Russian authorities will allow Ukrainian companies not to register rights to real estate in Crimea. This will help them avoid Kyiv's sanctions
Moscow - Kyiv, July 4 (Navigator, Mikhail Stamm) - Vedomosti publishes details of the bill on the regulation of property and land relations in the Republic of Crimea and Sevastopol. The document defines a special procedure for conducting real estate transactions. Russian owners will have to register the rights before the transaction. Foreign companies will be able to sell real estate, rent it out or take it as collateral without first registering the property.
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The bill was prepared by the Ministry of Economic Development together with the Crimean Committee on Land Resources and Rosreestr, a representative of the Ministry of Economic Development said.
The rule on exceptions for foreign companies was included in the project at the request of Ukrainian businessmen, explains Andrey Ivakin, director of the department of the Ministry of Economic Development. After the annexation of Crimea, they wanted to sell real estate or re-register mortgages, says Ivakin, but Ukrainian legislation prohibits them from making real estate transactions in Crimea.
The Law on Occupied Territories allows real estate transactions on the peninsula to be registered only in the Ukrainian registry. In addition, according to Ukrainian law, after a transaction, title documents are stored with the Ukrainian registrar, and Rosreestr needs the originals.
Now transactions are registered according to Ukrainian rules, he says, and they are waiting for Rosreestr branches to start operating in Crimea, and for the Crimean authorities to determine the list of documents required for registration.
Risks will be minimized, Ivakin promises. Registration of the transfer of rights consists of two stages, he says: the first is verification of documents and that the seller is the real owner, the second is an entry in the register. Legal examination will take place in any case, he assures: “But the seller’s right will not be registered, the right of the new owner will be registered immediately.”
Ukrainian companies own a significant share of real estate on the peninsula, says Stanislav Ivashkevich, deputy director for hospitality industry development at CBRE. It is actively being bought, especially on the southern coast, he knows, where townhouses and apartments have risen in price by 1,5-2 times. Demand is high, as co-chairman of Business Russia Andrei Nazarov knows, but a moratorium has been imposed on transactions. The state register and clear registration rules will give the buyer additional guarantees, he believes.
Now the sale is formalized through a letter of intent or a power of attorney is issued to the buyer. In addition to problems with registration, there are others - bank payments and taxation of transactions are not debugged, he notes.
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