Survey of Land and Real Estate Transactions in the Russian Federation
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36117 V. 1 Public Disclosure Authorized Foreign Investment Advisory Service, Project is co-financed by the a joint service of the European Union International Finance Corporation in the framework of the and the World Bank Policy Advice Programme Public Disclosure Authorized SURVEY OF LAND AND REAL ESTATE TRANSACTIONS IN THE RUSSIAN FEDERATION CROSS-REGIONAL REPORT Public Disclosure Authorized March 2006 Public Disclosure Authorized Survey of Land and Real Estate Transactions in the Russian Federation. Cross-Regional Report The project has also received financial support from the Government of Switzerland, the State Secretariat for Economic Affairs (seco). Report is prepared by the Media Navigator marketing agency, www.navigator,nnov.ru Disclaimer (EU) This publication has been produced with the financial assistance of the European Union. The contents of this publication are the sole responsibility of its authors and can in no way be taken to reflect the views of the European Union. Disclaimer (FIAS) The Organizations (i.e. IBRD and IFC), through FIAS, have used their best efforts in the time available to provide high quality services hereunder and have relied on information provided to them by a wide range of other sources. However they do not make any representations or warranties regarding the completeness or accuracy of the information included this report, or the results which would be achieved by following its recommendations. 2 Survey of Land and Real Estate Transactions in the Russian Federation. Cross-Regional Report TABLE OF CONTENTS Glossary.........................................................................................................................4 Procedures under the survey..........................................................................................5 1. INTRODUCTION......................................................................................................6 2. KEY FINDINGS......................................................................................................16 Ownership Rights to Real Estate of ARCS Companies..............................................18 General Indicators of Investigated Procedures..........................................................20 Time ..........................................................................................................................20 Total Cost..................................................................................................................22 Unofficial Payments...................................................................................................22 Additional Costs.........................................................................................................25 Tenders.....................................................................................................................27 Agencies....................................................................................................................27 3. LAND RELATED STATISTICAL INFORMATION GATHERING..............................31 3.1. Methodology and Statistical Information Gathering...........................................31 Methodology..........................................................................................................31 Statistical Information Gathering............................................................................33 3.2. Summary of Results..........................................................................................34 Ownership structure of land...................................................................................34 Privatization of land...............................................................................................36 Tenders.................................................................................................................38 Land leases...........................................................................................................40 3.3. Recommendations for gathering and use of the statistical information on land related procedures to track progress with implementation of federal policies and laws at the local level.........................................................................................................41 4. SURVEY METHODOLOGY....................................................................................43 4.1. Overview...........................................................................................................43 4.2. Instruments.......................................................................................................44 4.3. Sampling...........................................................................................................44 4.4. Fieldwork..........................................................................................................44 5. GENERAL INFORMATION ABOUT COMPANIES UNDER SURVEY.....................45 6. GENERAL INDICATORS FOR ALL PROCEDURES..............................................49 7. PROCEDURE BY PROCEDURE ANALYSIS ACROSS REGIONS........................58 8. AGENCY BY AGENCY ANALYSIS.........................................................................74 9. INSPECTIONS.......................................................................................................78 10. PROBLEMS, ATTITUDE OF AUTHORITIES..........................................................79 11. FINAL QUESTIONS................................................................................................82 ANNEXES Annex 1. Methodology and data used in analysis of land and real estate transactions in the Russian Federation. Annex 2 (to Chapter 3). Templates for gathering land and real estate procedure specific statistical information Annex 3 (to Chapter 3). Statistical data used in analysis (Excel tables with specific sources: rows and columns of the Statistical Form ‘3-zem’). 3 Survey of Land and Real Estate Transactions in the Russian Federation. Cross-Regional Report Glossary Term Description BIS Business intermediaries survey (within this project - legal entities and sole proprietors providing intermediary services for locating procedures – are called BIS) ARCS Administrative and regulatory costs survey (within this project - legal entities and sole proprietors that attempted, underwent or completed locating procedures in 2004 - are called ARCS) APD Abridged procedure description CPD Comprehensive procedure description n/a Not available For fee Obtaining documents with payments On contract Something being done on the contract with private organization or physical person Additional Different kinds of services or material contribution made by burdens companies in addition to official payments Official Payments done in order to carry out the procedure (obtain payments documents) required by legal acts Unofficial Payments or presents given personally to the officials in order to payments carry out the procedure (obtain documents) not required by legal acts Free of charge Obtaining documents without payments Stage Part of the procedures that implies obtaining a document (a set of documents) from a government authority (several government authorities) 4 Survey of Land and Real Estate Transactions in the Russian Federation. Cross-Regional Report Procedures under the survey Procedure#1 Obtaining (lease) a land plot, which is currently state or municipal property, for construction on, with a preliminary agreement on the object location Procedure#2 Obtaining ((#2A) ownership rights or (#2B) lease rights) a land plot, which is currently state or municipal property for construction on, without a preliminary agreement on the object location, during auctions or tenders Procedure#3 Obtaining rights (#3A – ownership and #3B – lease) on land plots that are currently state or municipal property, with premises, buildings or constructions, which are private property Procedure#4 Lease of a real estate object (premise, building or construction) which is currently municipal property, without the procedure of tender (including for targeted use) Procedure#5 Lease of a real estate object (premise, building or construction) which is currently the municipal property during tenders or auctions Procedure#6 Transferring a premise (building) from the residential use to non- residential one Procedure#7 State registration of rights on real estate and real estate transactions (in the cases of (A) buying or selling a real estate object (land plot, building or premise) in the secondary market, (B) drawing a contract of a real estate object (land plot, building or premise) lease for the term of more than 12 months in the secondary market) Procedure#8 Transferring a land plot from one category into another, changing designated use of a land plot Procedure#9 Privatization of a real estate object (building or premise) which is currently municipal property 5 Survey of Land and Real Estate Transactions in the Russian Federation. Cross-Regional Report EXECUTIVE SUMMARY This survey of businesses’ access to land and real estate in 15 regions of the Russian Federation was carried out by FIAS at the request of the Ministry of Economic Development and Trade and the Federal Antimonopoly Service. A closely related FIAS project provided a series of detailed recommendations to both organizations.1 Numerous business surveys by FIAS since 2000 (and also documented by the Center for Economic and Financial Research, CEFIR) have shown that access to land is among the most severe administrative