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. Last Updated: 07/27/2016

City Acts to Protect 'Vulnerable' From Deadly Flat Scams

To combat a rash of murders linked with the sale of apartments, the Moscow government has forbidden vulnerable people such as the elderly, the mentally ill and alcoholics to sell their homes without city permission, a top city housing official said Wednesday.


To sell their apartments, people belonging to those categories must prove to authorities that they have a new place to live, Nikolai Maslov, deputy head of the Moscow housing department, told a round table of Moscow realtors.


Konstantin Popov, head of a consortium of 70 Moscow realty firms, said the controls interfere with "the freedom to sell" one's apartment. He said that one of his clients, an elderly Moscow woman with no children, wants to sell her apartment, take the money and move in with a cousin in St. Petersburg, "but she can't, because she can't prove to the department that she has a place to live.


"But for now, it does more good than harm," Popov said of the city measure.


The privatization of 1.3 million apartments, 40 percent of Moscow's housing supply, over the last two years has created what Popov called "the first real free market of property owners in Russia, where each person suddenly became the owner of property worth tens of thousands of dollars." Many apartments in the Moscow center today sell for even more.


But what was a windfall for most has been the downfall of a handful of Muscovites. People swindled out of their apartments have ended up homeless, and several elderly people who sold their apartments with the condition of living there until death were found dead shortly after under mysterious circumstances, according to Alexander Gorbachev, a police officer who investigates apartment-related crime.


Local officials, who have compiled lists of names and addresses of "vulnerable" residents, enforce the new controls through Moscow's propiska system, a Soviet holdover in which every city dweller's address must be registered and printed on his or her passport, Maslov said.


Apartment buyers are no longer permitted to register their new residence until the former owner is registered in a new dwelling place, Maslov said.


In another move designed to protect apartment owners, the city will soon introduce mandatory licensing, education and testing for real estate agents, Maslov said.


"We must define who has the right to act in the interests of the apartment owner, because on their honor hangs the fate of a human being," he said in an interview, noting that a Muscovite's apartment is often his or her only asset.


Konstantin Aprelyev, head of the Moscow Realtors' Guild, blamed most apartment-related crime on profit taxes of up to 30 percent on property sales, which drive would-be sellers to deal in cash with shady realtors in order to hide the income from officials and then find themselves defenseless against fraud.


In the United States, revenue from selling a house or apartment is not taxed if it is spent on a new dwelling or invested elsewhere.