Foreign Buyers to Face Less Red Tape Chaos

Source: The Moscow Times
Issue date: 17.07.2007
Author: Max Delany
Title: Foreign Buyers to Face Less Red Tape Chaos

The trial that foreigners have to go through to register property in Russia was made a little less burdensome last week after officials moved to systematize the process across the country. The Federal Agency for Registering Real Estate introduced a uniform list for local authorities outlining the documents that need to be produced by foreigners wishing to register real estate deals. Previously, foreigners wanting to register property purchases faced a barrage of varying demands and uncertainty, dependant on where the property was being registered.

"Now the documents that are required will be the same in Vladivostok as in Kaliningrad," said Sergei Yeremin, deputy director of the real estate registration agency, Rossiiskaya Gazeta reported Wednesday.

Foreign citizens looking to register property will now have to present their passport and prove that they are legally entitled to be in the country, meaning they will have to provide registered visas, migration cards and residency permits. The document produced by the agency reaffirms the rights of foreigners to buy property in Russia but keeps in place the pre-existing caveat that they may not own agricultural land or land near international borders and special zones. These can only be rented. The new recommendations have been drawn up according to international legal norms, Yeremin said.

The new system will also serve to ensure that all people buying property in the country have the legal right to be in Russia, he said. Igor Yeliseyev, an associate at legal firm Hogan & Hartson, hailed the recommendations as a "significant step" in clarifying the registration aspects of such real estate deals and a move to cut down on potential "territorial misuse."

"However, it is worth pointing out that a lot of important issues connected with registration ... are not regulated in the recommendations," Yeliseyev said in e-mailed answers.

Although the moves would remove some of the uncertainty surrounding the process, Knight Frank's director of residential property Yekaterina Thain said they would not make the registration procedure any simpler.

"It is good that they are making the standards the same for everyone, but it does not change it," Thain said. "Generally it is not too difficult for foreigners to register property in Russia and people do it through an agency." There are no existing statistics for the number of foreign property owners in Russia, but the trend has undoubtedly increased over the past few years. But the recent regulatory changes are unlikely to have a dramatic impact.

"Foreigners have been buying property in Russia for quite some time, and I don't think that this will cause that many more people to buy property here. It will not affect the market that much," Thain said.

Due to perceived registration difficulties, foreigners have previously opted to register property under the name of Russian acquaintances, Yeremin said. This has often left foreign property owners in a precarious legal limbo. The changes are targeted as much at people from the Commonwealth of Independent States as at people from the West, Thain said.