When the construction of a building is finished, the developer needs to obtain a special “commissioning permit” (also called “operation permit”) from the authorities to start using the building. The developers of an unauthorized construction do not have such a permit. Operating a building without the permit is illegal and entails liability according to the Code of the Administrative Offences of the Russian Federation (the Code). The fines have recently been increased manifold.

1. FINES BEFORE 06 AUGUST 2019

Legal entities operating a building without a commissioning permit can be fined up to RUB 20.000 by Rostekhnadzor¹ (para. 5 art. 9.5 of the Code).

2. FINES AFTER 06 AUGUST 2019

Starting from August 06, 2019 the threshold of fines for the legal entities will increase and will amount to RUB 500 000 – RUB 1 000 000.

The fines for company’s officers will also increase and will amount to RUB 20 000 – 50 000.

The amendments are introduced by the Federal law dated 26.07.2019 № 222-FZ.

3. OTHER PRACTICAL IMPLICATIONS

The liability covers not only unauthorized constructions (which do not have commissioning permits), but also authorized ones if for some reason the using of the building commenced before obtaining the commissioning permit.

There is no liability for absence of a commissioning permit, if the construction of a building did not require a building permit.

The fine can be imposed on any person, actually using/operating a building, be it a developer, owner, tenant etc.

According to the practice, the fine can be imposed repeatedly. Usually Rostekhnadzor continues to penalize a company every 2-6 months, if it does not stop to operate the building or does not obtain a commissioning permit. The courts support the position of Rostekhnadzor.

Not only Rostekhnadzor imposes a fine on the legal entity according to Art. 9.5 of the Code, but it also usually sets a term to stop the operation of a building or to get the commissioning permit.

If Rostekhnadzor finds out during the next inspection that the legal entity continues operating a building without the permit, the authority can penalize the company for non-execution of the instructions of Rostekhnadzor: fine up to RUB 100.000 or (in exceptional circumstances) suspension of its activity up to 90 days (para. 6 art. 19.5 of the Code).

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, 2019.

¹ Federal Service for Ecological, Technological and Nuclear Supervision