Real Estate Legislation News

Last summer turned out to be quite a busy season, as evidenced by the adoption of a number of new regulations in the field of real estate construction.

First of all, on July 19, 2011, Federal Law No. 246-FZ was adopted to regulate the creation of artificial land plots on federal bodies of water for the purpose of constructing or developing buildings or other such structures.

The law filled in the prior gaps relating to the specifics of (a) obtaining title to such land plots, (b) entering them into cadastral and state registries, and (c) re-categorizing water-resource lands as other types of land once

reclamation has taken place.

The law is primarily intended to clarify procedures for the land reclamation projects taking place on the Gulf of Finland in St. Petersburg.

Secondly, it is also worth mentioning Resolution of the Plenum of the Russian Supreme Commercial (Arbitrazh) Court No. 54 of July 11, 2011.

In this resolution, the Russian Supreme Commercial (Arbitrazh) Court summarized existing court practice in relation to investment agreements – a type of contract widely used in construction projects.

In particular, the Russian Supreme Commercial (Arbitrazh) Court ruled that, depending upon its terms, the provisions of an investment agreement can be subject to the rules that normally apply to sale and purchase agreements, construction contracts, or simple partnerships. On that note, the resolution further stated that, unless otherwise is proven, an investment agreement will be considered a sale and purchase agreement for future real estate property.

KPMG in Russia and the CIS