Many Lands

Many Lands

Perpetual Use of Land: Title re-registration

At the end of last year Federal law M42-FZ from Dec. 27, 2009 "On entering amendments to articles 2 and 3 of federal law 'On Putting in Force the Land Code of the Russian Federation'" and article 7 of federal law "On entering amendments to legislative enactments of the Russian Federation as regards the pinpointing of the terms and procedure of acquiring titles to state- and city-owned land plots."

The new version of article 3, par. 2 of federal law (J137-FZ "On Putting in Force the RF Land Code" from Oct. 25,2001 reads like this:

"Legal entities with the exception of those specified in article 3, par. 1 of the Law shall convert their right of permanent, perpetual use of land plots to the right of land lease or take possession of this land. Religious bodies shall furthermore convert their right to the right of gratis limited use, if they so desire, until Jan. 1, 2012 in keeping with the rules specified in article 36 of the given document."

From Jan. 1,2013theRFCodeon admin¬istrative offences will be complemented with article 7.34 introducing liability for the failure to meet the date and follow the prescribed procedure of re-registering the right of permanent, perpetual use of land plots to the right of land lease or the date and procedure of taking possession of land lots (the penalty of legal entities ranges from 20,000 to 100,000 rubles). But even the promised administrative prosecu¬tion does not accelerate the process of re-registration.

But while the subject is not new, there are several issues which are not directly addressed by the law in spite of a well-established forensic practice:

I. Re-registering the right of permanent, perpetual use of the land plot where no real estate objects are present

Perusal of this issue is caused by a large number of refusals to re-register the right of permanent, perpetual use of a land plot. Competent authorities refer to the lack of real estate objects on a plot as the main reason. However it is necessary to understand whether such refusals are legitimate.

Pursuant to article 3. par. 2 of Federal law fU37-FZ "On Putting in Force the RF Land Code" from Oct. 25, 2001, legal entities must convert their right of per¬manent (perpetual) use of land plots to the right of lease or take possession of land plots, if they so desire, until Jan. 01, 2012 in line with the prescriptions stipulated in article 36 of the RF Land Code.

A reference in the given article to the need to re-register the land titles in keeping with the rules stipulated in arti¬cle 36 of the RF Land Code gave rise to some uncertainty about what particular land plots were to be re-registered. Thus article 36 is devoted to acquiring the title to state-owned or city-owned land plots whereon buildings, structures and edifices are located.

And how should one become a title holder of those land plots (the right of permanent, perpetual use) where no real estate objects are situated? What are the guidelines for these cases?

To answer this question, we should turn to the existing forensic practice

Considering the disputes related to conversion by legal entities of their right to permanent (perpetual) use of land plots to the right of their lease or acquisition of land plots, courts are recommended to take into account that pursuant to article 3, par 2 of Federal law "On Putting in Force the RF Land Code" the parties to which land plots had been assigned before the enactment of the RF Land Code, have the right to choose between land lease or land acquisition in keeping with the procedure set in the rules of article 36 of the RF Land Code regardless of the purposes for which the said land plots had been assigned to them (point 1 of Resolution  №11 on some issues related to application of the Land legislation" issued by the Plenum of RF Supreme Arbitration Court from Mar. 24, 2005).

An identical administrative procedure titles to respective land plots doesn't imply that article 3, par. 2 of Law # 137 FZ and article 36 of the RF Land Code regulate same relations of acquiring land as private possession by vested interests.

Article 36 of the RF Land Code stipulates the following terms for land acquisition: holding titles to a building, structure or edifice, exceptional nature of the right to privatization or leasehold acquisition essential for using a real property.

Article 3, par. 2 of Federal law #137-FZ from October 25, 2001 stipulates special terms of land acquisition as private property - a permanent (perpetual) land use, time limits imposed on the land user to choose a future mode of land use. 

The lack of real estate object on a disputed land plot owned by the applicant cannot serve as an obstacle to his conversion of the right of permanent (perpetual) ownership (Resolution #A19-4880/08-55-F02-3740/08 of FAC BSO from Aug. 11, 2008 in relation to case #А19-4880/08-55).

Similar conclusions are contained in: 

1. Resolution of Presidium of RF SAC # 14711/05 from Mar. 21, 2006 

2. Resolution of NACP (19 arbitration court of appeal) #А41-К2-087/08 from July 18, 2008;

3. Resolution of FAC Volga relative to case #A65-8180/2008from Dec. 17, 2008;

4. Resolution of FAC Volga relative to case # A55-7789/2008 from Feb. 03, 2009

5. Resolution of FAC Volga relative to case #A65-8169/2008fromJan.28, 2009

6. Resolution of FAC Volga relative to case #A55-7788/2008 from Jan. 27, 2009.

7. Resolution of FAC Center rela¬tive to Case #A14-624-2008/16-13 from Nov. 10, 2008;

8. Resolution of FAC Northwest relative to Case «А56-2593/2006 from Jan. 22,2007

9. Resolution of FAC Northwest relative to Case #A56-28207/2005 from Aug. 28. 2006;

10. Resolution of FAC North Caucasus relative to Case Ш5-1042/2008 from Apr. 03. 2009

11. Resolution of FAC North Caucasus 8F08-4873/2008 from Aug. 21, 2008 relative to Case «А25-1553/07-14

12. Resolution of FAC North Caucasus relative to Case #F08-1562/2007 from Apr. 03,2007

Therefore there is a univocal position taken by courts on the first issue that land title holders have the right to convert their right of permanent perpetual land use to leasehold titles or else buy out land plots regardless of whether real estate objects exist on the given plots.

Another issue on the agenda is how to fix the land redemption price? Will this be a market price or it will be determined in a similar fashion as the price of land plots with real estate objects thereon?

II. Redemption value of land without a real estate object

So as per article 3, par. 2 of Federal law K137-FZ "On Putting in Force the RF Land Code" from Jan. 01, 2001, legal entities are bound to convert their right of permanent (perpetual) land use to leasehold titles or, if they so desire, to take possession of the plots until Jan. OX 2012 in accordance with the rules stipulated in article 36 of RF Land Code.

Pursuant to article 36, state-owned or city-owned land is sold to proprietors of buildings, structures or edifices located thereon at the price set by executive authorities and local government bodies. The procedure for fixing the price of this land and its payment is set relative to:

1) state-owned land plots by an authorized federal agency of the Russian Government;

2) Land plots owned by RF subjects (regions) or land plots with undefined ownership - by regional RF government agencies;

3) City-owned land plots - by local government bodies.

The price of land plots cannot exceed their cadastral value. Until the land price is fixed by an empowered executive author¬ity of the Russian Government a regional RF government agency or a local govern¬ment body, this price is deemed equivalent to its cadastral value.

In the same token article 2 of Federal law #137-FZ "On Putting in Force the RF Land Code" from Oct. 25, 2001 stipulates the pricing procedure for acquisition of land plots owned by state or cities. Can the provisions of said articles apply to the repurchase cost relative of land plots without any real estate objects thereupon?

To answer this question, it is also nec¬essary to refer to the available forensic practice.

Point 9 of Resolution of RF SAC Plenum «11 "On some issues related to application of the land legislation" from Mar. 24. 2005 elucidates that when fixing the land price in the purchase-sale agreement concluded in accordance with article 36 of the RF Land Code the parties are to be guided by Federal law "On Putting in Force the RF Land Code" stipulating certain imperatives regarding the specific terms of determining the land value.

Pursuant to article 2, par. 1 of Federal law "On Putting in Force the RF Land Code," when state-owned or city-owned land plots are sold to proprietors of buildings, struc¬tures and edifices located thereupon in keeping with the rules prescribed by article 36 of the RF Land Code, the value of such land plots is fixed in accordance with the procedure specified in par. 2 and 3 of the said article.

Therefore the presence of a building, structure or edifice on a land plot is an essential condition for applying the pricing procedure specified in par. 2 and 3 of article 2 of said law (Resolution of FAC Moscow Region relative to Case #KG-A4l/3044-08 and Case #A41-K2-10493/07 from Apr. 28, 2008). The said stance was supported by RF SAC relative to Case «6545/08 from June 30, 2008 (court ruling to waive the case transfer to Presidium of RF SAC).

Letter #D23-1462 of the RF Ministry for Economic Development from May 19, 2009 fully clarified the given issue as regards repurchase value of the land plot in per¬petuity use.

In line with Federal law 8137-FZ "On Putting in Force the RF Land Code" from Oct. 25, 2001 (henceforth referred to as "introductory law"), legal entities shall convert their right of permanent (perpet¬ual) use of land plots to the right of land leasehold or else formalize the ownership of land plots in keeping with the rules pre¬scribed in article 36 of the RF Land Code.

The repurchase price of land plots in the amount that does not exceed the land cadastral value applies directly to propri¬etors of buildings and structures located thereupon (par. 1, 1 and 1.2 of article 36 of the Land Code).

The repurchase price of other land plots in permanent (perpetual) use must be fixed on the basis of valuation materials (article 8 of Federal law #135-FZ "On Valuation Activity in the Russian Federation" from July 29,1998).

It can be concluded therefore that the title holders of land plots without real estate objects thereupon will have to buy them out at the market price.

Yet these are not all questions of con¬cern for land title holders. The extension of land rights re-registration was certainly good news for everyone. However the very procedure has not become faster. Moreover administrative barriers, red tape and inac¬tivity of competent authorities are still there. The times set in the legislation are not observed in the regions, which extends the re-registration procedure to 18 months or more.

Title holders have to confront the inac¬tivity of public officials and uphold their interests at law-enforcement and forensic bodies. Public officials continue astonish¬ing the lawful title holders by their inex¬haustible fantasy as they take all possible measures to increase the land repurchase value (for instance they promptly alter the category of land plots, apply to law-enforcement agencies requesting numerous checks relative to legality of assigning any particular category to a land plot etc.).

This undoubtedly drags on the process of re-registering of the right of permanent, perpetual land use. And many title holders do not hasten to apply for their title re-registration, since their "Russian mental¬ity" suggests to them (and not in vain, as can be judged from the practice) that the times of re-registration will be postponed many more times. 

About the Author

Tenzor Consulting Group is a legal company, which specializes on a legal consulting, gives a universal legal support to foreign and Russian companies in the territory of the Russian Federation and abroad.The primary directions of activity: legal support of land and  real estate projects, realization of investment projects, protection of interests of the client in courts of all instances, settlement of corporate disputes, solving of questions of state-private partnership, tax consulting etc.

How many Indians died defending their lands from European land thieves and invaders?

A professor of ethnic studies at the University of Colorado estimates that the population of North American Indians was reduced from about 12 million in 1500 to barely 237,000 in 1900, representing a vast genocide. (See link)

The Center of Holocaust & Genocide Studies includes a page on the Native Americans at their website. (See link)

I'm shocked and shamed by the anti-Indian sentiments in some of these answers. These people were slaughtered for their land. It's that simple.

Edit: Raymond - human hair ornaments? Do you mean scalps? Hmmm, who taught whom? Scalping was practiced in the 11th century by the Earl of Wessex. The custom, for the most part, came to the New World with the Europeans.

Joe McDonnell - Wolfe Tones