Overview of the Russian Real Estate.

Essay by teleccopit October 2005

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1. Introduction.

Both the Russian Constitution, adopted in 1993, and the Civil Code, adopted in 1994, uphold the right to own private property, which includes both land plots and buildings. Despite these guarantees, however, land reform was for a long time the subject of national political debate. Several proposed land codes worked their way through the State Duma, the lower house of Parliament, only to have the President reject them, largely because these codes infringed, rather than defended, basic property rights. Finally, the Land Code of the Russian Federation (the "Land Code") was approved by the State Duma on September 20, 2001, by the Federation Council on October 10, 2001, and was signed by the President on October 26, 2001. As provided in the "Law On Implementation of the Land Code" No. 137 FZ (the "Implementing Law"), the Land Code came into force on the date of its publication by Rossiyskaya Gazeta, on October 30, 2001.

The Land Code represents a significant reform most particularly because of the sanction and encouragement that it gives to the creation of private ownership rights to land. There are also some other new and exciting developments resulting from the policy of Land Code to provide and develop Russia's real estate market.

Russian legislation provides also for the possibility of private ownership of other real estate objects, importantly, of the industrial premises. Due to the privatization processes which took place during the mid-90s, a market for private real estate was created in Russia. This market includes all types of real estate objects, including industrial, commercial, residential and retail space, any of which may be offered by their owners for sale or for development.

Currently, despite certain limitations, investors have a significant array of choices in terms of using, leasing, and even owning property under...