Friday, 27 January 2017

A landmark decision on real property

Few days ago The Supreme Court of Russia made a remarkable decision on real estate, concerning some issues of what is block of flats as an object and how the right on a plot of land beneath it depend on the right on a flat (Russian text is available here).
I should say that according to current Russian legislation the land parcel and anything built upon it are at least two distinct objects so the classical idea that a building is a part of the land doesn’t work in Russia. ‘At least’ means that as far as block of flats is concerned there are as many objects as flats in the block and two more namely the parcel and all the main elements of the construction (the foundation, the roof, the walls etc.) as another single thing. This weird approach results from the history of economic reforms of the 1990ths when the Soviet economy was rapidly transformed into free market. Trying to transfer maximum of state property to private owners, the government choose different schemes of privatization so in some cases they sold parcels of land, in some cases – buildings or their parts such as flats.
Although current concept of real property has its history and explanation it also lead to a number of problems and amid the main ones is that of right on land dependence on the right on the building or its part. The Supreme Court decision made several important interpretations of the law in question.
Although all real estate rights must be registered, an apartment buyer has an exception namely he or she are also transferred the right on a share of the parcel. This transfer takes place by law and nobody needs make any additional steps for in. This means that if a person acquires all the flats in the house, they become a solitary owner of the parcel without any further formalities. Moreover, the Court clearly stated that ‘block of flats’ is not an object; there can be either a house or number of flats and common property on all the main constructions.
The Court concluded that if the solitary owner of all the flats in the block demolishes the building he (or she) can build another block of flats transferring the right on land share to purchasers of the flat. 

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