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1. Property Rights – Weak
Goal – Property rights that are legally protected, secure, recorded in a single, accurate, widely accessible electronic registry and that lead to high levels of formal ownership for all citizens
Core Question: Does an effective and sufficient legal framework exist to protect property rights for all citizens?
No – Weak, the problem of insufficient regulation of government services in the area of real property rights is being addressed by drafting administrative procedures pursuant to Federal Law No. 210-FZ, dated July 27, 2010, and entitled Organization of Government and Municipal Services. However, there remain problems with the transfer of state and municipal property into private ownership and with variances in how the laws are applied in this area.
1.1.1 Are property rights clearly defined and protected by law? No – Very Weak – Ranking 133th out of 144; Score 2.8 out of 7. Updating laws in a timely manner remains a problem in the protection of real property rights. Trend ↓
Security of Tenure
1.1.2 Can citizens challenge the legality of government takings? No – Very Weak – 127rd out of 144; Score 2.7 out of 7. However, in recent years, the process of resolving disputes over real property has become more transparent and effective. Trend ↓
Source: Global Competitiveness Report 2012-2013 – World Economic Forum
Bundle of Rights
SQ1 What is the bundle of rights (group of rights such as occupancy, use and the right to sell or lease) associated with both residential and commercial property ownership? Strong – Property rights are protected in the Russian Federation primarily by the Constitution of the Russian Federation.
Source: Chamber of Commerce and Industry of Saratov Province
Core Question: Does a reliable property registry exist including cadastral, title and mortgage lien information? Yes – Very Strong, the quality and availability of state services for property registration continues to improve.
1.2.1 Cadastral Information
Status – Very Strong
SQ 2 Is cadastral information (information about the dimensions and location of land parcels) accessible to the public? Yes
SQ 3 Is zoning/permitted use information included and are regulations respected and enforced? Yes
SQ 4 Are Geographic Information Systems (GIS) including Global Positioning Satellite (GPS) information used to create and update the registry? Yes
Source: Federal Service for State Registration, Cadastre & Cartography https://rosreestr.ru/wps/portal/cc_ib_english_version
1.2.2 Title Registry
Very Strong – Ranking – 46th out of 185 Trend ↓
188.8.131.52 What is the number of procedures required to register the transfer of a property from one owner to another? 5
184.108.40.206 What is the duration of time in calendar days that it would take to complete the transfer? 44
220.127.116.11 What is the total cost of the transfer including all fees, taxes, etc. expressed as a percentage of the value of the property? 0.2%
Source – Doing Business 2013 – Registering Property, World Bank
1.2.3 Mortgage Registry
Status – Strong, the Russian mortgage market is growing rapidly.
SQ 5 The mandatory use of notaries or similar officials slows down and adds cost to the process. Does a notary need to be involved in the registration process? Yes, however the Federation’s regulation allows the notation of mortgage in a purchase and sale agreement avoiding the need to separately register the mortgage.
SQ 6 Is information in the registry available electronically? Yes.
SQ 7 Title insurance is indemnity insurance against financial loss from defects in title and from the invalidity or unenforceability of mortgage liens. Is title insurance available to lenders? No, however with the growth of the market, many international companies are exploring market entry.
Core Question: Do citizens understand and trust property rights institutions and avoid the informal sector?
No – Weak, owners and tenants of real property do not trust government agencies.
SQ 8 What is the status of land ownership?
Weak – the process of granting parcels of land for various purposes is still insufficiently regulated.
Source: The Chamber of Commerce and Industry of Saratov
1.3.2 Home Ownership
SQ 9 What is the percentage of formal home ownership?
More than 80% resulting from privatization – Very Strong
1.3.3 What is the percentage of services firms that report competing with unregistered or informal firms? 30.2% – Weak, informal payments are often required for providing government services or performing government functions.
Source: Enterprise Surveys 2012 http://www.enterprisesurveys.org/Data/ExploreEconomies/2012/russia#informality
Field Question (FQ) 1
Even if legal provisions exist, what is the actual status of Property rights and ownership for business?
Property rights are protected in the Russian Federation primarily by the Constitution of the Russian Federation. Matters involving rights to real property and the protection of these rights are governed by federal laws, specifically Russia’s Civil Code, Land Code, Urban Planning Code, Housing Code, and other federal and regional laws and regulations adopted pursuant to them. The enforcement of real property rights is also governed by the procedural laws, the Code of Commercial Procedure, and the Code of Criminal Procedure of the Russian Federation, and these rights can be enforced either by a holder of such rights directly, or by a government agency or court upon a petition by the owner or tenant of rental property. Updating laws in a timely manner remains a problem in the protection of real property rights.
Based on an analysis of the key indicators and trends, the institutions of the real estate market are developing unabated, the legal regulation of this market is improving, and the investment climate is gradually becoming more favorable.
FQ 2 Are standard leases used for commercial space? If not, what is a typical arrangement for rental?
FQ 3 What are the processes for government expropriation of property especially notice and due process for owners? Are those laws followed or do expropriations happen by collusion between officials and connected elites?
There continue to be violations of the law by officials of government agencies and local governments.
FQ 4 Are businesses owners compensated fairly when their property is taken for public use?
FQ 5 What protections do businesses have who lease space from arbitrary eviction by owners?
FQ 6 What is the actual experience of transferring a property, accessing the registry and dealing with registry officials?
According to the laws of the Russian Federation, conveyances and encumbrances of real property are valid only if they are officially registered. The official registration of real property provides a high level of efficiency; however the process of granting parcels of government land for various purposes is still insufficiently regulated and there is a high level of corruption in the sale and lease of land.
FQ 7 How large is the presence of informal markets for goods, i.e. itinerate vendors?
Source: The Chamber of Commerce and Industry of the Saratov Province