A new Federal law on the registration of the real estate (Realty registration law)^[1] adopted by the Russian State Duma last year will enter into force on January 1, 2017. The statute will have impact on the vast majority of businesses and natural persons, as it concerns the general legal framework for registration of rights to the real estate:

• merger of the State register of rights and the State cadaster into the Unified state register of realty;
• liability of the registrar for the non-conformity of data introduced in the Register with the documents filed by applicants;


• other technical improvements (electronic form, terms of registration etc.). 

Please find the review of the new statute in the Mosgo & Partners newsletter.

1. CURRENT REALTY REGISTRATION SYSTEM

Nowadays real estate located in Russia is recorded in two different registers:

1) State Real Estate Cadaster (State cadaster), which contains technical identification data about real estate objects, such as area, description of the borders, designated use, cadastral value etc.

2) Unified State Register of the Rights to Realty and Transactions therewith (Register of rights), which contains information about rights to and encumbrances on the realty. Rights to the realty are deemed existing in relation to third parties as of the moment of their recording in the Register of rights.

A newly constructed real estate object must, first, be recorded in the State Cadaster, and only then the rights to it can emerge – after recording in the Register of rights. The successive recordings in two registers obviously increase the registration time and costs.

Further, paper form still remains the main form of keeping the registers, even though electronic files are nowadays created too. Other technical obstacles on using the registration system exist, such as the requirement to apply to the registration bodies in the place where the realty is located, number of documents that should be filed, etc.

2. NEW RULES

The Realty registration law is aimed at dealing with the above mentioned impediments of the system and, therefore, introduces the following main changes:

1) Unified register
The State cadaster and the Register of rights will merge into the Unified state register of realty (Unified register), which will be kept by the Federal Service for the State Registration, Cadaster and Cartography (Rosreestr).

2) Powers of Rosreestr
Rosreestr will be allowed to assign only certain limited powers concerning cadastral recording to the Cadastral chamber – a state financed entity under the control of Rosreestr. Rosreestr must remain in charge of all registration activities, including processing applications on registration & recording and decision-making.

3) Form of the Register
The Unified register shall be kept in electronic form. Individual files will be additionally kept in paper form, if applications and supporting documents are filed in paper form.

Cadastral recording in the majority of cases will be conducted simultaneously with the registration of rights.  

4) Liability of a registrar
The registrar shall be liable for the non-conformity of data introduced in the Register with the documents filed by applicants and will have to reimburse damages caused by his/her illegal acts or omissions.

5) Place of application
Applicants may file documents with any territorial subdivision of Rosreestr or multifunctional center of state services at their convenience. Place of application does not depend anymore on the location of the realty.

6) Processing time
Application processing times have been reduced:

• 10 working days – simultaneous cadastral recording and registration of rights;
• 7 working days – registration of rights;
• 5 working days – cadastral recording;
• 3 working days – registration of rights based on the notarially certified contracts.

Two extra working days are to be added to the time limits above, if the documents are filed with multifunctional centers of state services instead of Rosreestr.

7) Suspension
The list of grounds for suspension of registration and cadastral recording will be substantively expanded and will contain 51 grounds. The maximal suspension times have been increased from 1 to 3 months, if initiated by Rosreestr, and from 3 to 6 months, if initiated by the applicant.

8) Proof of registered rights
No certificates of rights will be issued. Rights are to be confirmed by the extract from the Unified register (the law adheres to the newly introduced practice of abolishing the certificates).

It is important to note that all rights and encumbrances, as well as other information about the realty introduced to the State cadaster or the Register of rights will remain valid. However, existing rights & encumbrances will be recorded in the Unified register simultaneously with the recording of new rights & encumbrances originating after the Realty registration law enters into force.

3. CONCLUSIONS

The new Realty registration law provides for the unification of the two currently existing registers – the State cadaster and the Register of rights – in the one Unified register under the control of Rosreestr. The law introduces changes, which are supposed to make the registration procedures less burdensome for the applicants, such as reduction of document processing times, possibility of filing extraterritorial applications to Rosreestr, as well as the simultaneous cadastral recording and registration of rights.

The registrar shall be liable for the non-conformity of data introduced in the Register.




All newsletters of Mosgo & Partners are available on our website and LinkedIn.

This newsletter shall not be viewed as legal advice. It is prepared for educational and informational purposes only. Mosgo & Partners is not responsible for any consequences of reliance on the information contained in this newsletter without specific professional advice.

© Mosgo & Partners. Moscow, 2016.

---

[1] Federal Law dated 13.07.2015 No. 218-FZ “On the registration of realty”.