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Paper eres2005_295:
Latest changes in Russian real estate law and its implications to European markets

id eres2005_295
authors Rebitzer, Dieter W. and Klaus W. Slapnicar
year 2005
title Latest changes in Russian real estate law and its implications to European markets
source Book of Abstracts: 2005 European Real Estate Society conference in association with the International Real Estate Society
summary Duma, the Russian parliament, achieved within three days (August 20th, December 29th and 30th 2005) with an enormous effort to constitute a modern real estate law for its country. The big number of 27 Acts represents a complete legislation, consisting matters of planning settlement and developing housing. The several Acts begin with a new Housing Code, coming in force January 1st 2005 for new contracts, while the laws of former housing legislation remains in force to July 1st 2007. Besides new regulations to legal affairs in the public sector of house-building the Housing Code includes a right of home ownership to an apartment, belonging to a legal community, sharing flat and running maintenance costs of housing. A second complete part is the new Town Planning Code. It deals with the development of territories, towns and housing areas under legal aspect of construction and use regulations. The Town Planning Code also includes competence of administrative agency which has to decide various plans, legal zonings and settlements. Another modification concerns the Civil Code of Russian Federation. This Act abolishes the necessity of documenting loan-contracts on behalf of real estates by mortgages. Furthermore parents are free to decide. Another general aim is, to reduce the costs of transaction and to simplify investments and acquisitions in housing market. Another target is the comprehensive protection of the right of ownership. To reduce risks and costs of transactions a new Act of Registration perfects the imperfect state system of documentation real properties, acquisition, purchase and other interests of land and mortgages by a register of title, an institution like the German Grundbuch (property/land register). The new rules allow also an acquisition of ownership in good faith. The former owner acquires a claim for compensation against the State, limited on 1 million Rubel. At the same time the Acts of mortgages are renewed. First target is to make emissions of loans and mortgages easier, second to simplify the conditions for mortgagor and mortgagee in getting securities on real property. Another new Act concerns the foundation of asset houses, dealing with credits and information about debts und securities, especially in the area of data processing. Another Act changes the rights of mortgagees to realise their securities and fix the legal circumstances in case of insolvency. In the Russian Civil Code the confidentiality in banking and the management of information is consequently adapted according to the new regulations of mortgages and her practical arrangements. A very actual Act creates a new legal person: the cooperative which saves and invests in housing and real estates. The consequences of new regulation in civil and real estate law are accomplished in changing fundamentally tax law by eight Acts. The costs for insinuation a mortgage are fixed between 200 at least to 3.000 Rubel at highest. The contract for sale of land will be no longer submitted the sales tax. Sales Profits will be taxed within a period restraint to December 31st 2006 with 9 %, later augmented on 15 %, in contrast of up to now 24 %. Many new regulations concern the taxation of natural persons to encourage them to spend money in the housing market. So income taxes will be fixed on 13% on profit. Another Act on property tax regulates two different taxes. One tax concerns the time of construction, the other when the construction is completed. A first evaluation of new Russian legislation to housing market shows a big legal step to more transparency in this field. It is an estimated step towards a continental European legal system concerning real estate law. There are quite few similarities between the Russian and the German state law. But on the other side Russia goes its own way. It depends on the cabinet of advisors, which legal design will win after the realisation passed the stony way of big transformation in a changing market. The strongly regulated market of socialism changed quickly to an open and liberal housing market. Because the Russian State gave up totally his Ownership, the inhabitants, received the socialist tower blocks free of charge, but they were without skills of management. This is a big opportunity for know-how-transfer. With a detailed comparison between Russian and the European real estate law we have the possibility to offer advice in all fields of housing law, its business management and financing. The new Russian Codes of Housing, Town Planning and Cooperatives are a huge step forward, but a second one must follow. Our legal and economical experiences are ready to be used. If there is a need, we can bring in our competence of our specialised universities in both Business Law and Real Estate Economics.
series ERES:conference
type normal paper
discussion No discussions. Post discussion ...
ratings
session Session G7
last changed 2008/11/01 09:47
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