A Single Real Estate Complex as an Object of Civil Rights

A Single Real Estate Complex as an Object of Civil Rights

The concept of a “single real estate complex” was included in the Civil Code of the Russian Federation in 2013, but has not yet become widespread in practice due to issues related to the procedure for registration, sale, taxation and foreclosure on it. We will call it - REC.

You can read the REC definition in the Code on your own. In other words, it is a complex of objects that together perform one function. REC is usually understood as a complex of various objects (buildings and constructions, other things), which are inextricably linked physically or technologically. These may include shopping centers, entertainment complexes, administrative and business centers.

Unlike an enterprise, REC does not include land plots, exclusive rights, property rights and obligations. But both movable and immovable things can enter. However, it is important to know that the rules on indivisible things apply to REC, which means that it will be impossible to sell part of the complex - only in its entirety. The title of ownership for REC is registered accordingly - one for the entire complex. You can also make the REC subject to a mortgage. From the point of view of taxes, REC is taxed as the property of organizations.

The complexity of the application of this legal institution lies in the controversy of the criteria for defining objects as a single complex. The existing definition of REC creates a legal fiction that endows the REC with a trait that in fact it does not possess – indivisibility, and establishes the only condition for the REC to be established - the will of the owner registered in the EGRN, which still causes debate in judicial practice and among experts.

Nevertheless, the legislation is gradually being improved and a single real estate complex can become a useful tool that will simplify the registration procedure for the owner and increase the efficiency of property management.

If you have any questions, make sure to contact TEAM for professional expert advice.

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