|                                                                                                                                                             |  | RUSSIA ADOPTS LAW ON REGISTRATION OF IMMOVABLE PROPERTY RIGHTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        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|**BISNISHome PageSearchBISNISEmbassyReportsCountryReportsIndustryReportsPublicationsSourcesof FinanceLeadsand EventsExchangeRatesState ExportsOtherSources** |  | November 1997by Ethan S. Burger & Irina PaliashviliA new Russian law "On the State Registration of Immovable Property Rights and Related
Transactions," takes effect January 31, 1998 and is likely to improve the legal basis for investment
in Russian land, buildings, and other immovable property.  The law provides for the creation of a
system of reliable real estate records at a time when Russia's much-reduced inflation rate and
increased capital inflows are making loans more easily available for mortgages and project
finance.The new law provides that registration is the legal recognition and confirmation of the origin,
limitation, transfer, or termination of rights to immovable property.  Registration is accomplished
by entry into a Unified State Register.  The unified register will be maintained at the regional or
municipal level  by a designated local institution.  Such an institution may be a land committee,
inventory bureau, or another body designated by the local government, but will be headed by a
registrar appointed by a federal governmental body with the consent of the relevant political
subdivision (i.e. subject).  Registration activities are limited to those specified by the registration
law.  A single federal body, probably the Federal Commission for Immovable Property and
the Appraisal of Immovable Property, will establish rules for the unified register and will
oversee its establishment and operation by the local institutions.The new law replaces numerous partially-implemented presidential edicts; governmental decrees;
and other federal, regional, and local normative acts that have sought to fill the gap in registration
rules until now.  The law is intended to introduce consistency into the non-uniform local
registration systems that have taken root throughout the country.  The law is to be self-financing
through a fee system, a measure intended to reverse the current state of unreliable record-keeping
that has resulted from a lack of material resources and qualified personnel.The Unified Register
Property rights are first to be registered at the local level. Each entry in the unified register is to be
identified with a unique "cadastre," or registration number.  The unified register will have a
separate section for each item of immovable property that is registered.  Each section will have
three parts:(1) A short description of the property: location, type or name of the property, its area or size (in
the case of a building), designated use, and other relevant information;(2) Data on ownership and other property rights: name of the right-holder(s), relevant personal or
organizational identification, address, type of right(s), the amount of shares held in a right, the
names and details of supporting documents, the date of inclusion of the entry in the registry, and
the name and signature of the local registrar;(3) Data on limitations of rights (including servitude, mortgage, trust management, lease, arrest of
property): application for a right of claim involving the property,  the date for each entry, and the
name and signature of the registrar.  Additional information must be presented for limitations such
as mortgages or pledges of rights to immovable property.  "Special notations" can be included in
the entry to indicate the existence of rights of claim against a specific piece of immovable
property.The unified register is to be maintained in printed and, if possible, electronic form.  In the event of
a discrepancy between the printed and electronic forms, the printed version will have the higher
authority.  The unified register will also contain case files of documents establishing rights to each
piece of registered property.  In the event of a discrepancy between data in the unified register and
a document, the latter will prevail.The registration law only requires registration in the unified register of rights that arise after
January 31, 1998, although rights that arose prior to this date are considered valid.  A holder of
such rights may enter them in the unified register after their creation.  To avoid the risk of
fraudulent claims being made to property rights, property holders should register their rights in
the unified register as soon as possible.  Any individual or legal entity has the right to obtain
information contained in the unified register concerning a specific piece of property within five
days of the submission of a properly prepared written application and the payment of a fee, whose
ceiling will be set by the Russian Government.Implementation 
Since the state registration system is intended to be self-financing, its success will depend on
property owners' willingness to use it.  As the public becomes more aware of the consequences of
the failure to register rights to immovable property (including the invalidation of such rights), it is
likely that state registration will become widespread, thus generating the required revenues to
finance its effective performance.  As the state registration system matures, banks and other
financial institutions are more likely to lend to individuals and legal entities to purchase immovable
property and undertake investment projects.For a more detailed analysis of the new law,
visit BISNIS Online at http://www.mac.doc.gov/bisnis/country/9711law.htm; for the text of the
law on "On the State Registration of Immovable Property Rights and Transactions," visit
BISNIS Online at http://www.mac.doc.gov/bisnis/country/9711text.htm.Ethan S. Burger and Irina Paliashvili are attorneys with the Russian-Ukrainian Legal
Group, P.A., with offices in Kiev, Moscow, and Washington, D.C.This report is provided courtesy of the Business Information Service for the Newly
Independent States (BISNIS)