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Feds Make Real Estate Auction Rules
The government intends to impose controls on the modernization and reconstruction by private investors of federal real estate managed by federal state unitary enterprises and the subsequent privatization of those properties. Russian Prime Minister Mikhail Fradkov signed a resolution last week requiring that any transaction with federal real estate worth more than 150 million rubles be competitive and subject to the approval of the government. Capital investments over 500 million rubles in federal real estate will also require the government's permission.
Valery Kirilenko, head of the economics and programs division of the Ministry of Economic Development and Trade department of property and land relations, told Kommersant that the lack of the procedures just created had led to violations of the state's property rights and numerous lawsuits. Valery Nazarov, chairman of Rosimushchestvo, the federal property management agency, stated last month that “the practice of seizing federal property in Russia without the state's knowledge has taken on a mass character.” About 8000 such incidents were recorded in 2006.
The resolution applies theoretically to all federal real estate, even the Kremlin. Developers say, however, that the resolution contains nothing new for Moscow. It is most applicable in the regions, where regional authorities are already drafting similar bills. Developers also note that the successful application of the new rules will depend on the results of the first auctions. If a wide circle of companies have access to them, interest in them will increase.
www.kommersant.com
All the Article in Russian as of Aug. 20, 2007
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