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Land rebus: The Supreme Court allowed changing the purpose of private plots under new general plans
The Supreme Court of the Russian Federation has issued a decision that could affect the interests of millions of landowners across the country. The court confirmed that when approving the new master plan, municipalities are not required to maintain the same type of permitted use of land, even if business is already underway or facilities have been built on them. This decision caused a wide response among lawyers, entrepreneurs and ordinary citizens. Izvestia has collected comments from leading experts on this issue.
Why did the Supreme Court support the changes to the master plan
The case in which the owner challenged the transfer of his plots from the commercial zone to the landscaping zone turned out to be in the center of attention. Previously, shops and offices could be built on these lands, but according to the new general plan and land use rules, their status suddenly changed. The court of first instance dismissed the claim, the appeal and cassation supported the owner, but the Supreme Court overturned these decisions and sided with the municipality (the document is available to Izvestia).
In the case in question, the site was located near horticultural associations and a major transport highway, which made the need for noise insulation urgent. The urban development plan of the city provided for the expansion of green areas, so changing the purpose of the land in favor of landscaping was considered justified.
The Supreme Court noted that the authorities are not obliged to maintain the previous type of use of the site if it contradicts the approved development strategy of the territory. The legislation does not provide guarantees for the preservation of the original status of the land, even if the land is already being used for business purposes.
Nikolai Kichigin, Head of the Department of Agrarian, Environmental and Natural Resource Legislation at the Institute of Legislation and Comparative Law under the Government of the Russian Federation (NII IZiSP), notes that "the cassation ruling of the Judicial Board for Administrative Cases of the Supreme Court of the Russian Federation No. 18-KAD24-71-K4 does not revolutionize law enforcement practice and is based on the provisions of Parts 8, 9, 10 of the Article 36 of the Urban Planning Code (GrK RF), which have been in force since the end of 2004."
"At the same time, the dispute that is resolved in the said judicial act may potentially affect every land user if his land plot is subject to the urban planning regulations," an expert from ISP told Izvestia.
He adds that the legal consequence of the zoning change is the impossibility of new construction or reconstruction on the site if it does not comply with urban planning regulations.
— As a result of the rezoning of the territory in the general plan of the municipality and in the rules of land use and development, the subsequent use of the land and real estate can be carried out in accordance with the actual use without limiting the duration of such use, that is, indefinitely, — Kichigin emphasizes.
However, he continues, the owner of the land plot and the immovable property located on it will not be able to carry out new construction or reconstruction in the future, as well as change the type of permitted use of the land plot, except for bringing it into line with the types established in the urban planning regulations.
Restrictions for owners: what is allowed and what is not allowed
Maria Gavrilyuk, Acting Head of the Department of Land and Environmental Law at the State University of Land Management (GUZ), comments on the question of how serious the consequences for citizens and businesses can be.
"The legal regime of land plots was changed not by the general plan, but by the rules of land use and development, and in particular by the urban planning regulations," she says. "Here we must proceed from two conditions: firstly, the priority of public interests over private ones, and secondly, the preservation of private ownership rights to land plots.
She adds that no one forbids the copyright holder to use his land for its intended purpose. The restrictions apply only to new construction, reconstruction, or changes in the type of permitted use (with the exception of those that comply with the rules of land use and development).
The GUZ expert points out that it is not illegal for the rules of land use and development to be inconsistent with the interests of individual copyright holders.
"The Supreme Court has repeatedly pointed out that during urban planning zoning, the rights of land owners and capital construction facilities may be restricted," she notes. — And this is not a new judicial practice, when courts refuse to recognize the rules of land use and development as invalid only on the grounds that they do not correspond to the existing type of permitted use of land.
Financial and legal risks for owners
A change in the status of the site may entail not only legal, but also significant financial consequences. Lawyer Alexander Zelinko, a member of the Moscow branch of the Russian Bar Association, warns about this.
— Firstly, there is a risk of loss of the right of use and financial losses. A citizen or entrepreneur who has bought a plot for a shop, workshop or apartment building may suddenly lose the right to use it for these purposes if the new master plan assigns the land to a zone of landscaping, public spaces or other purpose. The building may become "illegal," the expert states.
He also draws attention to the fact that the land, deprived of a valuable type of permitted use, sharply loses its market value.
— Investments in construction or business development may be lost, — says the lawyer. — The owner may be prohibited from conducting current activities on the site (for example, trade or production). It may require expensive demolition of existing buildings or their conversion, which is often economically impractical for an individual or entrepreneur.
In addition, the specialist adds, a change in the type of permitted use may lead to a change in the cadastral value and, accordingly, an increase in property tax or land tax, even if it is impossible or unprofitable to use the site for a new purpose.
For small and medium-sized businesses, this can mean termination of operations, dismissal of employees, and even bankruptcy, he notes.
— The decision of the Supreme Court of the Russian Federation makes the position of land owners less secure. The lack of "inviolability" of the type of permitted use means a constant risk of losing the opportunity to use the land for its intended purpose and significant financial losses," concludes Alexander Zelinko.
How to protect your rights
Coordinating changes to the type of permitted use requires significant resources. Nikolay Kichigin notes that the procedure for making changes to the general plan of a municipality and to the rules of land use and development is regulated in the Urban Planning Code. It is complex, lengthy and requires financial expenses for the development of the necessary documentation.
He advises owners to apply to the local administration for a permit for a conditionally permitted type of use or permission to deviate from the maximum construction parameters.
— The owner of a land plot and capital construction facilities may demand compensation (losses) for the restriction of rights to a land plot or the purchase of his land plot, — notes Maria Gavrilyuk. — Here it will be necessary to assess how much the market value of this land plot has fallen due to the restriction of rights to new buildings and reconstruction of capital construction facilities."
Vitaliya Merkulova, a member of the Federal Chamber of Lawyers (FPA RF), head of the real estate and construction practice at Yust, notes that an alternative way to defend the interests of individuals in this situation is to initiate changes to the approved documents of territorial planning and urban zoning by the interested party (Part 16 of Article 24, paragraph 5 of Part 3 of Article 33 of the Civil Code of the Russian Federation)..
"However, it must be borne in mind that the proposal to make appropriate changes is a right, and not an unconditional obligation of the authorized bodies to make a decision on making such changes," she emphasizes. — In this regard, a competent justification of the proposed changes is essential, as they take into account not only private, but also public interest.
Marina Butylina, head of the Department of Land Management and Cadastre at Moscow University of Finance and Law, adds that if the land plot was used in accordance with the Rules of Land Use and Development for a certain period of time, then the new Master Plan should not disrupt the land use process. And, in this case, the rights of the owners would have been fully respected, she notes.
She cites an analogy provided for in the law: in case of clarifying the boundaries of a previously registered land plot, we are not obliged to adhere to the area regulations, since the plot existed earlier and information is entered into the Unified State Register of Legal Entities upon the fact. In practice, this works and it can be considered that it is correct.
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