that the Code has not been included on the list of national standards and codes whose application is mandatory.³

Pursuant to the Code, architectural supervision constitutes the control by the entity responsible for the preparation of design documentation over compliance in the construction process with the requirements governing design documentation and the working documentation generated therefrom. The Code establishes that architectural supervision forms part of construction control.

The Code defines the scope of work under the architectural control of construction, the procedure governing its organization and execution, and the main tasks and functions of the specialists carrying out architectural control.

³ The corresponding list was established by Decree of the Government of Russia No. 1521 dated 26 December 2014 “On Approval of the List of National Standards and Codes (Parts Thereof) Whose Mandatory Application Ensures Compliance with the Requirements of the Federal Law ‘Technical Regulation on the Safety of Buildings and Structures’”

Letter of Minstroy of Russia No. 13232-SM/02 dated 29 April 2016 “On the Issuance to SROs of Certificates of Clearance to Engage in Certain Types of Work”

Minstroy clarified that an SRO’s certificate of clearance to engage in design work is not required for the performance of work involving the construction, reconstruction or capital repair of a capital structure that has an impact on its safety, provided the entity carrying out construction work is not the developer of the respective design documentation.

“Instructional Memo for Pledgors and Pledgees Under the Filing of Notice on the Pledge of Movable Property,” approved by the Federal Notarial Chamber (“FNC”), and FNC Information “FAQ and Answers on the Work of the Register of Notices on the Pledge of Movable Property”

As you may recall, the pledge of movable property may be recorded in the register of notices on the pledge of movable property.

The FNC approved the instructional pamphlet for pledgors and pledgees under the filing of notice on registration of the pledge of movable property. The FNC reiterated that both pledgor and pledgee are entitled to send the notary notice of origination of the pledge of movable property. According to the general rule, however, notice on the amendment or deletion of information about the pledge is sent by the pledgee, while in the event of the pledgee’s liquidation, notice can be sent by the pledgor by court decision.

The instructional memo also contains the procedure for the filing of notices on the origination, amendment and deletion of pledge information.

In addition, the FNC published answers to FAQ, explaining, among other things, that issues concerning the filing of notices, procedure for paying registration fees and obtaining certificates of notice registration can be hammered out by agreement between the notary and the applicant.

FNC Letter No. 1033/03-16-3 dated 31 March 2016 “On the sending of Methodical Recommendations of the notary’s verification of the observance of a co-owner’s preferential right of purchase when certifying agreements on the sale to an outside party of a share of ownership rights to common immovable property,” as approved by decision of the FNC Management Board

Under the provisions of applicable law, transactions involving the sale to a third party of a share of ownership rights to common immovable property are subject to notarization for the observance of the preferential right of purchase. The Methodical Recommendations include provisions pertaining to the procedural aspects of the respective transactions, specifying, in particular, the content of the notification of co-owners of the upcoming sale, as well as refusal of the sale. They establish that if the co-owner of immovable property did not receive their share in the common property on the terms indicated in the seller’s notification, the preferential right of purchase terminates a month from the date of delivery of the respective notification.

Amendments to the laws of St. Petersburg and Leningrad Region

Decree of the St. Petersburg Government No. 524 dated 21 June 2016 “On St. Petersburg Land Use and Development Rules”

On 30 June, new St. Petersburg Land Use and Development Rules (“LDR”) entered into force, including, among other things, the new town-planning zoning map and updated town-planning regulations. The process of the decree’s adoption was accompanied by heated debate and discussion in the course of public hearings on consideration of the sweeping LDR amendments proposed by developers. One of the main sticking points that the developers were fighting over involved regulations on building height, and only some of these developers ended up getting their way.

The new LDR are of particular concern to developers who already have approved site planning designs (“SPD”) and site surveying designs (“SSD”). Please note that, pursuant to Clause 4.6 of the LDR, SPD and SSD approved prior to the entry into force of the LDR must be brought into compliance with the LDR prior to expiration of the target deadline for the St. Petersburg General Plan (by 2018). The LDR envision that until such time as compliance is achieved, the SPD and SSD shall be applied in the event of a discrepancy between the respective acts. The LDR also establish that the town-planning plans of land plots must indicate development parameters pursuant to the SPD and SSD approved prior to the entry into force of the LDR.

The aforementioned provisions suggest that the political will exists to support investors who had planned their long-term projects on the basis of the stability of economic turnover, insofar as they make it possible to retain the effectiveness of the construction parameters envisioned by the previously-approved SPD and SSD.

Legal precedents

Overview of Legal Precedents by the RF Supreme Court No. 1, approved by the Presidium of the RF Supreme Court on 13 April 2016

The RF Supreme Court has approved an overview of legal precedents touching on a number of issues pertaining to property and debt relationships.

In particular, the RF Supreme Court indicated that the placement of a lien on a land plot does not limit the owner’s right to judicial protection or right to establish the land plot’s boundaries.

Pursuant to other legal precedent, the parties are entitled to provide in a lease agreement for the amount of compensation that must be paid by one of the parties in the event of its unsubstantiated, unilateral repudiation of the agreement. It should be noted that this approach is applicable to more than just lease agreements.

The overview notes that the clause of a construction contract stipulating the contractor’s obligation to pay the customer a penalty in the event of its performance of work with deficiencies while simultaneously correcting these deficiencies for free is valid.

An important point of the overview is its clarification that a decision to expropriate a land plot for state (municipal) needs can only be made in exceptional cases of the public interest (socially-useful objectives) whose satisfaction would be impossible without the interference of the public authorities in private interests. Consequently, confiscation cannot be undertaken solely or primarily for the purposes of the derivation of profit by other private entities whose activities serve the public interest only indirectly.

RF Supreme Court Ruling No. 305-ES15-15840 dated 23 March 2016

Pursuant to the old version of the Federal Law “On Mortgage,” the parties had been entitled by agreement to exclude structures standing or being constructed on a land plot from mortgage. The RF Supreme Court noted that the lack of such a clause in the agreement must be interpreted as an expression of will in terms of the mortgaging of structures.

It should be noted that the current version of the Federal Law “On Mortgage” contains the right of parties to exclude only future structures from mortgage.

RF Supreme Court Ruling No. 305-ES15-15707 dated 24 March 2016

According to the position of the RF Supreme Court, breach of the term for the transfer of immovable property does not in and of itself give rise to the automatic duty on the part of the seller to return the corresponding amount of advance payment. The buyer is entitled, at its own discretion, to demand that the seller transfer the property or refuse the property altogether and demand the return of the pre-paid amount.

RF Supreme Court Ruling No. 305-ES15-13919 dated 11 April 2016 in Case No. А40-77475/2014

The RF Supreme Court affirmed that the restructuring of debt (modification of terms, amounts, currency, and other obligations) does not amount to its novation, in that no new obligation arises but remains as before, albeit in modified form. In particular, the running of statute of limitations periods does not change in this connection, just as the surety securing the restructured liability does not terminate.

Appellate Decision No. 5-APG16-12 by the Administrative Division of the RF Supreme Court dated 29 April 2016

On the heels of a series of high-profile Moscow events involving the extrajudicial demolition of unauthorized structures, the RF Supreme Court upheld the Moscow City Government’s approval of a list of structures subject to demolition without court order (despite the existence with respect to a few of the structures of registered title and court decisions recognizing their validity). The RF Supreme Court affirmed the legality of the list, indicating, inter alia, that it concerns the demolition of unauthorized structures located on land plots in non-delineated state ownership whose disposal is undertaken by the Moscow City authorities. A similar list for St. Petersburg has not yet been approved.

As you may recall, under Clause 4, Art. 222 of the RF Civil Code, the local self-government bodies of a city district are entitled to decide on and organize the demolition of unauthorized structures under extrajudicial procedures.