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. Last Updated: 07/27/2016

9-Year-Old Deal Threatens Family's Home

MTGalina Lanzarotto, left, in her apartment with her daughter, Leonora, mother, Irina, and her son, Alexei, on Monday.
As the hearing dissolved into a shouting match among the lawyers, judge and court clerk, Galina Lazzarotto slumped forward on the wooden benches lining the back of the dingy courtroom and clasped her head in her hands.

"Why are they kicking a family of five out on the streets? Tell me, why?" she said, her voice cracking with anxiety.

The emotional scenes at Moscow's Tverskoi District Court two weeks ago were the latest stage in a protracted legal battle that could see the Lazzarotto family -- Galina and her husband, Lorenzo, their 5-year-old daughter, Galina's 20-year-old son and elderly, disabled mother -- lose the central Moscow apartment that they bought in 1999.

Under Russian law, former owners have the right to reclaim their property if they can prove that they were suffering from mental illness, drug addiction or even alcoholism at the time they sold it.

In this case, brother and sister Eduard and Marina Babayev, who owned the apartment until a year before the Lazzarottos bought it, have argued that Eduard's epilepsy meant he did not know what he was doing when he sold the property. The apartment had two more owners before the Lazzarottos.

Medical experts and now, more importantly, the courts have agreed with the Babayevs, meaning that the Lazzarotto family faces the prospect of losing their home and receiving no compensation in return.

Former owners have one year to file the official documents to reclaim their apartments, said Yelena Kvasova, director of legal services at realtor Knight Frank.

The Babayevs' move to reclaim the apartment was lodged just days shy of the one-year limit and only a short time after Lazzarotto and his wife had bought the property. Once the claim was in, the lengthy legal process began.

Beyond the labyrinthine peculiarities of this particular case, experts said that, with judges often sympathetic to the claims of previous owners, the scenario highlighted a major point of concern for potential apartment buyers.

Sitting in the living room of the disputed four-room apartment, just a short walk from Belorussky Station, Lorenzo and Galina Lazzarotto nervously sipped Italian coffee as they recounted their side of the story on a recent Sunday afternoon.

"We have lived here peacefully all this time, and now we could lose it all. It's crazy," sighed the husband, a balding, voluble man in his late 50s, clasping his hands to his head.

After the economic crisis that sent prices tumbling in 1999, the Lazzarottos bought the apartment through a now-defunct real estate agency for about $70,000 after seeing it advertised in the magazine Iz Ruk v Ruki.

The apartment is now worth about $300,000, his wife said.

They are adamant that they had no idea that there were any problems with the apartment when they bought it. "We looked at another 15 apartments and specifically chose this one. We even got a specialist to look at it and check that everything was in order," the husband said.

It was over three years later, in late 2002, shortly after the birth of his daughter, Leonora, that Lazzarotto said he first heard about the claims. "A piece of paper arrived asking me to attend the Nagatinsky District Court, and I thought it was a mistake," he said.

After the court rejected that initial claim, a series of new cases were lodged in other courts.

Over the next few years, the case dragged on through a series of courts until, on Valentine's Day last year, the Tverskoi District Court sided with the Babayevs and annulled the purchase agreement signed by the Lazzarottos.

Babayev's epilepsy was, the judge concluded, sufficient grounds to withdraw the ownership rights and return the property to the initial owners.

Several months later, the Moscow City Court upheld the decision.

Originally from the quiet northern Italian town of Bassano della Grappa, an hour's train journey from Venice, Lorenzo Lazzarotto first came to Russia in the early '90s.

"I never really had any problems. If you live quietly in this country, then you can live well, and no one will bother you," he said.

But now, as he approaches retirement age, he says he does not know how much more of the current situation he can stand. "Because of this, I no longer have the will to go on living here."

In a Kafkaesque twist, the apartment technically no longer belongs to Lazzarotto and his wife, and they have to go back to court in an effort to reverse the decision to annul their purchase agreement.

"Two weeks ago, I went to pick up some documents, and they said that the flat was no longer our property. I could not stop crying," Galina Lazzarotto said.

The family has asked the Italian Embassy for help, but beyond sending a letter to the Foreign Ministry, there is little they can do, her husband said.

Sergei Kotelevsky, a lawyer for the other side, argued that the original inhabitants were forced out of the apartment after taking out a loan against it following the death of their parents in the mid-1990s.

The Lazzarottos knew about the problems surrounding the property but couldn't resist the knockdown price, Kotelevsky said. "My clients are absolutely within their rights to reclaim their property, and the courts have agreed with us. ... I can't be sympathetic to the other side. I have my own clients to consider."

Real estate experts and lawyers said the case was not exceptional.

"Although it may sound strange, these cases do happen from time to time in Russia. Professionals involved in the residential market are well aware of them," said Alexei Patsev, a senior lawyer for real estate consultancy Cushman & Wakefield.

"Such risks exist for Russian citizens and foreigners," Patsev said.

Knight Frank's director of residential property, Yekaterina Thain, said, however, that nowadays the situation was a lot clearer for potential buyers.

"These cases were happening in the early '90s, in 1991 or 1992, when the market was wild," Thain said. "But now the procedure is very clear, and it has become very rare."

Normally, when an apartment is to be sold, the owner must obtain documentation from a local mental health institution certifying that he is not a patient there, Thain said. "It is a legal requirement, and it does not take long to do."

Both Patsev and Thain agreed that, if the buyer goes to a recognized real estate firm, they should be able to safeguard themselves against similar claims.

"To avoid such a situation, a buyer should do due diligence of the history of the apartment and its owners," Patsev said.

"We advise [our clients] to hire a reliable and well-known real estate agency to do the job. It might be possible to hold such an agency liable for any contingencies that may arise in future," he said.

After years of stress and expenditure, the Lazzarottos said that even if the courts do eventually find in their favor, the case has cost them dearly.

"Which court can I go to now?" Galina Lazzarotto said. "I can't sleep, I can't think of anything else. ... I feel like I might go out of my mind soon."