16 May 2022

Commercial Land in Russia: Due Diligence Rules and Transaction Terms

May 16, 2022

BRACE Law Firm ©

Commercial land is a highly significant and high-value asset, the acquisition of which requires careful attention to the legal purity of the transaction. When purchasing a land plot, it is important to verify not only the seller's right to sell (or lease) such a land plot but also circumstances related to the technical characteristics of the plot and potential restrictions on its use. This means that verifying a transaction involving a land plot is not limited to checking information from the Unified State Register of Real Estate (the "USRN"), but includes a detailed legal analysis of various aspects.

This article examines the verification criteria for acquiring privately owned land plots, as well as the general conditions for acquiring land plots in state and municipal ownership.

General Transaction Terms Regarding Commercial Land

The acquisition of a commercial land plot is formalized by a purchase and sale agreement or another civil law contract. The grounds for acquiring a land plot or rights thereto may be an exchange agreement or a lease agreement (including with a buyout right). A contract is deemed concluded at the time of signing by the parties. The transfer of title is subject to registration. The legal regulation of acquiring land ownership is governed by Chapter 17 of the Civil Code of the Russian Federation (the "Civil Code"), as well as general rules for conducting purchase and sale transactions.

Since the acquisition of a high-value asset requires a detailed verification of the land plot, contractual structures for acquiring land plots are often built by initially concluding a preliminary contract (Article 429 of the Civil Code). Although a preliminary contract contains an obligation to conclude a primary contract in the future, using this type of contract allows for the verification of all necessary transaction elements before signing the primary contract. At the same time, a preliminary contract may contain conditions, the presence or absence of which would prevent the conclusion of the primary contract. A preliminary contract must be concluded in the same form as the primary contract.

Furthermore, the parties may choose a transaction structure where the primary contract is signed immediately but contains a condition precedent for the transfer of title to the land plot. This condition may depend on the receipt of payment or, for example, the receipt of a specific document with relevant information (such as receiving an Urban Planning Plan of the Land Plot (the "GPZU"), which indicates the absence of certain restrictions on use).

Persons owning a land plot may sell, gift, pledge, or lease it, and otherwise dispose of it to the extent that the respective lands are not excluded from circulation or restricted in circulation based on the law.

Pursuant to Article 263 of the Civil Code, a landowner may erect buildings and structures on it, provided they comply with urban planning and construction norms and rules, as well as requirements regarding the land plot's designated purpose. Consequently, a landowner has the right to protect their rights not only to the land plot but also to any building erected on it, which essentially constitutes an integral part of the land plot they own.

The general conditions for conducting a land plot purchase and sale transaction involve concluding a purchase and sale agreement in which the real estate object must be agreed upon. The subject matter is an essential term and is deemed agreed upon when the description of the transaction subject allows for the identification of the object. Generally, for land plots, it is sufficient to specify the cadastral number. However, to avoid disputes, it is advisable to specify all characteristics and parameters of the land plot, including its area, location, and other data.

In accordance with Article 555 of the Civil Code, the price in a land plot purchase and sale agreement is also an essential term. This means that if the price is not agreed upon, the land plot purchase and sale agreement will be deemed not concluded. At the same time, the price may be expressed not only by determining it in a fixed amount but also by establishing the procedure for its determination, for example, by indicating the costs accepted as the buyout price. The only condition for the price to be considered agreed upon in this case is a determination that excludes double interpretation. [1]

Rules for Acquiring Land Plots in State and Municipal Ownership

The provision of land plots from municipal ownership for construction purposes is carried out only through the results of auctions. Such plots are provided under lease. Providing a land plot for lease without an auction is possible only in strictly defined cases, for example, to complete an unfinished construction project located on the plot.

Land plots are provided into ownership without an auction to the owners of buildings, structures, or premises located on such land plots. Citizens and legal entities who own buildings and structures located on such land plots have an exclusive right to acquire land plots into ownership or lease.

The granting of an exclusive right to owners of buildings and structures to acquire the land plot occupied by these objects is aimed at implementing the principle of the unity of destiny of land plots and objects permanently attached thereto, as established in Article 1 of the Land Code of the Russian Federation (the "Land Code"). The exclusivity of the right to acquire a land plot means that no one except the owner of the real estate object may acquire (into ownership or lease) the corresponding land plot.

Thus, land legislation provides for the conclusion of a lease or purchase and sale agreement for a land plot in state or municipal ownership without conducting an auction if it is provided to the owner of buildings or structures located on it. A specific feature of this method of land provision is that the rights of citizens and legal entities who own buildings and structures located on public land plots to acquire these plots under lease are exclusive.

When providing a land plot under real estate objects, the size of the provided (bought out) plot is of great importance. Requirements for formed land plots are established in Article 11.9 of the Land Code. Thus, the requested land plot must be formed for the purpose of operating the real estate object belonging to the applicant located on this plot, in the amount necessary for such operation. [2]

At the same time, the mere fact of registering a land plot in the cadastral records, as well as the preceding approval of the plot's location layout, cannot serve as evidence of the land size necessary for the operation of the real estate object. The owner of real estate objects requesting the provision of a land plot must submit evidence confirming the necessity of using a land plot of the requested area for the operation of the real estate objects, including for the stated purposes.

Maximum dimensions for the area of the part of the land plot occupied by a building, structure, or construction and necessary for their use are determined based on the land allotment norms approved in the established manner for specific types of activities, or land use and development rules, land management, urban planning, and design documentation.

A real estate owner requesting the provision of the land plot under the object into ownership must submit evidence confirming the necessity of using a land plot of the requested area for the operation of the acquired real estate objects, including for the stated purposes. [3]

In this regard, the burden of proving the necessary size of the land plot to be bought out rests with the person wishing to buy it out. [4] The provision of a land plot occupied by a real estate object must be carried out such that the owner of this object has the opportunity to perform its maintenance and operation; that is, the boundaries of the transferred land plot must include both the part occupied by the real estate and the part necessary for its use. The provision of a public land plot for the operation of a real estate object with an area exceeding that necessary for the stated purposes is not permitted.

The area of the land plot to be provided must be determined based on its functional use exclusively for the operation of the objects located on it and must be proportionate to the area of the real estate objects. [5]

Thus, when applying to the authorized body for the exercise of the exclusive right to acquire a land plot on the grounds that buildings belonging to the applicant are located on it, the applicant must justify the requested land area. At the same time, the formation and cadastral registration of a land plot are not absolute grounds for providing it to the applicant in the size they requested.

A land plot may be provided for lease without an auction for the completion of an unfinished construction project, provided that the lease agreement for completing the construction of the unfinished project has not been previously extended and such object was erected on legal grounds. Other cases are listed in Article 39.6 of the Land Code.

The provision of a land plot (into ownership or lease) in state or municipal ownership through auctions is regulated by Article 39.3 of the Land Code. The procedure for acquiring a land plot at an auction is strictly regulated.

What Must Be Checked When Acquiring Rights to a Land Plot?

When acquiring a non-public land plot, it is important to verify an extensive list of circumstances. Such circumstances concern both the seller's rights and the presence/absence of restrictions, as well as information directly related to the characteristics of the land plot. It is recommended to verify the seller's rights not only through the existence of a corresponding entry in the USRN but also, if possible, to verify the grounds for the origin of the rights (title documents), especially if the rights to the land plot arose as a result of several transactions conducted within 3 (three) years before the transaction date.

Verification of the Seller and Their Rights to the Land Plot

1. Presence of rights held by the seller of the land plot.

First and foremost, it is necessary to verify the fact that the rights belong to the seller (or lessor).
In this case, it is necessary to request a USRN extract, which will specify the owner of the land plot.
Additionally, from the USRN extract, one can learn about the presence of restrictions (encumbrances) or an established pledge on the land plot, which would be an obstacle to the transaction.
Also, by requesting an "extended" USRN extract, it is possible to obtain information about legal claims regarding the land plot.

2. Presence of restrictions on the authority to conduct the transaction.

In this case, when conducting a transaction on behalf of a legal entity, it will be necessary to check whether such a transaction is a major transaction for the company and request the corresponding approvals.
When a transaction is conducted by a natural person, it is necessary to check for the presence of the spouse's consent to the transaction.

3. Presence of joint or common ownership.

From the USRN, one can find out whether the seller in the transaction is the sole owner.
If the plot is in joint or common ownership, the transaction must be conducted by all owners pursuant to Article 252 of the Civil Code.

4. Assessment of the seller's legal capacity and risks related to bankruptcy procedures.

In addition to the party to the transaction having the right to conduct such a transaction, it is necessary to secure such a transaction against future challenges, for example, due to the seller's bankruptcy.
Given the requirements of bankruptcy legislation, transactions conducted during the period of suspicion may be challenged within the framework of the debtor's bankruptcy case.
The existence of a bankruptcy petition against the seller of a land plot (regardless of whether the seller is a legal entity or a natural person) can be checked using the Card Index of Arbitration Cases.
It is recommended to check not only the current owner of the land plot but also previous owners if less than 3 years have passed since the transactions were conducted.
Regarding a legal entity, one can also check for publications of a creditor's upcoming intention to file a corresponding bankruptcy petition, which is published on the website of the Unified Federal Register of Bankruptcy Information (the "EFRSB").

Conditions Related to Restrictions on the Use of the Land Plot

Since commercial land is used for the construction of objects, it is extremely important to understand the presence of any restrictions when using the land plot.

1. Verification of the permitted use category.

Permitted use categories for land plots and capital construction objects are types of activities and objects that are allowed to be carried out and placed on land plots by virtue of being named in the urban planning regulations applicable to the respective territorial zones, provided there is mandatory compliance with the requirements of other regulatory legal acts and regulatory-technical documents.
Permitted use categories for land plots and capital construction objects include primary permitted use categories, conditionally permitted use categories, and auxiliary permitted use categories.
All permitted use categories (the "VRI") are established by the Classifier of Permitted Use Categories for Land Plots.[6]
The division of lands by designated purpose into categories, according to which the legal regime of lands is established based on their belonging to a certain category and permitted use in accordance with territorial zoning and legislative requirements, is one of the fundamental principles of land legislation.
Owners and other holders of land plots are obliged to use them in accordance with their designated purpose and belonging to a particular land category and permitted use.
In the Russian Federation, lands are subdivided by designated purpose into the following land categories:
agricultural land;
settlement land;
land for industry, energy, transport, communications, radio broadcasting, television, informatics, land for space activities, land for defense, security, and land for other special purposes;
land for specially protected territories and objects;
forest fund land;
water fund land;
reserve land.
Territorial urban planning zoning is regulated by the Urban Planning Code of the Russian Federation (the "GrdK RF"); Section 7 of Article 1 of the GrdK RF contains the concept of territorial zones, i.e., zones for which boundaries are defined and urban planning regulations are established in the land use and development rules.
Boundaries of territorial zones are established on the urban planning zoning map, and the permitted use categories for land plots and capital construction objects are specified in the urban planning regulations.
The urban planning zoning map and urban planning regulations are part of the land use and development rules.
The land use and development rules (the "PZZ"), among other things, include provisions on changing the permitted use categories for land plots and capital construction objects by natural persons and legal entities.
The procedure for establishing territorial zones, their types, and composition is regulated by Articles 34 and 35 of the GrdK RF.
Regarding each territorial zone, permitted use categories for land plots and capital construction objects are established.
Permitted use may be of the following types:

primary permitted use categories;
conditionally permitted use categories;
auxiliary permitted use categories, which are permissible only as additional to the primary and conditionally permitted use categories and are carried out jointly with them.
- Primary and auxiliary permitted use categories for land plots and capital construction objects are selected independently by the right holders of land plots and capital construction objects, except for state authorities, local government bodies, state and municipal institutions, and state and municipal unitary enterprises, without additional permits and approvals (Article 37 of the GrdK RF).
- Permission for a conditionally permitted use is granted in the manner established by Article 39 of the GrdK RF.
- The permitted use of land plots established before the date of approval of the Classifier of Permitted Use Categories for Land Plots is recognized as valid regardless of its compliance with the specified Classifier.[7]
- At the same time, the landowner's ability to choose the VRI depends on whether the land plot is privately owned or provided under lease by a municipality.
- If land use and development rules have been approved in the established manner, the owner of a privately owned land plot may choose the primary and auxiliary permitted use categories for the land plot independently, without additional permits and approvals from local government bodies.[8]
- In contrast, the lessee of a land plot in state or municipal ownership is not entitled to demand a change in the permitted use category of such a plot or the introduction of corresponding changes to a lease agreement concluded based on the results of an auction.
- Thus, when acquiring a land plot (or assigning lease rights), the buyer must check the VRI of the land plot and determine the possibilities for changing it or selecting a VRI in accordance with the Classifier of Permitted Use Categories for Land Plots.

2. Verification of the compliance of Land Use and Development Rules with the Master Plan.

In accordance with the GrdK RF, the principle of the primacy of the master plan over the land use and development rules is established, as it is the fundamental territorial planning document defining the strategy for urban development of territories and containing long-term guidelines for their development.
The non-compliance of the land use and development rules of a municipality with the master plan is grounds for considering the issue of bringing them into compliance with the specified territorial planning document. [9]
The master plan, by defining the purpose of territories based on the development plans for the city as a whole, may not correspond to its actual use, allowing for a potential change in the territory's purpose, since master plans define the strategy for its development and the conditions for forming the living environment.
Thus, when acquiring a land plot (or lease rights), it is necessary to establish the compliance of the PZZ with the master plan norms, as otherwise, it may be necessary to bring the PZZ into compliance with the master plan.
Non-compliance of the PZZ with the master plan may lead to the inability to use the plot in accordance with the VRI.

3. Presence of a valid Urban Planning Plan of the Land Plot.

By virtue of Article 57.3 of the GrdK RF, the Urban Planning Plan of the Land Plot (the "GPZU") is issued to provide subjects of urban planning activity with the information necessary for architectural and construction design, construction, and reconstruction of capital construction objects within the boundaries of the land plot.
The sources of information for the preparation of the GPZU are territorial planning and urban planning zoning documents, urban planning design standards, territory planning documentation, information contained in the USRN, the federal state information system of territorial planning, the information system for supporting urban planning activities, as well as technical conditions for the connection (technological connection) of capital construction objects to engineering and technical support networks.
The preparation and issuance of the GPZU are carried out upon the application of the owner, user, or other interested person and is the obligation of the authorized body, not contingent on the need to justify the purpose of requesting the urban planning plan or a requirement for the applicant to provide any documents, except those related to the possibility of identifying the applicant.
Currently, the information contained in the GPZU can be used for the preparation of design documentation for construction for 3 (three) years.
The urban planning plan is exclusively informational for the purpose of determining the possibilities and requirements for developing a land plot and is a document containing information (messages, data) about a specific land plot that allows for the identification of this land plot and the determination of its location relative to other land plots, capital construction objects, real estate, etc., as well as information necessary for the preparation of design documentation for capital construction objects and their parts being built or reconstructed within the boundaries of the land plot, and does not establish any rights or restrictions regarding the real estate object or land plot.
Part 13 of Article 51 of the GrdK RF provides for grounds for refusing to issue a construction permit.
Specifically, the body authorized to issue construction permits refuses to issue a construction permit if documents are missing, or if the submitted documents do not comply with the requirements for the construction or reconstruction of a capital construction object established on the date of issuance of the GPZU submitted for obtaining the construction permit, or in the case of issuing a construction permit for a linear object, if they do not comply with the requirements of the territory planning project and the territory surveying project, as well as the permitted use of the land plot and (or) restrictions established in accordance with the land and other legislation of the Russian Federation and in force on the date of issuance of the construction permit, or the requirements established in the permit for deviation from the limit parameters of permitted construction or reconstruction.
Furthermore, when considering applications for the issuance of construction permits, authorized bodies are obliged not only to formally check the presence of documents submitted by the applicant but also to verify the compliance of the design documentation with the requirements for construction established on the date of issuance of the GPZU submitted for obtaining the construction permit, as well as to determine whether the placement of the capital construction object is permissible in accordance with the permitted use of the land plot and restrictions established in accordance with the land and other legislation of the Russian Federation. [10]
Thus, non-compliance of the parameters of the planned construction object with the requirements of the GPZU will be grounds for refusing to issue a construction permit.

4. Possibility of technological connection to communal infrastructure.

Since land plots are used for construction, the possibility of connecting to communal networks (electrical, heating networks, etc.) is of great importance for carrying out such activity.
Communal infrastructure system means a complex of objects and engineering structures technologically interconnected and designed to provide goods and services in the areas of electricity, gas, heat, and water supply and wastewater disposal to the points of connection (technological connection) of capital construction objects to the engineering systems of electricity, gas, heat, and water supply and wastewater disposal, as well as objects used for the treatment, utilization, neutralization, and disposal of solid municipal waste.
In accordance with Article 52 of the GrdK RF, the connection (technological connection) of capital construction objects to electricity, gas, heat, and water supply and wastewater disposal networks and communications networks, and the determination of the fee for such connection (technological connection), are carried out in accordance with the legislation of the Russian Federation on electric power, heat supply, gas supply, water supply and wastewater disposal, and communications.
Technical conditions for the connection (technological connection) of capital construction objects to engineering and technical support networks used for architectural and construction design purposes are determined in accordance with the rules for connection (technological connection) to engineering and technical support networks of the respective type, as approved by the Government of the Russian Federation,[11] and are mandatory appendices to contracts for the connection (technological connection) of capital construction objects to engineering and technical support networks of the respective type.
In accordance with Clause 4 of Article 52.1 of the GrdK RF, the period of validity for technical conditions is established by the right holder of the engineering and technical support network for at least 3 (three) years or, in the case of comprehensive territory development, for at least 5 (five) years.
The absence of technical conditions for connection to communal support systems not only reduces the value of the land plot but also significantly complicates the possibilities for implementing construction on such a plot.
Depending on the connection conditions, the cost of constructing an object may be significantly increased due to the high cost of such connection.

Additional Circumstances Subject to Verification

In addition to the circumstances mentioned above that are subject to verification, when acquiring a land plot, one must check less obvious parameters.

1. Protective zones and sanitary protection zones.

Protective zone means a part of a protected object equipped with technical means of protection and for which a separate protection regime is established.[12]
Sanitary protection zone (SZZ) means a special territory with a special usage regime, the size of which ensures a reduction in the impact of pollution on the atmospheric air (chemical, biological, physical) to values established by hygienic standards.
By virtue of its functional purpose, a sanitary protection zone is a barrier ensuring the safety level of the population during the operation of an object in normal mode.
The procedure for establishing and the legal regulation of protective zones are governed by special legislation depending on the sphere in which the protective zone is established.
Certain restrictions on carrying out activities are established in these zones.
For example, regarding the protective zones of high-voltage lines, Government Decree No. 160 dated February 24, 2009, applies. [13]
Depending on the line's parameters, protective zones of various sizes are established.
Restrictions on management in such zones also depend on the parameters of the high-voltage line.
For example, in protective zones established for electric grid facilities with a voltage over 1,000 volts, it is prohibited to:

a) store or place storage facilities for any materials, including fuel and lubricants;

b) place playgrounds and sports fields, stadiums, markets, retail outlets, field camps, livestock pens, garages, and parking lots for all types of machinery and mechanisms, or conduct any events involving a large gathering of people not engaged in performing works permitted in the established manner (in the protective zones of overhead power lines);

c) use (launch) any aircraft, including kites or sports models of aircraft (in the protective zones of overhead power lines);

d) cast anchors from vessels and pass with cast anchors, chains, plummets, drags, and trawls (in the protective zones of underwater cable power lines);

e) pass vessels with raised crane booms and other mechanisms (in the protective zones of overhead power lines).

In accordance with Article 105 of the Land Code, it is provided that the following types of zones with special territory usage conditions may be established: the protective zone of electric power facilities (electric grid facilities and electric power production facilities).
The Government of the Russian Federation approves a regulation regarding each type of zone with special territory usage conditions, except for zones with special territory usage conditions that arise by virtue of federal law (water protection (fish protection) zones, coastal protective strips, and protective zones of cultural heritage objects).
The Rules for Establishing Protective Zones for Electric Grid Facilities and Special Conditions for Using Land Plots Located within the Boundaries of Such Zones were approved by Government Decree No. 160 dated February 24, 2009.
Pursuant to Clause 8 thereof, it is prohibited in protective zones to perform any actions that could disrupt the safe operation of electric grid facilities, including those that could lead to their damage or destruction, and (or) cause harm to the life, health of citizens, and property of natural persons or legal entities, as well as cause environmental damage and fires.
This includes: placing any objects and items (materials) within the passages and access ways created in accordance with the requirements of regulatory-technical documents for access to electric grid facilities, as well as performing any work and erecting structures that may impede access to electric grid facilities, without creating the passages and access ways necessary for such access.
Within protective zones, without a written decision on approval from the grid organizations, legal entities and natural persons are prohibited from: construction, major repairs, reconstruction, or demolition of buildings and structures.
Sanitary protection zones are established regarding existing objects, objects planned for construction, or reconstructed capital construction objects that are sources of chemical, physical, or biological impact on the human habitat, if chemical, physical, and (or) biological impacts exceeding sanitary and epidemiological requirements are formed outside the boundaries of the objects.
Within the boundaries of a sanitary protection zone, the use of land plots for the following purposes is not permitted:

a) placement of residential development, educational and medical facilities, open-type sports facilities, organizations for children's recreation and health improvement, recreational zones, and for gardening;

b) placement of facilities for the production and storage of medicinal products, facilities of the food industries, wholesale warehouses for food raw materials and food products, complexes of water supply structures for the preparation and storage of drinking water, and the use of land plots for the production, storage, and processing of agricultural products intended for further use as food products, if the chemical, physical, and (or) biological impact of the object for which the sanitary protection zone is established leads to a violation of the quality and safety of such products, raw materials, water, and products in accordance with the requirements established for them. [14]

The absence of information about protective zones or SZZs in the USRN is not grounds for the owner to be able to use the land plot without restrictions.
In one specific case, a court found that according to Article 57.3 of the GrdK RF, the GPZU contains information, including about the presence or absence of cultural heritage objects within the boundaries of the land plot and the boundaries of the territories of such objects. [15]
After the approval of the GPZU form, information must be provided regarding the permitted use of the land plot, requirements for the purpose, parameters, and placement of a capital construction object on the specified land plot.
The form of the GPZU and the procedure for filling it out were approved by Order No. 741/pr dated April 25, 2017.
Pursuant to Clause 73 of Order No. 741/pr, Section 5, "Information on restrictions on the use of the land plot, including if the land plot is fully or partially located within the boundaries of zones with special territory usage conditions", contains information on restrictions on the use of a land plot located, even partially, within the boundaries of zones with special territory usage conditions provided for by the current legislation of the Russian Federation for the objects in respect of which such zones are established.
In a specific case, during the examination of the factual circumstances, the court found that the land plot on which the construction of a capital construction object was planned is entirely within the boundaries of the protective zone of a cultural heritage object; the boundaries of the protective zone of the regional cultural heritage object "Annunciation Monastery" (Monastyr Blagoveshchenskiy) are 100 meters from the external boundaries of the monument's territory.
In Sections 1 and 5 of the GPZU, the interested person correctly indicated the existence of a restriction on the use of the land plot — the land plot is located in the protective zone of cultural heritage objects; the plan reflects the boundaries of the territory of the cultural heritage object and the boundaries of the protective zone of the cultural heritage object Annunciation Monastery.
Also, the court reasonably noted that the absence of information in the Unified State Register of Real Estate regarding the location of the land plot within the boundaries of the protective zone of a cultural heritage object does not affect the fact of the existence of the protective zone of the cultural heritage object in the specified boundaries, which entails the use of this land plot territory subject to the restrictions established by legislation.
Thus, the information contained in the GPZU is extremely important for establishing the presence or absence of restrictions on the use of a land plot.
This means that when acquiring a land plot, an analysis of the USRN extract alone will be insufficient.
In this case, it is mandatory to study the GPZU, and in the absence of a valid GPZU, to obtain one.

Analysis of the Risk of Land Plot Expropriation for State or Municipal Needs

Preparing to acquire a land plot requires checking whether the plot is included in lands subject to expropriation for state needs. In accordance with Subparagraph 2 of Article 49 of the Land Code, the expropriation of land plots for state or municipal needs is carried out in exceptional cases on grounds related, among other things, to the construction or reconstruction of objects such as federal, regional, inter-municipal, or local roads.

By virtue of Article 281 of the Civil Code, the compulsory expropriation of a land plot for state or municipal needs is permissible provided that prior and equivalent compensation is provided. When determining the amount of such compensation, it includes the market value of the land plot, the ownership of which is subject to termination, or the market value of other rights to the land plot subject to termination, and losses caused by the expropriation of such a land plot.

Since April 1, 2015, an obligation has been established not only to notify the right holder of the land plot of the state body's decision on its expropriation (Clause 5 of Article 279 of the Civil Code, Article 56.6 of the Land Code), but also to send them a draft agreement on the expropriation of real estate with the attachment of cadastral passports, a report on the assessment of the market value of the expropriated land plots and (or) the real estate objects located on them, and in cases established by law, a report on the assessment of the value of real estate objects provided in exchange for the expropriated ones.

If the right holder does not conclude the expropriation agreement, a lawsuit for compulsory expropriation of the land plot for state or municipal needs cannot be filed earlier than 90 (ninety) days from the date the land plot right holder receives the expropriation agreement.

Article 282 of the Civil Code (in the version in force until April 1, 2015) established a 3-year period for filing a lawsuit for the buyout of a land plot for state or municipal needs, calculated from the moment the owner was sent notification of the upcoming land plot expropriation. The version of the Civil Code article in force since April 1, 2015, establishes that a lawsuit for compulsory expropriation of a land plot for state or municipal needs may be filed during the period of validity of the decision on the land plot expropriation for the specified needs, which is 3 (three) years from the moment of its adoption. The expiration of this period is grounds for dismissing the lawsuit.

The decision to expropriate land plots is published in official sources, and, moreover, the corresponding regulatory act is in the public domain, which also does not prevent the discovery of information if a corresponding decision on expropriation has been made regarding the subject of the transaction.

Thus, preparing for a transaction to acquire a plot (or lease rights) requires thoroughly analyzing a vast amount of information. Possessing sufficient information will allow for an assessment of risks as well as their minimization. Furthermore, the presence of certain information can be used to adjust the value of the land plot.

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References

Resolution of the Arbitration Court of the North-Western District dated January 31, 2022, No. F07-16317/2021 in Case No. A26-759/2021.
Clause 13 of the Resolution of the Plenum of the Supreme Arbitration Court of the Russian Federation dated March 24, 2005, No. 11, On Certain Issues Related to the Application of Land Legislation.
Resolution of the Presidium of the Supreme Arbitration Court of the Russian Federation dated March 1, 2011, No. 13535/10.
Resolution of the Presidium of the Supreme Arbitration Court of the Russian Federation dated March 1, 2011, No. 13535/10.
Ruling of the Supreme Court of the Russian Federation dated December 24, 2015, No. 309-ES15-11394.
Rosreestr Order No. P/0412 dated November 10, 2020, On Approval of the Classifier of Permitted Use Categories for Land Plots.
Review of the Practice of Courts Considering Cases Related to Changing the Permitted Use Category of a Land Plot (approved by the Presidium of the Supreme Court of the Russian Federation on November 14, 2018).
Clause 1 of the Review of the Practice of Courts Considering Cases Related to Changing the Permitted Use Category of a Land Plot (approved by the Presidium of the Supreme Court of the Russian Federation on November 14, 2018).
Ruling of the Supreme Court of the Russian Federation dated April 6, 2017, No. 32-APG-17-1.
Resolution of the Arbitration Court of the Volga-Vyatka District dated June 9, 2020, No. F01-10920/2020 in Case No. A29-10969/2019.
Government Decree No. 861 dated December 27, 2004, On Approval of the Rules for Non-Discriminatory Access to Electric Power Transmission Services and Provision of These Services, Rules for Non-Discriminatory Access to Operational and Dispatch Management Services in the Electric Power Industry and Provision of These Services, Rules for Non-Discriminatory Access to the Services of the Administrator of the Trading System of the Wholesale Market and Provision of These Services, and Rules for the Technological Connection of Energy-Receiving Devices of Electric Power Consumers, Electric Power Production Facilities, as well as Electric Grid Facilities Belonging to Grid Organizations and Other Persons, to Electric Grids; Government Decree No. 2130 dated November 30, 2021, On Approval of the Rules for Connection (Technological Connection) of Capital Construction Objects to Centralized Systems of Hot Water Supply, Cold Water Supply, and (or) Wastewater Disposal, on Amending Certain Acts of the Government of the Russian Federation and Recognizing Certain Acts of the Government of the Russian Federation and Provisions of Certain Acts of the Government of the Russian Federation as Void; Government Decree No. 787 dated July 5, 2018, On Connection (Technological Connection) to Heat Supply Systems, Non-Discriminatory Access to Services in the Heat Supply Sphere, Amending and Recognizing Certain Acts of the Government of the Russian Federation as Void; Government Decree No. 1547 dated September 13, 2021, On Approval of the Rules for Connection (Technological Connection) of Gas-Using Equipment and Capital Construction Objects to Gas Distribution Networks and on Recognizing Certain Acts of the Government of the Russian Federation as Void.
GOST R 52551-2016. National Standard of the Russian Federation. Security and Safety Systems. Terms and Definitions (approved and put into effect by the Rosstandart Order No. 1743-st dated November 22, 2016).
Government Decree No. 160 dated February 24, 2009, On the Procedure for Establishing Protective Zones for Electric Grid Facilities and Special Conditions for Using Land Plots Located within the Boundaries of Such Zones (together with the Rules for Establishing Protective Zones for Electric Grid Facilities and Special Conditions for Using Land Plots Located within the Boundaries of Such Zones).
Clause 5 of the Government Decree No. 222 dated March 3, 2018, On Approval of the Rules for Establishing Sanitary Protection Zones and Using Land Plots Located within the Boundaries of Sanitary Protection Zones.
Resolution of the Arbitration Court of the Urals District dated July 25, 2019, No. F09-4123/19 in Case No. A07-31058/2018.