Land Transactions in Russia: A Comprehensive Legal Guide

 

June 29, 2022.

BRACE Law Firm ©

 

Land transactions are a common type of transaction performed for both business and non-commercial/personal purposes. It is possible to distinguish land transactions for personal use, generally for private subsidiary farming or individual construction, as well as commercial transactions. A common feature for all types of land transactions is the need to agree on the subject matter of the transaction, specifically the data that allows the land plot to be identified.

This article primarily examines the legal aspects of commercial land transactions.

Form of Land Transactions

Land transactions follow the general rule that such transactions are performed in writing, and the transfer (accrual of rights or restrictions) is subject to state registration. When performing transactions involving a land plot, it is mandatory to define the subject matter of the contract.

Typically, transactions are performed in the form of a single document signed by the parties. The transfer of rights to a plot or the creation of encumbrances is subject to registration in the Unified State Register of Real Estate (the "USRN").

The subject matter of the contract is considered agreed upon when the land plot can be identified. In addition to the cadastral number, it is advisable to specify the area, location, category of the land plot, and its permitted use.

At the request of the parties, transactions may be notarized. On one hand, this is an additional guarantee for the parties. However, given the requirement for state registration of rights or encumbrances, the risks of a simple written form exist only until such registration is performed. On the other hand, a transaction before a notary is always associated with the additional requirements of such a person, which certainly has its own specifics during the additional verification of documents.

It is worth noting that when concluding preliminary contracts regarding land plots, such contracts will be concluded in the same form as the main contract — namely, in simple written form. At the same time, since registration is not a form of the contract, the preliminary contract will not be subject to state registration.

Transactions Related to the Transfer of Title to a Land Plot

Transactions whose subject matter is the transfer of title to a land plot are performed in simple written form. Title transfers from the moment of state registration of such transfer. Performance of the transaction consists of the delivery of the land plot by the seller and the payment of funds by the buyer. Generally, the delivery of a land plot is certified by the signing of a transfer and acceptance act.

Land Purchase and Sale

When considering a land plot purchase and sale transaction (the "Land Plot"), it is worth distinguishing between transactions involving Land Plots in private ownership and those in the ownership of municipalities, constituent entities of the Russian Federation, or the Russian Federation.

Transactions Involving Land in Private Ownership

The general conditions for the disposal of land are specified in Article 260 of the Civil Code of the Russian Federation (the "Civil Code"), according to which persons who own a land plot are entitled to sell, gift, mortgage, or lease it and dispose of it in any other manner to the extent that the relevant lands are not excluded from circulation or restricted in circulation based on the law.

Lands for agricultural and other special purposes, the use of which for other purposes is not permitted or is restricted, are determined based on the law and in the manner established therein. The use of a land plot classified as such lands may be performed within the limits determined by its special-purpose designation.

General requirements for a land plot purchase and sale contract are specified in Article 550 of the Civil Code. A real estate sale contract is concluded in writing by drawing up a single document signed by the parties. Failure to comply with the form of a real estate sale contract entails its invalidity.

By virtue of the requirements of Article 54 of Federal Law No. 218-FZ dated July 13, 2015, On the State Registration of Real Estate (the "State Registration Law"), transactions for the alienation of a land plot belonging to a minor citizen or a citizen recognized by a court as having limited legal capacity are subject to mandatory notarization. Transactions for the alienation or mortgage contracts for shares in the right of common ownership of real estate during the alienation of real estate are also subject to mandatory notarization. Exceptions include:

• transactions during the alienation or mortgage by all participants of shared ownership of their shares under a single transaction;
• transactions related to property constituting a mutual investment fund or acquired for inclusion in a mutual investment fund;
• transactions for the alienation of land shares;
• mortgage contracts for shares in the right of common ownership of real estate concluded with credit organizations (Article 42 of the State Registration Law);
• transactions for the alienation of land plots belonging to a minor citizen or a citizen recognized as having limited legal capacity (Article 54 of the State Registration Law).

At the request of the parties, a land plot purchase and sale contract may be notarized in other cases as well.

The transfer of title to a land plot is subject to state registration.

In cases where the seller is the owner of the land plot on which the sold real estate is located, the title to the land plot occupied by such real estate and necessary for its use is transferred to the buyer, unless otherwise provided by law.

If the contract does not determine the right to the relevant land plot transferred to the buyer of the real estate, the title to that part of the land plot that is occupied by the real estate and is necessary for its use transfers to the buyer. [1]

When selling a real estate object (a building), the part of the land plot necessary for the operation and maintenance of the real estate object located on it also transfers to the buyer, regarding the recognition of the plaintiff's title to the formed plot.

Even if the purchase and sale contract for the object does not specify anything about the land plot, the right to such Land Plot (or part of the Land Plot) will transfer automatically, as the current legislation establishes the principle of the unity of fate of land plots and objects permanently attached to them. [2]

Essential conditions of a land plot purchase and sale contract include:

1. The subject matter, including the object of the contract, meaning the obligation to perform the sale of the land plot and data allowing the land plot to be identified. To identify the land plot, it is generally sufficient to specify the cadastral number. However, in addition, one should specify the area of the land plot, its address, and other information and characteristics of the land plot.

2. The price of the land plot. A real estate sale contract must provide for the price of the land plot. In the absence of a condition on the real estate price agreed upon by the parties in writing in the sale contract, the contract is considered not concluded. In this case, the rules for price determination provided for in Paragraph 3 of Article 424 of the Civil Code do not apply. Transactions for the alienation of land plots are not subject to VAT.

In the event of the provision of a land plot that does not comply with the terms of the contract, the buyer is entitled to demand a proportionate reduction in the price. This requirement applies to both private and public land plots.

According to Paragraph 1 of Article 475 of the Civil Code, if the defects of the goods were not disclosed by the seller, a buyer to whom goods of inadequate quality were delivered is entitled to demand a proportionate reduction in the purchase price from the seller. A similar rule is relevant for public land. In accordance with Paragraph 3 of Article 37 of the Land Code, a buyer, in the event that the seller provides him with knowingly false information about encumbrances on the land plot and restrictions on its use in accordance with its permitted use, about the permission to build on this land plot, about the use of neighboring land plots that has a significant impact on the use and value of the sold land plot, about the qualitative properties of the land that may affect the buyer's planned use and the value of the sold land plot; other information that may influence the buyer's decision to purchase this land plot and the requirements for the provision of which are established by federal laws, is entitled to demand a reduction in the purchase price.

Thus, the law links the buyer's right to a reduction in the price of the goods to the presence of defects that were not disclosed by the seller (Paragraph 1 of Article 475 of the Civil Code) and to the fact of the seller's provision of false information about the land plot (Paragraph 3 of Article 37 of the Land Code). At the same time, in order to reduce such cost, the buyer must prove that at the time of the land plot acquisition, he did not know about such restrictions.

In a specific case, it was established that from the content of the contract, it follows that the buyer was aware of the land plot's lack of direct access to public lands and the associated need to establish easements regarding neighboring land plots. That is, information about the properties of the land plot was not hidden from the buyer, and he knew about its defects with which the buyer links the need for a price reduction. Under such circumstances, in the opinion of the arbitration court, the conditions established by law for applying such a method of protecting the buyer's interests as a reduction in the land plot price are absent. If, when acquiring the Land Plot, the buyer knew about the presence of such defects, the rule on proportionate price reduction does not apply. [3]

Transactions Involving Land in Municipal or State Ownership

As a general rule, the buyout of a land plot is performed at auctions. The sale of a Land Plot without auctions is performed in cases provided for in Paragraph 2 of Article 39.3 of the Land Code. An order of Rosreestr approved the list of documents confirming the right to acquire a Land Plot into ownership without auctions. [4] The most common case is the acquisition of land under a real estate object belonging to the owner.

From March 1, 2015, the provision of a land plot into ownership for a fee to the owner of a real estate object located on it without conducting auctions is performed in the manner provided for by Subparagraph 6 of Paragraph 2 of Article 39.3 and Paragraph 1 of Article 39.20 of the Land Code.

In accordance with Subparagraph 6 of Paragraph 2 of Article 39.3 of the Land Code, the sale of land plots on which buildings and structures are located is performed without conducting auctions to the owners of such buildings, structures, or premises in them in cases provided for in Article 39.20 of the Land Code.

Paragraph 1 of Article 39.20 of the Land Code provides for the exclusive right to acquire land plots into ownership or lease by citizens and legal entities who are owners of buildings and structures located on such land plots.

The provision of a land plot into ownership for a fee or into lease without conducting auctions is performed in the manner provided for by Articles 39.14 and 39.17 of the Land Code, from which it follows in aggregate that a purchase and sale contract or lease agreement for a land plot may be concluded with the applicant in the absence of the grounds listed in Article 39.16 of the Land Code for refusal to provide the land plot.

According to Article 39.16 of the Land Code, the authorized body refuses to provide a land plot without conducting auctions if: a person who does not have the right to acquire the land plot without conducting auctions based on land legislation applied for the provision of the land plot; the permitted use of the land plot does not correspond to the purposes of using such land plot specified in the application for the provision of the land plot, except for cases of placing a linear object in accordance with an approved territory planning project; or the provision of the land plot on the applied-for type of rights is not permitted.

In accordance with Article 39.14 of the Land Code, the provision of a land plot in state or municipal ownership is performed without conducting auctions in the following order:

• preparation of a layout scheme for the land plot in the event that the land plot is to be formed and a surveying project for the territory within the boundaries of which such land plot is to be formed has not been approved;
• submission of an application by a citizen or legal entity to the authorized body for preliminary approval of the provision of the land plot. In the event that the land plot on which a building or structure is located is to be formed or the boundaries of such land plot are subject to clarification, any right holder of the building, structure, or premises in the building or structure may apply to the authorized body with an application for preliminary approval of the provision of the land plot;
• adoption of a decision on preliminary approval of the provision of the land plot in the manner established by Article 39.15 of the Land Code;
• ensuring the performance of cadastral works by the interested citizen or legal entity for the purpose of forming the land plot;
• performance of state cadastral registration of the land plot or state cadastral registration in connection with the clarification of the land plot boundaries, as well as state registration of state or municipal title to it, except for cases of forming a land plot from lands or a land plot where state ownership is not delimited;
• submission of an application by a citizen or legal entity to the authorized body for the provision of the land plot;
• conclusion of a purchase and sale contract, lease agreement, or gratuitous use agreement for the land plot, or adoption of a decision by the authorized body to provide the land plot into ownership free of charge or into permanent (perpetual) use.

When concluding a purchase and sale contract regarding a public land plot, the price is determined:

• based on auction results when concluding a purchase and sale contract for a land plot in state or municipal ownership;
• without conducting auctions in the manner determined by the Government of Russia regarding land plots in federal ownership; by the state authority of a constituent entity of the RF regarding land plots in the ownership of the constituent entity of the RF and land plots where state ownership is not delimited; or by the local self-government body regarding land plots in municipal ownership. [5]

When concluding a purchase and sale contract for a land plot in state or municipal ownership without conducting auctions, the price of such land plot cannot exceed its cadastral value or another amount of the land plot price if it is established by federal law.[6]

Lease with the Right to Purchase

A lease with the right to purchase may be concluded regarding land plots in private ownership as well as regarding land plots in public ownership.

Regarding land plots in public ownership, it is worth noting that a lease with the right to purchase is possible only in cases established by law. For example, by virtue of Paragraph 5 of Article 30.2 of the Land Code, the lessee of a land plot provided for its complex development for the purpose of housing construction, after the approval of documentation for the territory planning in the established manner and the state cadastral registration of the land plots intended for housing and other construction in accordance with the types of permitted use, within the boundaries of the previously provided land plot, has the exclusive right to acquire the specified land plots into ownership or lease.

In this case, the cost of the Land Plot buyout is regulated. Based on Article 39.4 of the Land Code, the sale price of a land plot in state or municipal ownership without conducting auctions is regulated and is established by authorized state or local government bodies. This norm is mandatory and cannot be changed by agreement of the parties.

At the same time, the provision of a land plot into lease for its complex development for the purpose of housing construction is performed at an auction in the manner established by Article 38.2 of the Land Code.

By virtue of Paragraph 5 of Article 30.2 of the Land Code, the lessee of a land plot provided for its complex development for the purpose of housing construction, after the approval of documentation for the territory planning in the established manner and the state cadastral registration of the land plots intended for housing and other construction in accordance with the types of permitted use, within the boundaries of the previously provided land plot, has the exclusive right to acquire the specified land plots into ownership or lease.

A lease agreement with the right to purchase regarding a Land Plot in private ownership should be evaluated as a mixed contract containing elements of both a lease agreement and a land plot sale contract. By virtue of Paragraph 3 of Article 421 of the Civil Code, parties may conclude a contract that contains elements of various contracts provided for by law or other legal acts (a mixed contract). The rules on the contracts whose elements are contained in the mixed contract apply to the relations of the parties under the mixed contract in relevant parts, unless otherwise follows from the agreement of the parties or the essence of the mixed contract. [7]

According to Article 624 of the Civil Code, a lease agreement may provide that the leased property transfers to the ownership of the lessee after the expiration of the lease term or before its expiration, provided that the lessee pays the entire buyout price stipulated by the contract.

A lease agreement with the right to purchase must contain, in addition to the subject matter of the contract, conditions for making lease payments, as well as clearly determine the buyout cost. In this case, lease payments may be credited toward the buyout cost (fully or partially) or paid on top of such cost. An important condition in a contract with the right to purchase is also the determination of the moment the title of the buyer (lessee) accrues.

Simple Partnership Agreement Regarding Land

According to Paragraph 1 of Article 1041 of the Civil Code, under a simple partnership agreement (joint activity agreement), two or more persons (partners) undertake to combine their contributions and act together without forming a legal entity to derive profit or achieve another purpose that does not contradict the law.

Thus, a simple partnership agreement is characterized by the fact that its participants pursue joint goals and do not act as debtors and creditors toward each other, in connection with which the applicant's argument about the need to apply the rules on cross-performance of obligations is not accepted by the district court.

In Paragraph 7 of Resolution of the Plenum of the Supreme Arbitration Court of the Russian Federation No. 54 dated 11.07.2011, On Certain Issues of Resolving Disputes Arising from Contracts Regarding Real Estate to be Created or Acquired in the Future, it is explained that according to Paragraph 1 of Article 1043 of the Civil Code, property contributed by partners as a contribution, as well as property produced as a result of joint activities, is recognized as their common shared ownership, unless otherwise provided by law, the contract, or follows from the essence of the obligation.

In the event that a real estate object is erected on a land plot that is not formalised as the common shared ownership of the partners (or into lease with multiple persons on the side of the lessee), the title to the newly created real estate based on Article 219 of the Civil Code can arise only for the partner who has the rights to the named land plot. In a situation where, contrary to the terms of the contract, a partner who is obligated to contribute a contribution to the common cause in the form of lease rights or through the transfer of a land plot into the common ownership of the partners evades performing the necessary actions for this, other participants in the simple partnership agreement are entitled to demand performance of the said contract in court with reference to Paragraph 3 of Article 551 of the Civil Code. Similarly, courts should qualify claims of partners formulated as requirements for recognition of title to a share in the created real estate, the erection of which was a common goal.

A simple partnership agreement regulates the procedure for distributing profits based on the results of the simple partnership achieving its goal. Unless otherwise determined by the contract, the profit of each partner will be proportional to his contribution. Thus, the right to the Land Plot will also be proportional to the partner's contribution after the completion of the partnership's activities.

Violation of the specified procedure for rights registration is a ground for appealing to court. Thus, in a specific case, the arbitration court established that the shares under the joint activity agreement were distributed by the parties through a supplemental agreement, which was signed without disagreements and was not contested in the manner established by law. Partner 1's obligations to contribute his contribution to the joint activity were performed improperly, which, in turn, entails the impossibility of registering the rights of the other participant to the construction object. [8]

In the event that, based on the results of the simple partnership's activities, a building (several buildings) is erected on an indivisible land plot, belonging to different owners, due to which common shared ownership of the partners to such Land Plot arises, a specification in the simple partnership agreement for the non-proportionate distribution of the partners' income (in the form of obtaining relevant rights to the real estate object) will automatically lead to the accrual of rights to the Land Plot in a share corresponding to the right in the real estate object.

Exchange and Donation of Land

One should distinguish between the exchange of a plot in private ownership and in public ownership. When concluding an exchange agreement regarding a Land Plot in private ownership, one should be guided by the provisions of the Civil Code. At the same time, by virtue of Article 567 of the Civil Code, the rules on purchase and sale (Chapter 30 of the Civil Code) apply to the exchange agreement respectively, if this does not contradict the rules of this chapter and the essence of the exchange. Each of the parties is recognized as the seller of the goods it undertakes to transfer and the buyer of the goods it undertakes to accept in exchange.

Title to the exchanged goods transfers to the parties acting under the exchange agreement as buyers simultaneously after the performance of obligations to transfer the relevant goods by both parties.

When exchanging real estate, title to it arises for the party to the contract from the moment of state registration of its rights to the received real estate. [9]

The rule on state registration of the transfer of title to real estate established by Paragraph 1 of Article 551 of the Civil Code and the norm that such right arises for the acquirer from the moment of registration of rights to it (Paragraph 2 of Article 223 of the Civil Code) apply unless otherwise established by law. According to Article 570 of the Civil Code, title to the exchanged goods transfers to the parties acting under the exchange agreement as buyers simultaneously after the performance of obligations to transfer the relevant goods by both parties, unless otherwise provided by law or the contract.

In the presence of two dispositive norms, each of which establishes an independent procedure for the accrual of titles to real estate, preference is given to the norm that performs special regulation.

Since Article 223 of the Civil Code establishes that the title for the acquirer of property subject to state registration arises from the moment of such registration, and the said article is special in relation to Article 570 of the Civil Code, for each party under the exchange agreement, the moment of title transfer during the exchange of real estate is the registration of its rights to the received real estate, regardless of whether such registration was performed by the other party.

Conditions for the exchange of a land plot in private ownership for a plot in public ownership are regulated by Articles 39.21–39.22 of the Land Code.

Exchange of a land plot in state or municipal ownership for a land plot in private ownership is permitted when exchanging:

• a land plot in state or municipal ownership for a land plot in private ownership that is being seized for state or municipal needs;
• a land plot in state or municipal ownership for a land plot that is in private ownership and is intended in accordance with an approved territory planning project and territory surveying project for placing a social infrastructure object, engineering and transport infrastructure objects, or on which the said objects are located.

The donation of land is possible only between individuals, since performing donations between commercial organizations is prohibited. [10] At the same time, a donation agreement between individuals may also be contested in the event that such a contract is concluded for the purpose of withdrawing a liquid asset on the eve of bankruptcy.

Abuse of rights by the parties when concluding a donation agreement may be evidenced, for example, by the performance of such a transaction not in accordance with its usual purpose, but for the purpose of excluding potential foreclosure on the alienated property of the debtor. [11]

Transactions Related to Restrictions on the Possibility of Using a Land Plot

Transactions related to restrictions on the possibility of using land are common in commercial circulation: these can be transactions aimed at restricting the possibility of using the Land Plot by virtue of establishing the possibility for third parties to use the Land Plot, or its part, or restricting the possibility to dispose of the Land Plot.

Transactions related to restrictions on the possibility of using a land plot are performed in simple written form. Entering a record of the presence of such restrictions in the USRN is subject to registration.

Easement Regarding Land

An easement can be established regarding a land plot based on an agreement of the parties. An easement can be private and public.

Let us recall that a private easement is an easement established regarding a land plot or another real estate object by an agreement between the person requiring the establishment of the easement and in his interests (the owner of the land plot, the holder of the right of permanent (perpetual) use, the holder of the right of lifelong inheritable possession of the land plot, the owner of another real estate object), and the owner of another land plot or the owner of another real estate object. In the event of failure to reach an agreement on the establishment or terms of the easement, the dispute is resolved by a court upon the claim of the person requiring the establishment of the easement.

At the same time, a public easement is an easement established regarding a land plot by law or another normative legal act of the Russian Federation, a normative legal act of a constituent entity of the Russian Federation, or a normative legal act of a local government body, to ensure the interests of the state, local government, or the local population. In the normative legal acts specified in this paragraph of the Methodological Recommendations, the obligation of the body that established the easement to pay the person whose land plot is encumbered with the easement a proportionate fee for the easement may be established, and the amount of this fee may also be established.

An easement agreement is a contract concluded between the person requiring the establishment of the easement (the owner of the land plot, the holder of the right of permanent (perpetual) use, the holder of the right of lifelong inheritable possession of the land plot, the owner of another real estate object), and the owner of a neighboring land plot or another real estate object, and in necessary cases, also the owner of another land plot (neighboring plot). An easement agreement may provide for the obligation of the person in whose interests the easement is established to pay the person whose land plot is encumbered with the easement a proportionate fee for the easement, and the amount of this fee may also be established.

Paragraph 1 of Article 274 of the Civil Code determines that the owner of real estate (a land plot, other real estate) is entitled to demand from the owner of a neighboring land plot, and in necessary cases, also from the owner of another land plot (neighboring plot), the provision of the right of limited use of the neighboring plot (easement). An easement may be established to ensure passage and travel through the neighboring land plot, construction, reconstruction, and (or) operation of linear objects that do not prevent the use of the land plot in accordance with its permitted use, as well as other needs of the real estate owner that cannot be ensured without establishing the easement.

An easement is established by agreement between the person requiring the establishment of the easement and the owner of the neighboring plot and is subject to registration in the manner established for registration of rights to real estate. In the event of failure to reach an agreement on the establishment or terms of the easement, the dispute is resolved by a court upon the claim of the person requiring the establishment of the easement (Paragraph 3 of Article 274 of the Civil Code).

An easement may be terminated due to the disappearance of the grounds for which it was established, as well as in cases where a land plot belonging to a citizen or a legal entity cannot be used in accordance with the plot's special-purpose designation as a result of the easement encumbrance (Article 276 of the Civil Code).

If the dispute is not settled out of court, the easement can be established in court. At the same time, for appealing to court, compliance with a pre-trial procedure is not required. [12]

According to Paragraph 2 of Article 23 of the Land Code, a public easement is established by law or another normative legal act of the Russian Federation, a normative legal act of a constituent entity of the Russian Federation, or a normative legal act of a local government body in cases where it is necessary to ensure the interests of the state, local government, or local population, without seizure of land plots. The establishment of a public easement is performed taking into account the results of public hearings.

An easement can be established only in the absence of another possibility for the owner of the land plot (real estate object) to exercise his right to use the plot (object) belonging to him.

The fee for using the easement is determined by the agreement of the parties, and in the event of failure to reach an agreement — by the court. The fee for the easement is determined by the court based on the principles of reasonableness and proportionality taking into account the nature of the parties' activities, the area, and the term of establishing the easement, and it can take the form of both a lump-sum payment and periodic payments. [13] The amount of the easement fee must be proportionate to the material benefit that the owner of the land plot acquires as a result of establishing the easement, compensating for the restrictions that the owner of the land plot encumbered with the easement suffers.

Reasonable costs arising for the owner of the real estate object in connection with the restriction of his title or the creation of conditions for the owner of the real estate object, for ensuring the use of which the easement is established, to exercise the right of limited use (for example, those related to the need to organize passage through the land plot belonging to the owner, the demolition or relocation of fences, compliance with the pass regime, maintaining part of the plot in proper condition), as well as those formed in connection with the termination of the existing obligations of the owner of the plot encumbered with the easement to third parties, are included in the amount of the fee.

In this case, it is necessary, among other things, to take into account:

• the share of the land plot restricted by the easement in the total area of the land plot;
• the term of establishing the easement;
• the scope of the restriction on using the land plot and the intensity of its expected use;
• the nature of the inconveniences experienced by the owner of the real estate encumbered with the easement;
• the degree of the easement's influence on the possibility of disposing of the land plot.

When making a decision on determining the nature of the easement fee (lump-sum payment in full or periodic payments throughout the term of the easement), for the purpose of the greatest compliance with the balance of interests of the plaintiff and the defendant, it is necessary to take into account not only the content of the claims stated by the plaintiff but also the specific conditions and scope of the easement.

A procedure for changing the fee may be provided for by the terms of the easement. Each of the parties is entitled to appeal to court with a requirement to change the amount of the fee (increase or decrease) in the event of a change in the scope of the restrictions on the rights of the owner of the land plot encumbered with the easement.

Within a specific dispute, the plaintiff under the initial claim requested to change the conditions for using the easement by reducing the fee for it. The courts granted the claim. In this case, the courts indicated that: (1) the fact of the defendant's creation of obstacles in exercising access to the plaintiff's real estate object was established; (2) passage through the land plot regarding which the easement was established is also performed by numerous tenants of the defendant's premises; (3) the cadastral value of the land plot, regarding a part of which the easement was established in 2016, is currently reduced. The court of cassation indicated that these circumstances are not related to a change in the easement fee, since they do not affect the reduction of restrictions on the owner's rights. The establishment of an easement entails restrictions on the rights of the land plot owner. The plaintiff in the current dispute did not indicate that the restrictions on the owner's rights decreased, for example, due to a reduction in the area of the land plot used by the defendant, a reduction in the number of vehicles moving to the plaintiff's building and back, a decrease in the intensity of traffic, etc. [14]

Mortgage Regarding a Land Plot

A land plot may act as the subject of a pledge. The subject of the mortgage, its valuation, the essence, amount, and term of performance of the obligation secured by the mortgage must be specified in the mortgage contract. When describing a land plot, it is necessary to specify its cadastral number, total area, land category, type of permitted use, and other identification data, as well as the details of the lease agreement. A land plot mortgage contract is concluded in simple written form and is subject to state registration.

Based on the mortgage contract, land plots may be pledged to the extent that the relevant lands are not excluded from circulation or restricted in circulation based on federal law. Lease rights to a land plot may also be the subject of a pledge. During a land plot mortgage, the pledge right also extends to buildings or structures of the pledgor located or being built on the land plot.

Unless otherwise provided by federal law or the contract, a land plot acquired using bank credit funds or another credit organization's funds or targeted loan funds provided by another legal entity for the acquisition of this land plot, is considered to be pledged from the moment of state registration of the borrower's title to this land plot.

If the relevant land plot is leased, a mortgage arises by virtue of law on the lease right, unless otherwise established by federal law or the lease agreement. The pledgee under this pledge is the bank or another credit organization or another legal entity that provided the credit or targeted loan for the acquisition of the land plot or the land plot lease right.

In accordance with Paragraph 1.1 of Article 62 of Federal Law No. 102-FZ dated 16.07.1998, On Mortgage (Pledge of Real Estate), a pledge of lease rights to a land plot in ownership by the lessee of such a land plot is permitted within the term of the lease agreement with the consent of the land plot owner.

Subparagraph 3 of Paragraph 1 of Article 352 of the Civil Code provides that a pledge terminates in the event of the loss of the pledged item or the termination of the pledged right. Thus, the termination of a land plot lease agreement entails the termination of the pledge of the lease right to such a land plot, and by virtue of law, upon the termination of the lease agreement, the pledge on the said right also terminates. In a specific case, the court granted the requirement to terminate the pledge, since upon the termination of the lease agreement, the pledge on the said right also terminates. [15]

In conclusion, it should be noted that performing transactions with land requires attentiveness not only to the form of concluding such transactions but also to their content, as well as a preliminary verification of the land plot itself. It is also worth remembering that mixed transactions can be performed with land plots, and contracts not explicitly named in civil legislation can also be concluded.

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References

1. Resolution of the Arbitration Court of the Volga District dated February 15, 2022, No. F06-13564/2021 in case No. A65-15003/2020.
2. Resolution of the Arbitration Court of the North-Western District dated January 31, 2018, No. F07-14043/2017, F07-14045/2017 in case No. A13-664/2015.
3. Resolution of the Arbitration Court of the North-Western District dated June 21, 2021, No. F07-2720/2021 in case No. A56-16783/2020.
4. Order of Rosreestr dated September 2, 2020, No. P/0321 On the Approval of the List of Documents Confirming the Applicant's Right to Acquire a Land Plot Without Conducting Auctions (registered with the Ministry of Justice of Russia on October 1, 2020, No. 60174).
5. Resolution of the Government of Russia dated March 26, 2015, No. 279 On the Approval of the Rules for Determining the Price of a Land Plot in Federal Ownership When Concluding a Purchase and Sale Contract for Such Land Plot Without Conducting Auctions.
6. For example, such a special price amount is established by Federal Law No. 101-FZ dated July 24, 2002, On the Circulation of Agricultural Land.
7. Resolution of the Presidium of the Supreme Arbitration Court of the RF dated March 1, 2005, No. 12102/04 in case No. A56-36561/03.
8. Resolution of the Arbitration Court of the West Siberian District dated December 11, 2014, No. F04-12544/2014 in case No. A45-4593/2014.
9. Paragraph 11 of Information Letter of the Presidium of the Supreme Arbitration Court of the RF dated September 24, 2002, No. 69 Review of the Practice of Resolving Disputes Related to Exchange Agreements.
10. Determination of the Supreme Arbitration Court of the RF dated December 29, 2008, No. VAS-16374/08 in case No. A72-12591/04-27/22.
11. Resolution of the Arbitration Court of the Volga-Vyatka District dated April 28, 2022, No. F01-1316/2022 in case No. A11-15856/2018.
12. Paragraph 1 of the Review of Judicial Practice in Cases on Establishing an Easement on a Land Plot, approved by the Presidium of the Supreme Court of the RF on April 26, 2017.
13. Paragraph 12, ibid.
14. Resolution of the Arbitration Court of the Moscow District dated May 27, 2021, No. F05-11562/2021 in case No. A40-311996/2019.
15. Resolution of the Arbitration Court of the Volga District dated November 18, 2021, No. F06-9234/2021 in case No. A57-31988/2020.