"Real Estate and Investments. Legal Regulation", the journal

Issue 1, 1999

Peculiarities of Real Estate Rights Origin and Problems of State Registration

Piskunova M.G., chair Russian Institute of State Registrars at the Ministry of Justice of the Russian Federation

An integral system of the state property rights’ registration brings important changes to the realization of the norms of the Legislation; & in the rules on the real estate market. The Federal Law ¹122-F3, July 21, 1997 “about the state registration of the rights for real estate” (let’s call it the state registry’s law) gave the definition of the state registration.

The state registration is the legal act of official declaration & approval of the rights for the real estate according to the Civic Legislation Book of Russia. Different law practices of the Justice establishments; variety & complicity of the norms of the legislation used in the state registration provide the actual publications on this issue. The principal distinction of the state registration system is that the rights for the real estate, the deals with it, the limits of the rights, not the right owners, realty & the documents are subject to the registration.

In the state schedule of the rights for realty the registration is made in a different order & followed by the different judicial consequences.

The present article’s goal is to describe the problems of the state registration. The publication have to help the participators of the realty market define legal consequences of the state registration act or its absence, & choose the right way of behaving in a certain situation. The article could be useful for notary & state registrars.

Rights for real estate that are subject to the state registration

According to the 2nd paragraph of the 8th article in the Civic Legislation of Russia the rights arise from the moment of their registration if the law doesn’t say differently. The main legal consequences of the registration are the rights for realty & the title.

The following rights are subject to the registration according to the §1, article 131 & 216 in the Civic Legislation of Russia:

  1. A ownership;

  2. A right to run the property;

  3. A right to manage the property operatively;

  4. A right of lifeterm inherited owning the land;

  5. A right of termless using the land;

  6. Servitude.

The right of things connects with both an object & subject of the right in our legislation. For example, for land there are just an ownership a right of lifeterm land inheritance, and a right of termless using land & servitude. Only private persons have the right of lifeterm inherited owning. The legislation doesn’t concern the right to run & manage the property.

There are also rights of private persons such as a right of the owner’s family members to use a dwelling (§1, article 292, Civic Legislation of Russia); a right to live in a dwelling (article 538, Civic Legislation, 1964). The state Registration would make the rights' realization, regulated by the dwelling, family & inherit legislation, depend on the registry's act. It would be a problem for justice establishments to define subjects of the rights & reasons for the registration.

A husband, wife, children, parents, relatives, unworkable dependants are referred to the family members according to the 53rd article in the Dwelling Legislation of Russian Federation. Other persons who live together might be referred to the family members as exclusion. The state registration is not required for the rights of non-owners to use the dwelling, because the rights are not in the Civic turn & cannot be freely expropriated. There is another way to protect those rights. The rights are being saved when dwelling ownership is delegated to another owner (#2, article 292, CL). A list of persons, who save the rights for dwelling, is the main term of a selling-buying contract (#2, article 558, CL). That’s why copies of house books, certificates from passport departments are the required documents for a notary approval or registration of the deals. The Rights’ registration that was not stated in the law would lead to carrying out the administrational function by the Passport-Visa Service of the Ministry of Internal Affairs.

The Governmental Decree #767, October 6, 1998, set the order of the registration of the rights of family members to use the dwelling according to the 292nd article, CL.

The registration is being made according to the application of an owner & his/her family. This act of a Russian citizen contradicts with the Constitution & the 3rd article in the Law #11 about the state registration. According to the article citizens can just take part in establishments of the registries & settling the sum of payment.

A right to manage the property that was purchased for income money is also referred to the rights for things according to the #2, article #298, CL. The establishment can have only an “item ownership”.

A kind of a right is defined according to the 299th article, CL. It is been done for schools according to the federal law about education.

A mortgage is not considered an item right despite the discussion on an item. An obligatory right is a legal nature of a pawn & a mortgage as a realty pawn. The main argument in favor of this fact is that real estate stays in use & ownership of a pawner (#1, article #338, CL); and a pawnee doesn’t receive a right to own an item; and a right of a pawn stays valid in case of an item loss (#2. Article #345, CL).

As it is known, a pawn is usually stated in a contract or in the law (#3, article #334, CL). In case of signing a mortgage contract, the deal is registered in the state schedule. The schedule reflects a pawn, stated in a law, as limiting the right of a pawner (for example, when buying/selling in credit/by installments (#5, article #488, CL), or rent the property (#1, article #587,CL)).

The article #26 “The state registration of the right to rent” in the Registry’s Law caused a problem. There are discussions about what should be registered: a rental contract as a deal/a right to rent/limited right to a lessee. Other laws according to #1, article #131, CL, might complete the list of the rights that are subject to the registration.

There might be an opinion that the registry’s law approved a new tight that is subject to the registration together with rental contracts, t.e. a “right to rent”, because there are requirements to the registration of only rental contracts in the CL. However, the logical & systematical interpretation of the Law & the Rules let make a conclusion that the Registry’s Law doesn’t fix a “right to rent”. The first paragraph, article #2 in the Registry’s Law says that the state registration is a legal act of an official approval of limiting, delegating and abolishing the rights for real estate according to the CL. The state registration in the law includes a whole registry’s procedure. The CL defines an object of the registration. Only the CL can define what is subject to the registration: a right, a deal or a limit of a right.

The first paragraph, article #26 in the Registry’s Law says that one of two contract parties can apply for the registration of his/her right. If the right to rent is subject to the registration, only a lessee can apply for it. That contradicts the law. Then, the second paragraph says that a rental contract should be presented for the registration; and the third paragraph tells about a contract registration.

Thus, the Registry’s Law doesn’t fix the required registration of the right to rent. The lessee has a right to rent according to the properly signed rental contract. If the contract is not subject to the registration, the right to rent will be valid since the moment of signing the rental contract (#1, article #651,CL). But if the rental contract is subject to the registration, the right to rent will be valid since the moment of contract registration. The obligatory right to rent cannot arise apart from the contract. If the rental contract is not subject to the registration according to the CL, the individual registration also cannot be made.

The list of the rights that are subject to the registration does not include the right to rent. The contract is considered to be signed when it is registered in the III-1 part of the state schedule. The rental contract burdens the rental realty, because the contract is valid in case of expropriation, and new owners take over the rights of a lessee according to the law (article #617, of CL).

Origin of an ownership

Ownership arises since the registration according to the #2, article #8,CL. Thus, the legal consequence of the registration is an item right for property.

You should differ the registration of the rights from the registration of the real estate deals. The legislator defined the moment of the contract registration as the moment of its signing (#3, article #433,CL). If the deal on realty expropriation is subjected to the registration, the deal is considered to be signed (#2, article #558,CL). The certain mutual obligations of the parties arise after the registration: the Seller has to delegate the property; the Buyer has to take it & pay for it.

However, the obligations are just mutual promises, which might be not kept. It is necessary to register the rights of the Buyer to be a realty proprietor. It is the second step of the registration. Just after writing it down in the state schedule the Buyer’s rights for property will be valid.

Thus, the deal’s registration & the registration of the rights are different registry’s activities with the different legal consequences. The rights for a new property (article #219,CL); a property bought under the contract (article #223,CL); & long-term ownership (#1, article #234,CL) are valid just after their registration. The state registration usually sets the rights according to the general rule, but in the cases listed below it just approves those rights.

Origin of an ownership since the moment differed from the state registration

  1. Inherited ownership arises when the inheritance was put into effect (article #546,CL, 1964). A day of death of an inheritee is considered to be a day when the inheritance comes into effect (article #528,CL). Heirs have the right but are not obliged to receive a certificate about the right for inheritance in a notary. After receiving the inheritance, heirs/heiresses can divide the inherited property according to their shares in a will. A contract is signed after receiving the certificate about the right to inherit. The certificate about the right to inherit according to shares in a will is seized because share property for an inheritance ceases. The heirs, dividing the inheritance, act as proprietors according to the law. Justice establishments often refuse their rights’ registration explaining that without the registration of the right to inherit in shares the heirs do not have a right for realty and that’s why cannot be in charge of it. Those refusals are not right. The advanced registration is not required before the division of the inheritance.

  2. Reorganization of legal persons is the next way to receive the rights for realty that does not have an owner (#2, article #218, CL). In the reorganization new establishments rights arise since their registration in the state schedule of legal persons. A transitive act or a dividing balance causes the rise of the rights.

    A legal person is considered to be reorganized since the registration of new legal persons. If the reorganization is held ass a form of merging, the legal person is considered reorganized since registering the season of the merged legal person’s activity (#5, article #57, CL).

  3. In case of dwelling privatization a right arises since the reorganization of a contract about gratuitous delegation in the self-government authorities. The registration is made according to the 7th article in the Law #1541-1, July 4, 1991 “about privatization of dwelling fund in Russia” in edition F3, August 11, 1994, #26-F3.

  4. The right, set by the court decision, arises since the moment defined by the court. It is said in #1, article #28 of the Registry’s Law. It is not required to indicate the moment of a right rise in the court decision. Because the contents of the court decision should be conformed to the norms of the Civic & Arbitration Law Books; not to the norms of the registry’s laws.

    If the moment of a right rise is not indicated in the decision, the rights are registered according to the general rule.

    There is an opinion that if the moment of a right rise is not indicated in the decision, the right will arise since putting the court decision into effect. However, the moment of a right rise is stated by the material norms of the Civic Legislation, not by the processional ones. Ownership (#3, article #225, CL), long-term ownership (#1, article #234, CL), voluntary construction (#3, article #222, CL) might be approved by the court, but arisen after the registration (#2, article #8, CL).

  5. When privatize state & local companies by reorganizing them into join-stock companies, where 100% of shares belong to the state, the ownership that is included into share capital according to the privatization plan arises since the registration of the companies as legal persons (the Decree #8, #12, February 25,1998). According to the 217th article, CL, the state & local property is delegated to private persons in an order stated in the legislation. It is not required for an ownership to be the end of privatization. The term of company’s privatization is defined by expropriation of 75% of state shares or by the privatization plan.

    In some cases the ownership coincides with the registration of another right.

  6. If husband/wife buys a property, the right of join property arises since the registration of the buyer. Marriage contract can set different rules (article 33, 34, Family legislation, RF).

  7. Share ownership for public property in a dwelling & “condominium” arises since the registration of the right for premise in a dwelling or “condominium”, because share ownership is connected with the right for dwelling (article #290, CL, #2, article #23, the Registry’s Law).

  8. The right to run & manage the state companies arises since the registration according to the law of state & local ownership (article #216,299, CL).

  9. When selling real estate the right for land arises since the registration of the right for realty (article #552, CL) the buyer owns just that piece of land where his/her realty is situated.

  10. There is a special order for public proprietors’ rights. It is states in the Decree “about the division of state property into the federal, regional, republican, local property” #3020-1, December 27, 1991. The right of citizens for realty, referred to the state property or delegated from the federal property, arises since ratifying the governmental Decree about delegation. If the Decree wasn’t ratified during three months after the day of registration, the right arises since the ownership decision was made.

The document, confirming federal, state, & local ownership for the certain objects, is a property schedule; and before writing the object down the schedule – it is the list of objects made according to the Presidential Decree #114-RP, March 18, 1992.

Let’s consider the way of owning premises in dwelling, construction, garage & other cooperatives according to the fourth paragraph, article 218, CL.

The law “about ownership in the USSR”, March 6, 1990, and later the 13th article of the law “about ownership in Russia”, December 24, 1990 (with the editions from June 24, 1992) said that the cooperative members, who paid a fee for an apartment, country house, garage, other dwelling they use, own this property & have a right to sell, bequeath, rent, sign deals. The right has a reverse power: a cooperative member is an owner, independed on when he/she paid the fee: before or after putting the law into effect.

However, after they put the first part of the law into effect in January 1, 1995, the right arises after paying the fee and after the registration. In Mr. Sukhanov’s opinion, the mutual relations of the consumer’s cooperative as an owner & shareholders as cooperative’s members have a futures character. As soon as a shareholder pays out his fee for the property he/she owns it. The ownership is subject to the registration. The 4th paragraph, article #218,CL, doesn’t have instructions for an exclusive moment of an origin of the right for the real estate in a cooperative. That means that the right will arise since the registration according to the fee’s payment.

At the same time, the law practice, norms of the USSR Laws about property, and different interpretation of the fourth paragraph, article #218, CL, give a right to another opinion. So, Mr. Krasheninnikov says that a cooperative member have an ownership right under the law, not since the state registration.

State registration and the legality of the subject.
The hereditary rights of the citizens

The definition of the moment of appearance of the right on the property has an important practical meaning. As it was stated above, not the documents on the property , but the arising civil legal relations are subject of the state registration . Physical and juridical persons possessing civil and legal capacity (legality of the subject) are subjects of such legal relations .

According to the item 2 of the close 17 of the Civil code of Russian Federation the legal capacity of the the citizen arises at the moment of his birth and lasts till his death. Consequently State registration of his rights, state registration of the bargain with citizen’s participation can not be carried out after death of the citizen because one of the basic conditions of the legality of the bargain are legal and act capacities of the parties. The day of death of the physical person the legality of the subject is lost, the patrimony is open ,the rights and duties, which have arisen at life, pass to the successors in the assignment order. That’s why the stablishments of justice do not registrate the informations concerning the complete payment of the share in cooperative society by the dead persons, the decisions of courts concerning Recognition of the rights of the dead persons, contracts of privatization with participation of the dead persons. If the specified documents get in the given above list of the exceptions and confirm the right of the citizen without state (or other) Registration, they can be included in the patrimony. In a case of recognitions by court of the dead person’s rights on property the problem is similarly solved.

This decision confirms buying of the properties by the patrimony giver during his life. State registration of the right can not be made later then the date of death because all rights of the citizen, including The rights recognized by court, are stopped by his death.The judicial decision concerning the recognition of the rights of the patrimony giver can be treated as a reason for including of property in patrimony and for distribution by the notary of the certificate concerning the rights on the patrimony, which is the indisputable reason for state registration of the rights of the successors on the real estate. The notary, making out the patrimony, has the right to request an extract from the Uniform state register of the legal owner’s rights for the inherited object of the real estate for being convinced in the absence of the contradictions between the data of the register and judicial decisions, checking if the property hasn’t been left from possession of the patrimony giver during his life.

The problems arise in case of death of one of the parties before starting state registration of the immovable property bargains. If the bargain, subject to state registration, is notarially certified, without being registered in the establishment of justice, it is considered as non-legal (item 3 of the close 433 of CC of RF), and can not bear the consequences (item 1 of the close 165 CC). It is worth noting, that in this case the item 3 of the close 165 of CC ) is not applicable, because it provides the consequences of evasion of the parties from registration, but not the discontinuance of the legality of the subject (if no subject of the right is not present there is nobody to evade from).

It is obvious, that in case of death of alienor, an acquire has the right to address to court having received the failure in state registration of the bargain for recognition of his rights, if the bargain was actually executed.

In this case state registration of the rights of the purchaser (but not of the bargains!) will be carried out on the basis of the judicial decision.

It is wrongful , from the juridicalpoint of view to speak about the introduction of the successors of the alienor in the arisen obligations, relations before state registration of the contract. However if the contract of alienation is not subject to state registration ( For example, purchase - sale or exchange of the real estate of uninhabited purpose), such contract is considered made from the moment of signings by the parties. In this case, the obligations relationship arises without state registration of the contract, and in the case of death of one of the parties of the contract it is possible to speak about assignment.

If the alienor has died after the conclusion of the contract of alienation of the real estate, but before registration of transition of the rights, the assignment arises on the party of the seller. If the transfer certificate was signed, the successors inherit property, which has left actual possession and usage during the life of the enheritance giver and the rights on which are burdened by the obligations stipulated by the contract. In this case the registration of transition of the rights based on the concluded contracts in a simply written form is carried out according to paragraph 3 of item. 1 close 16 of the Law about state registration on the application of both parties of the contract, where the seller is represented by the successors. If the successors evade from registration of transition of the rights, it can be carried out according to item 3 of close 551 of CC of Russian Federation on the basis of the judicial decision. If the contract is notarially certified and is registered in the Establishment of justice the same as the bargain and is also executed by the parties, the registration of the right of the purchaser can be carried out only according to his application, as it is established by paragraph 4 of item 1 of close 16 of the law concerning the state registration.The death of the alienor is not obstacle for State registration of transition of the right to the purchaser.

If after state registration of the bargains the acquirite has died, the registration of transition of the rights to him can not be carried out. However if the immovable property was transferred to the purchaser according to the transfer certificate, the alienor, remaining title of the proprietor, loses rights of possession ob the property, because the specified property is a subject of the obligations which has arisen from the contract and executed by him. In this case the obligations of the legal relationship are carried out by the successors. After execution of all the obligations of the patrimony giver (for example, property payment, if these was not made) they get the common right of the share property. If the property was not paid by the purchaser during his life, the alienor has the right (representing the creditor of the patrimony giver) to make a claim in the order, stipulated by the item 63 of the legislation of Russian Federation concerning the notarial management. State registration of the transition of the rights to the successors can be carried out on the basis of the contract of Alienation and certificate about rights on the patrimony given by the notary.

Thus, the main problem is the death of one of the parties before the state Registration of the bargain. The Clause 16 (paragraph 4, item 1) of the Law about state registration establishes, that in the case of the notarial certification of the bargains the application for state registration of the rights is submitted by one of the parties.

But in case of death of one of parties before the reception of the documents on registration, the registration even of the notarially certificated bargain can not be carried out . It is necessary to pay the special attention to the contracts of the chronic contentss with maintenance. In item 3 of the close 596 of CC of Russian Federation is established, that the contracts of chronic rents for the benefit of the citizen died to the moment of conclusion of the contract, are void. If such agreement will be registered in establishment of justice after death of the receiver of the rent, it will be void by virtue of express indication of the law, in despite of the conducted registration. In many regions there was a practice of submission of the application on registration by both parties in the case of the notarial certification of the agreement. In the case of submission of application only by one part ( Especially if a lot of time has passed from the moment of notarial certification) the registrar can have completely clear doubts concerning the available basis for Registration (item 1 of the close 19 of the Laws about state Registration). This article doesn’t establish the "Working life" of the material contract, i.e. the maximum term between the certification of the bargains and registration. All can happen during this period. Therefore article 16 of the Law about State registration of the rights,establishing only an order of the state Registration according to CC of Russian Federation (item 6 of close 131), should not contradict to the main provisions of the Code and interfere to Establishments of justice to check the legitimacy of the bargains with the real estate.

Regarding this question it would be useful to pay attention to the impermissibility of the extensive interpretations of paragraph 3 of item 8 Order of the full Commission of the Supreme Court of Russian Federation dated August 24, 1993 ¹ 8 " About questions of applications by some courts of the Law of Russian Federation "About privatization of the Housing fund in Russian Federation ". According to the indicated explanation , if the citizen, having filed the documents, necessary for privatization, has died before execution of the contract or up to the Registration in a local administration, it is not a reason for courts to refuse the Satisfaction of demands of the heirs concerning the including of the living quarters in heritable bulk. If a citizen has expressed his will on privatization being alive, this fact is not the reason for rising of the property rights, and gives reasons to the heirs to require judicial including of the real estate in heritable bulk and further registration of the rights on the patrimony in a due order. If the heirs will not state their demands in court, the flat remaisn in state(Municipal) property.

Thus, The indicated judicial document does not suppose to include possibilities for buying the property taking in consideration only the intent declaration of the citizen. But on practice some bodies of Privatization of housing are improperly guided by the given explanation. Sometimes the contract of transfer includes a surname of the died in brackets. The agreement of transfer should be concluded with the alive hirers, if one of them has deceased after the submission of application but before the execution of the contract, it is a Problem of the heirs. Referring to this judicial document we can not speak about state Registration of the bargain in case of death of one of the parties only for reason that the person has expressed his will being alive.

Frequently in practice the establishment of the justice find out, that the entry about the right or bargain in the registry is dated the day after the day of death of the legal owner(For example, in the case of issue by the citizen of the letter of attorney for the collecting of the documents and for making contract of privatization of housing by his name). After death of the mandator his representative, acting on the base of the letters of attorney, signed the agreement of privatization and stated the registration of the rights.

The Establishment of the justice has registered the right of the dead person without knowing about the death of the citizen. It is realized,that in the case of finding of such fact ( Comparison of date of entry about the right in the registry and date indicated in the death certificate), such entry should be reset by establishment of the justice. It is possible, that according to paragraph 2 of item 1 of close 2 of Laws about State registration the registered right can be challenged only judicially, and juridical establishment can not independently abrogate it’s own registration. As it was marked above, the legal relations are registered. Entering of entry into the registry acquires validity of the juridical act only in conformity with the general provisions of the civil procedure laws. The entry about the right or about the bargain made after death of the legal owner or participant in the deal has no forces of the juridical act and can not " reanimate " legal relations, ceased by disappearance of the subject of law.

This serious problem of the legal Practice of state registration requires the solution by special adoption of the normative acts. Certainly, in the case of the subsequent bargains with such asset a question should be solved with allowance of the valid rights of the innocent purchasers relying on entries in the Uniform state registry. It is possible, that it will be the subordinate legislation certification,because the current legislation allows to arrange a question without entering changes in the Law of state Registration.

The problem can be arised in the case of Registration of transition of the rights to buyer if the the legal person of the vendor of the real estate will be liquidated. The agreement of the purchase of the real estate of uninhabited purpose and sale is considered concluded from the moment of signing by the parties of the agreement representing by one document containing all essential conditions of the bargain. If the real property was transmitted according to the transfer certificate to the buyer, the organization- vendor, remaining the title owner, loses competences of possession of property.

The buyer is the legal holder of such asset (item 14 of the Order of the full Commission of the Russian Federation dated February 25, 1998 ¹ 8 " about some questions of practice of the resolution of disputes concerning the property rights, the protection, and other real rights "). Up to the moment of the state registration of transition of the rights to to the buyer he has no right to dispose of the asset, using and possessing it. If before state registration of transition of the right to the buyer the organization – vendor is liquidated in established order the rights are ceased without legal succession since the of day entering of recording about liquidation in the state registry of the legal persons. But it is not the encumbrance for registration of the buyer’s rights for the asset. The registration of rise of the right is realized in due order after the conducting of legal examination by establishment of justice of the contract of purchase. It is natural, that one of the Conditions of legitimacy of such bargain is the accessory of asset to the vendor on the right of property, therefore the buyer is obliged to present such documents in registering body. Otherwise the registration can be refused, then the buyer can address for confession of his rights to court.

Features of state Registration of the right of the joint property

The right of the common share property represents the right, which is characterized by the possession simultaneously by several persons. A share the the joint property does not mean the right on the defined part of the property. State registration of the rights of the joint property is made entering a recording about the right with indication of all the joint owners. State registration of the rights of the common property is realized by entering of recording about the common right of the joint owners with the indication of his share in the right.One of the important features of the joint property is the simultaneous arising with the reception of a thing in the property of several persons (item 4 of close 244 of CC of Russian Federation). For registration of the common property each legal owner needs to submit the application enclosing the document about payment. It causes difficulties in the case of unwillingness of one of the joint owners to register the right.However an order of registration of the share properties depends on the basis and of the moment of rising of the right.

On the base of the agreements of acquiring of the real property in the joint property the right on the real property arises at the moment of state registration of the right, which is realized simultaneously with the application of all the joint owners by entering recordings about the right of each participant with the indication of his share. In this case state registration of the rights only of one of the joint owners can not be effected without registration of the rights of the others. For example, if the real estate is bought by three buyers, but one of them evades from registration of transition of the right, it is impossible to carry out registration of the right only of two joint owners with the indication of 2/3 shares in the right. Thus, it is impossible to tell, that the transition of the right has not been made for 1/3 of the share, and it has remained in the property of the vendor. The vendor did not transmit to each buyer 3 shares,but one thing to three persons,and the property right to asset can arise only simultaneously. Signing together one agreement the purchasers are obliged to file simultaneously applications and documents for state registration. Otherwise their actions can be regarded as evasion from state registration, those cases are clirified by item 3 of close 165 and item 3 of close 551 of CC of Russian Federation.

If one of the joint owners alienate his share the right on the real estate will belong to a purchaser of a share since the moment of state registration of the right in conformity with demands of the close 251 and item 2 of the close 223 of the CC of Russian Federation. In this case registration is realized on application of the purchaser by entering in the register the recording concerning the right and the indication of the rent of a share. The registrar can not require registration of the rights for other joint owners because their right has arisen earlier and has been recognized valid in law.

In case of succession of asset in shares the property right of the heirs arises not since the moment of state registration, but since the moment of opening of patrimony by virtue of an item 546 of CC of RSFSR 1964. Certificate about right on the patrimony are issued by the notary for all the heirs or to everyone in dependence on their desire. The data of the certificate reconfirm the right and are the basis for state registration according to paragraph 5 of item 1 of close 17 of the law concerning state registration. In this case of submission of the application by one of the heirs, the registration of the right can be also carried out without registration of the rights of other heirs.

At privatization of the common flat one agreement of gratuitous transfer is to bi signed by all participants. If the flat is transmitted to the common property, the amount of original copies of the agreement should correspond to the number of the participants. For example the agreement of privatization " 25/86 shares municipal flat ", is improper,because the object of privatization can be presented by the living quarters, finding in hiring:

The whole municipal flat, or a part of the flat consisting of one or several rooms , or other living quarters. The right of share property arises not with the moment of state registration in establishment of the justice, but from the moment of registration of the agreements in a body of a local administration. In Similar situation each of the participants of the privatization can apply for the state registration of the right irrespective of other properties.

Registration of the right of the common property on the base of the decree should be effected without registration of the rights of other joint owners. According to item 1 of the close 28 of the law concerning the state registration, the registrar has no right to give up in registration of the rights established by the decree.

At the conclusion of the agreement by the participants of the common property about establishment (change) of a share, new shares should be introduced in Uniform State registry on simultaneous applications of all the joint owners. If the common property was earlier registered in establishment of the justice, you don’t need to make state registration but an enter of changes in existing registration recording. According to closes 251 and 233 of CC of Russian Federation the share in the property arises from the moment of state Registration in the case of disposal of a share by the joint owner. The shares are defined by the law or agreement between the joint owners, but the law doesn’t establish, that shares appear at the moment of state registration. In a case of joint property property right(not share right) with indication of the size of a share or without it, is registered in Uniform state registry,because joint property is only a kind of real right of the property. It would be incorrect to affirm, that, for example, at the moment of definition of a share the joint property ceases, and the share property appears. As it was said above, since the moment of state registration the joint owners have one right on one object of the real estate, but the definition of a share isn’t linked to the moment of state registration in prevailing law.

If the citizens have acquired a flat in joint property and have registered it in establishment of the justice the joint right with later difinition of the shares by agreement , having transformed joint property in a share one, it is necessary to apply not for registration of the share rights but for changes introduction.Each of the share owners owes to be given a Certificate of registration with indication of his share in the right.

The basis is underlined the right establishing document, on the grounds of which the joint property has arisen earlier, and also the agreement about definition of a share. If we take into consideration that the agreement on establishment (change) of a share is not the bargain, demanding obligatory notarial certification, so the expenses on change of status of the joint property on share one or on change of the rate of a share will be minimized.

The additional difficulties arise at the definition of a share of a dead person , if he was the participant of the joint property at life, hence, his share was not defined. In a similar situation it’s too late to give peaces of advice about undesirable formation of the joint properties by the persons who are not marital partners or country members (Farmers). In the notarial practice the agreements about definition of a share between the joint owners are made " on behalf of a dead person " (!) by his heirs. The given agreements is not subject to registration in establishment of the justice, because do not enter into number of the bargains subject to registration, hence, are considered non-valid from the moment of signing by the parties.

Besides it is impossible to conclude an agreement on behalf of the person, whose legal personality has been ceased by death. If there are no disputes between the heirs and other participants of the common property, it is not necessary to define judicially a share of the dead person, especially if the shares are recognized as equal according to the close 254 of CC of Russian Federation. The agreements, in which heirs act not on behalf of the dead person, but on their own behalf as the universal assignees of the estate-leaver, do not contradict to the legislation. The solution seems to be found in including by the notary of the definite share of a dead person in the mass of the succession,thus the rights on it are acquired in a due order. If the joint right was registered before , the modifications are introduced to the registry on the basis of the agreement and on application of the owners of the joint property. The registration of the rights is made by the heirs on the basis of notarial certification. If the joint right wasn’t registered earlier in the registry, all the participants have to made state registration of the right on the basis of the document confirming the rights of the heirs on the patrimony, and for other participants on the basis of document reconfirming the arising joint property and the agreement on definition of a share.

The consent of the owners of the share properties on state Registration

According to item 1 of close 24 of the law concerning state Registration in a case of registration of a share in the right of joint property the consent on the part of other owners owe to be applied to application for state registration made out in a body of state registration or notarially certified. The indicated demand derivates complexities at state registration of the rights. But this demand should meet provisions of the Civil Code (in conformity with the item 6 of the close 131 of CC of Russian Federation) about common property. The Civil code of Russian Federation establish only one limitation for realization of a share right , it is the observance of rights of other participants of the common property on primary purchase at disposal of a share (item 2 of close 246, close 250). If the material standard doesn’t stipulate the consent for disposal of a share, the law of procedure can not grant new rights to the other joint owners to the detriment of the owner of a share.

The necessity of the consent of the participants of common property on state registration of a share is defined by the way of acquirement of the rights according to the Civil Code.

The following cases of acquiring and of registration of the rights on the common property are possible:

1. At rise of the common property on the basis of the agreements signed by all the share owners (for example,acquiring of the real estate in share Property, making agreement of establishment, change of a share), those contracts express the consent of all the joint owners, therefore the consent for registration of the share in right of submission of separate applications by each of them is not required.

2. If the cummutative contract of disposal by one of the participants of a share in the right is notarially certificated, the notary should observe the first option of the share. It can be proved by applications of other joint owners confirming the disclaimer of primary purchase, certificate issued by the notarial offices about transfering of notification of the vendor about sale of a share to the joint owners, if more than month has passed from the moment of notification of all joint owners up to certification of the agreement.

If the first option at disposal is observed, the notarially certificated copies can be substitute the consent of other joint owners and to prevent the suspension of the registration.

3. In case of rise of a share in right on the basis of the bargain concluded in a written form, written consents with the other joint owners should be applied to application for state registration of the agreement and right.

If there are no consents of all the joint owners state registration is suspended for two months, the applicant and joint owners who have not expressed the consent are informed within three days. Taking into consideration one month term of state registration the aggregate term in this case can constitute three months. This time is granted to the joint owners for judicial application of demands about transfering of the rights and responsibilities by agreement of disposal of a share (item 3 of close 250 of CC of Russian Federation).

4. If the share in the right is sold to other participant the common property, the consent of others isn’t required, because the right of primary purchase is respected only at the sale of a share to the by-stander.

5. In the case of disposal of a share in right on the basis of the gratuitous bargain the consent of other joint owners isn’t either required because the first option should be observed only for compensative bargains. The right arises in this case on the basis of the agreement concluded in conformity with the Civil Code, the supplementary claims to the conclusion of an agreement can not be statutoried by the laws of state registration. But for the reason that sometimes the donation of a share in the property, for example of a municipal flat, frequently represent the hidden sale of a room, the state registrar has the right to require performance of the consent of others joint owners according to close 24 of the law.

7. The application of the consent of other joint owners is not required at registration based on the certificate of acknowledgement of the right on the patrimony. Such certificate is the document reconfirming the indisputable right, it is also underlined as one of the basis for registration of the right in the close 17 of the law about state registration. The same is for the certificate on a share of common asset of the marital partners given in a due order according to the close 75 of Fundamentals of legislation of Russian Federation about the notariate.

8. The consent with the other participants is not required for registration of a share property on the basis of the decree. In a case of absence of such consent, but availability of the judicial decision the registrar has no right to give up in state registration of the right, established during judicial trials (close 28 of the Law about state Registration).

Thus, any of share owners can apply for registration of the share right irrespectively of other joint owners on the basis of:

  • Agreement about gratuitous acquiring of the share;
  • Certificate about right on patrimony , given by the notary;
  • Certificate of the share right on a common property asset of the marital partners given by the notary;
  • Adjudgement about confession of a share in the right of property;
  • Agreement of acquiring of a share of other joint owner.

Compulsion to a state Registration

The state registration being right applicable activity is characterized by the principle of optionality, due to the general principle of the civil right,that means to the Autonomies of will of the participants of civil turn-over in establishment of the rights and responsibilities. Optionality (or applying " character of process of state registration) is reflected in item 3 of close 131 of CC of Russian Federation, according to which the certification of the effected registration is made on the application of the legal owner. Compulsion of state registration is established by the item 1 of close 131 of CC of Russian Federation and item 4 of the law about state registration, that means, that its absence attracts non-recognition of the estate in land, and non-validity of the bargain with the real estate (item 1 close 165 of CC of Russian Federation). But the real estate depends only on the legal owner, whether he applies for registration of the arisen right or remains a non-title holder, because the reason for the beginning of civil law procedure is the acquiring bythe persons of the civil rights by their free will and in their own interest (item 2 of close 1 of CC of Russian Federation).

Stability of a turn-over of the real estate is guaranteed by the provisions of the legislation stating that the relations of the vendors and buyers with the third part are not changed before registration of transition of the right (item 2 of close 551 of CC of Russian Federation).

Any special state approbations for absence of registration of rights and bargains are not stipulated by the legislation. The legal owners and participants in the deal owe to commit a necessary state registration for protections and confessions of their estates in land or to pay damages to other party in a case of evasion from registration. It is impossible to recognize by offence the absence of the state registration of the right of the landholder and to bring him to administrative responsibility, for example, as it is stipulated by the close 6 "Responsibility for infringement of the rules of the account and registration of objects of the uninhabited fund " of the law of Moscow dated April 2 1997 N7 "About state control of the account, registration and use of the objects of uninhabited fund in Moscow city".

It is possible to refer to an attitude of the full Commission of the arbitration court which has noted, that after transfer of the real property to the buyer, but before state registration of transition the property right is saved for the vendor, and the buyer is a legal landholder (Order of the full Commission ÂÀÑ dated February 25, 1998 ¹ 8, item 14).

The declaring character of the state registration does not contradict to its imperative character as the substantive rules of the civil right. If the agreement is subject to state registration,it is considered made from the moment of registration, otherwise, from the moment of achievement of the agreement concerning the essential conditions in the statutory of agreement’s form (closes 432, 433, 434 of CC of Russian Federation). So, the agreement of purchase and sale of living quarters is considered concluded from the moment of state registration of the bargain (item 2 of close 558 of CC Russian Federation), and these of purchase and sale of the real estate of uninhabited purpose from the moment of signing of the agreement by the parties (or of notarial certification, if the parties have decided to make the bargain in qualified form). According to item 1 of close 20 with allowance for item 1 of close 2 of Federal acts , the registation of the rights and bargains which can not be registrated in conformity with the legislation, should be refused. For example, it should be refused in registration of agreements of the residential premises employment, contracts of purchase and sale of the real estate of uninhabited purpose, because the indicated contracts are considered as non concluded and law obligations, founded on them are considered arisen without state certificate.

According to general standards of CC of Russian Federation about compulsion of state registration of rights and bargains, the Law about state registration concretizes cases of registration’s necessity. According to it the following objects are subject to right’s registration:

à) The real property wich right establishing documents are made out after 31 January, 1998 (item 2 of close 4); á) earlier arisen rights before registration of the bargain or other limitations (encumbrance) of the right (item 2 of close 6 and item 2 of close 13).

The second case has the direct relation to a subject of this article. If the real estate has appeared without certificate of state registration, the owner has the right to use and to possess it. For example, a citizen, inherited living quarters or house, can live there without making out the certificate of the right on the patrimony and registering the rights in establishment of the justice (The truth is that he forfeits the evidences of the existence of the rights). He is also obliged to bear expenses, connected with realization of the property right to pay municipal payments and taxes, to repair housing. But if he will decide to dispose of the real estate (to sell, to exchange, to offer etc.), his right should be necessary registered in the state registry. If the legal person has acquired the right on a building after reorganization by the way of legal succession,he has the right to use and possess the real estate, and is also obliged to pay necessary payments and taxes.

It is necessary to note, that administrative and revenue laws do not link responsibility of the holders to registration of the rights on the real estate according to civil legislation. So, tax on asset in representing by the building should be paid from the moment of its production on balance account irrespective of the basis of acquiring. But The organization will be able to realize the possession by the real estate (Sale, transfer on hire basis or deposit) only after state registration of the right.

The conclusion

But not all the rights are subject to state registration, but only real rights, which can be freely dispsen in the civil circulation. The right of obligations are not registered, and arise on the basis of duely concluded agreements. If the agreement is subject to state registration, it is registered as bargain. From the moment of state registration of the bargain the agreement is recognized as concluded, and the right of obligation founded on it does not require additional registration.

The main feature of acquiring of the rights on the real estate is the rule, according to which the moment of rise of the right is connected with the moment of state registration of the right. But the the present list of exceptions reconfirms, that for the majority of cases of buying property the lawgiver has established „ other moment of rises”. Only from the moment of state registration right on bought and newly founded real estate arises. In the case of acquiring the rights on the real estate on other basis ( succession, reorganization, privatization and others) the moment of rise of the right is not connected with the certification of state registration. But the registration of the arisen right is necessary for realization of competences of the owners in conclusion of the bargains. Thus, it is possible to make conclusion,that the state registration is invoked to provide legitimacy of the civil circulation and these is its value for the market of the real estate.