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. Last Updated: 07/27/2016

For City's Tenants The Ground Shifts

Those working in Moscow quickly discover that for many reasons the Moscow city authorities make their own laws. This special status is sanctioned by the constitution that gives Moscow, as a separate "subject of the federation," the power to legislate on some matters.

It has a particular impact on agreements concerning the ownership and use of buildings and land. Ownership of land is a relatively new concept in Russia and there are many who regard the land as the inalienable property of the people and resent private ownership. Old forms of land tenure, such as the right of use which may be temporary or permanent, are more acceptable because the ownership does not change.

The Moscow authorities oppose the implementation of the privatization program in the city partly because it will in time facilitate private ownership of land.

However, the right of use has disadvantages both for the local authority, which does not receive an income because it is usually given free, and for the investor, who may not feel confident that his rights are secure.

The Moscow authorities have recently issued a series of resolutions that will replace the temporary right of use of land with lease agreements and regulate the payments made in respect of leases, thereby generating additional income for the city.

Resolution No. 438, issued Sept. 8, 1994, will bring to an end all existing rights to the temporary use of land and replace them with short-term leases for periods not exceeding five years. The Moscow Land Committee has been instructed to review all existing grants of temporary use by Jan. 1, 1995, and replace them with leases.

A further resolution issued Sept. 26 deals with payments for the right to enter into a lease agreement in Moscow. Such payments are a kind of premium and are payable in addition to the rent.

The Moscow Land Committee will review all long-term leases granted since Jan. 1, 1993, where there was no competition process, and such leases must be re-registered.

In the process the committee will insert into the rent for 1995 a premium payment that will be fixed by the Commission of Land Relations and City Construction. We can, therefore, assume that in future a premium will have to be paid on all new leases granted by the city authorities.

In an attempt to create greater openness a temporary order has been approved giving natural and legal persons the right to apply to the relevant authorities (Land Committee, Architectural Committee, Environmental Committee) for information about land in which they have a genuine interest.

Marcia Levy, an attorney with Norton Rose, has been practicing law in Moscow for three years.