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Does the city have the right to voluntarily renounce the rights to non-residential premises if the owner of the apartment did not apply for recognition of this property as common property? This issue will be considered by the Supreme Court of the Russian Federation (SK). Disputes on this issue arise in many areas. Rosreestr believes that the city does not have such rights and that in order to classify the building as common property of residents, a will or a court decision on this matter is required. The fact is, lawyers explain, that it is impossible to collect from the owner of the property in the building the costs of maintaining disputed things without his consent. If the residents are not interested in the property, the city may try to sell it.
The Supreme Court will clarify whether cities can administratively prohibit apartment buildings (AB) from becoming owners of non-residential real estate. In this case, the decision will be made between the administration of Balakovo in the Saratov Region and the regional office of Rosreestr. The dispute concerns the basement of the house, the area of which is 259.8 square meters. m, with a separate entrance from the street. In July 2022, employees of the local housing and utilities department, together with representatives of the management company, inspected the site and found that it was "cluttered" and had no lighting, but the house had utilities, including cold water supply and heating. and sewerage systems.
In September of the same year, the city administration decided to terminate the city's ownership of this plot and transfer it to common ownership. To register these changes, the city authorities applied to Rosreestr, but they refused, citing the absence of "documents on the basis of which the right of ownership was terminated."
The Balakovo administration appealed the refusal in the Arbitration Court. The first case was on the side of Rosreestr, where it was decided that the municipality had chosen the wrong way to protect its rights, since it is impossible to determine the legal owner of the building in a dispute with the registrar and a new claim is needed. On the contrary, the appellate and cassation instances supported Balakovo, obliging Rosreestr to cancel the record of the city's rights to the basement. The court noted that "the rights to common property by law belong to the owners of apartments in the building, regardless of whether they are registered or not." In addition, the city itself cannot demand recognition of shared ownership of the property, nor can it demand recognition of this right in absentia, since then it will be a defendant in its own claim, the authorities decided.
Rosreestr had previously filed a complaint with the Supreme Court, noting that the city's property rights "were not disputed by anyone" and did not require the building to be recognized as municipal. The registrar itself does not have the authority or special knowledge to do so.
In addition, Rosreestr believes that increasing the size of common property in an apartment building is possible only with the consent of all owners of the building. Because they will bear the burden of maintaining these objects. Therefore, to terminate the city's rights to this property, either the owner's will (decision of the general meeting) or a court decision recognizing the object as common property is necessary. But neither one nor the other exists, the complaint says. The case has been transferred to the Economic Court of the Supreme Court, the hearing is scheduled for November 19.
Sergey Sergeev, head of the dispute department of the housing and utilities division of the Yakovlev & Partners law group, notes a trend of increasing number of cases concerning common property considered at the Supreme Court level. He believes that if the city refuses to build, a dispute will arise about who is actually the legal owner of the property, which neither the city itself nor Rosreestr will be able to prove. This leads to litigation. Mark Vaskovsky, senior lawyer for commercial disputes at MEF Legal, believes that Rosreestr's position is "more reasonable and consistent". According to him, "unilateral transfer of things can infringe on the rights of apartment building owners". This is because "they not only use the property, but also bear the burden of its maintenance". Mikhail Yasenkov, partner at YurTekhConsult, added that since the 2010s, local authorities have been constantly "trying to get rid of state property" in order to avoid the costs of its maintenance.
If the Supreme Court upholds Rosreestr, it will mean that the city will unilaterally recognize the property as common property and will not be able to impose maintenance obligations on third parties, which would require the owner's consent or a court decision, said Mr. Vaskovsky. Then the municipality will have to start meetings of apartment building owners to terminate their rights to the property, which is always a problem due to the large number of such people, says Mikhail Yasenkov. If the residents of the building are not interested in the building, the authorities can put the property up for sale or lease at auction, says Filipp Terekhin, senior partner at Lyapunov, Terekhin and Partners. But he warns that if the item is not of commercial interest, it will be difficult to sell, and if it does have a common purpose, there is a risk that the transaction will be perceived as invalid.