On 14 February 2025 the Draft Law No. 841857-8 “On Amending Articles 247 and 259.3 of Part One, Articles 689 and 700 of Part Two and Article 1137 of Part Three of the Civil Code of the Russian Federation” (hereinafter – the “Draft Law”), providing for the possibility of registering information on the order of possession and use of real estate in common shared ownership, was submitted to the State Duma.
The Draft Law proposes to introduce mandatory registration in the Unified State Register of Immovable Property (hereinafter – “USRN”) of:
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agreements or court decisions determining the procedure for the possession and use of real estate in shared ownership
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contracts of gratuitous use of real estate objects, if they are concluded for a period of more than a year1
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the rights to use real estate by a legatee to whom such a right has been granted by a testamentary refusal (subject to registration as an encumbrance on real estate2).
The Draft Law provides for the mandatory notarization of agreements concluded by participants in shared ownership concerning the order of possession and use of real estate. In cases where it is not possible to reach an agreement, a court may decide to determine the procedure for the possession and use of shared property at the request of any owner. At the same time, in case of state registration of such agreements, the established procedure of possession and use of real estate will be preserved even in case of transfer of a share in the right to the common property to another person. Consequently, there will be no need to conclude a new agreement on the procedure for the possession and use of common real estate when the composition of its owners changes.
The introduction of mandatory registration in the USRN of information on the order of possession and use of common shared real estate will contribute to the elimination of significant risks, primarily for new participants in shared ownership who are only planning to acquire a share in the common right to real estate. If the Draft Law is adopted, the purchaser will be able to learn reliably about the restrictions imposed on the property he or she is acquiring.
Similarly, the current absence of mandatory registration of agreements on the free use of real estate creates a potential threat to property purchasers and creditors who are unaware of existing encumbrances. Adoption of the Draft Law will eliminate this gap and provide third parties with access to information on the rights of the parties to an agreement on the gratuitous use of real estate.
If the Draft Law is adopted, the relevant amendments will enter into force on 1 January 2026.
1As of now only contracts for the gratuitous use of a cultural heritage object are subject to state registration (clause 3 of Article 689 of the Civil Code of the Russian Federation) and contracts for the gratuitous use of a land plot (clause 2 of Article 25, clause 2 of Article 26 of the Land Code of the Russian Federation).
2In accordance with the procedure provided for by Federal Law No. 218-FZ “On State Registration of Real Estate” dated 13 July 2015.