Russia: Improvements to registration procedures of real estate

The Federal Law No. 218-FZ “On State Registration of Real Estate” and No. 122-FZ “On State Registration of Rights to Real Estate and Transactions therewith” which will take effect on 1 January 2017, introduces significant changes to the procedure for the state registration of real estate.

Currently, rights to real estate are registered in the Unified State Register of Real Estate Rights and Transactions, while technical data relating to real estate is registered in the State Real Estate Cadaster. Both registration systems will be combined in the new Unified State Real Estate Register, which will contain all relevant information on each property. This new State Real Estate Register will be managed by the Federal State Service for Registration (Rosreestr).

The registration procedures will become simpler. The main changes are as follows:

• The registration deadlines are reduced to 7 working days for the registration of rights of real estate and to 5 working days for registration of transactions involving real estate,
• The documents can be submitted for registration to any local authority of Rosreestr, irrespective of the location of the real estate,
• The cadastral registration and the registration of rights of newly established real estate can be arranged simultaneously,
• The foundation documents of a legal entity no longer have to be submitted to register its rights of real estate.

The Law also confirms that rights of real estate are evidenced only by an excerpt from the Unified State Real Estate Register, which was introduced in 1 July 2016. Thus ownership certificates will no longer be issued.

The new Law provides for detailed rules on the liability of Rosreestr for improper performance of its duties in relation to individuals. In particular, the Law envisages a list of grounds for liability of Rosreestr and a rule regarding its obligation to compensate for losses caused by its actions. In particular, with effect from 2020, the Law provides for one-off compensation of up to RUB 1 million for an individual’s loss of its sole residential real estate due to the fault of Rosreestr. There are no special rules for the compensation of damages suffered by legal persons. In this case, the general rules on compensation for unlawful actions by authorities apply.