BY OLEG MAMONT, HEAD OF PRACTICE, A.T.LEGAL FOR REBUBLIC

The domestic real estate market is full of mysteries. Here's one of them: what is an apartment unit? Someone will say, "analogous to an apartment. Another would argue that it is a non-residential space. The third one will remember an industrial building converted into a loft or a hotel room with serviced apartments. In practice various objects are called apartment units by the developers. That is why officials and businessmen, the creative class and young families with children live in them. For some people it is expensive real estate or an investment, and for others it is an opportunity to save 10-20% compared to a similar apartment.

In Russian law, the concept of "apartment units" is absent in principle. Soon the situation may change: the Ministry of Construction promised to fill the gap in the legislation by the end of the year. "Dengi" figured out what awaits the owners and whether to buy apartment units in the hope of higher prices.

OLEG MAMONT ANSWERS QUESTIONS FROM THE REPUBLIC PUBLISHERS:

QUESTIONS:

Apartment units as a new type of housing appeared long ago, but their status has never been legally regulated. Why did this happen? Have there been any attempts to resolve the issue? Why do you think the deadline for the new bill has been disrupted? We are referring to this document https://sozd.duma.gov.ru/bill/1162929-7

Attempts to resolve the issue of the status of apartment units have been made before. The previous draft law on apartment units was submitted to the State Duma in June 2018, but was withdrawn from consideration after Letter of the RF Supreme Court No 4-VS-6922/18 of September 27, 2018, which noted a number of serious problems, violations of rights and potential litigation, which would entail the transfer of apartment units into the category of residential premises:

- apartment units do not meet the requirements for residential premises, because they were designed in accordance with the requirements for non-residential premises;

- apartment units do not meet the requirements to provide social infrastructure, and as a consequence, the rights of citizens who have purchased apartments at a higher price are violated and there is an additional burden on social institutions that are already in operation;

- potential conflicts of interest between owners living in the apartment units and business owners;

- issues regarding the treatment of the land plot with the mixed-use building.

Is it true that the draft law does not provide for the transformation of existing apartment units into residential premises and applies only to buildings put into operation and legal relations arising after its enactment?

The bill does not expressly provide for the conversion of existing apartment units to residential premises. The new provisions apply to buildings for which a land plot development plan or a site plan is issued within which such mixed-use building is located after the law came into effect.

We saw "time-bombs" in the bill. For example,

а) To convert a room into a dwelling, the consent of all owners on the floor (there may be those who are satisfied with everything) and the isolation of the room from nonresidential premises (may be impossible by design) is required

b) The problem of allocating a share in the common property in existing complexes, the vulnerability of owners' interests in disputes with legal entities, the Managing Company

c) It is unclear whether multi-functional houses will participate in capital repairs, whether they will be covered by maternity capital, preferential mortgages and tax deductions

d) Developers are not obliged to comply with SanPIN and other technical requirements, to make infrastructure in the construction of mixed-use buildings, and the authorities are not obliged to plan places in schools, kindergartens for residents of apartment units.

e) Do you see other problems?

The biggest problem is that the bill applies only to residential space in mixed-use buildings, but does not apply to the already built buildings with apartment units. There is no answer to the question of what is the mechanism and whether previously built apartment units can be recognized as residential premises if the building is provided with transport and social infrastructure and complies with city planning standards for residential premises.

The draft law does not resolve the issue of the legal status of the land plot under the mixed-use building and the type of its permitted use is unclear.

The Duma Committee on Natural Resources, Property and Land Relations reasonably noted a significantly simplified procedure for transferring such residential premises to non-residential premises. The tenants may be faced with a situation where a gym, hostel, or apartment hotel, for example, suddenly appeared next door and without their approval. It is advisable to work out the issue of coordinating the decision to convert residential premises into non-residential premises with the neighbors from above and below, if such premises are residential premises.

We can only hope that all unresolved and problematic issues will be worked out and the bill will be amended in subsequent readings.

Source: https://republic.ru/posts/101532