The procedure for purchasing municipal property from the city

The procedure for the first steps to purchase premises from the city

If the non-residential premises are owned by the city, and you decide to buy it, you need to obtain the appropriate Resolution of the municipal district and be prepared to register the property as your property on a paid basis.
First of all, you should submit a corresponding application on an official basis. The paper must be submitted to the balance holder of the municipal facility. Such forms are submitted to the Housing Policy Department.

List of documents for registering non-residential premises on the city’s balance sheet as your own:

Citizen's passport
Completed application to the housing policy department of the district municipality
Resolution of the relevant municipality
Cadastral extracts
Receipts

Instructions for purchasing premises from the municipality

The conditions for the purchase of municipal buildings/premises are determined by the norms of 159-FZ of December 21, 1996, Article 3 of the law states in particular:

Tenants acting in the form of individual entrepreneurs, commercial firms and cooperatives, and renting real estate from the city, have a preferential right to purchase it from the municipality.

It turns out that the Federal Law allows representatives of small and medium-sized businesses (hereinafter referred to as SMEs) to take initiative in this matter, although the legislator had not previously provided for such an opportunity. To get the opportunity to become the owner of premises rented from the city, a businessman had to wait for an appropriate proposal from the municipal authorities.

Fulfillment of the following conditions gives the right to preferences when registering city real estate as business property:

An application for the purchase of a lease right must contain comprehensive data that allows you to clearly identify your business as a SME (the criteria are set out in the Law “On the Development of SMEs in the Russian Federation” 209-FZ, approved on July 24, 2007).
At the time of submitting the application, the period during which you have already been a tenant of city property must be at least 2 years with continuous calculation or 5 years if the property is included in the list of the Federal Property Management Agency.
Your business cannot have any rent arrears on the day the municipality is ready to enter into an appropriate purchase and sale agreement with you, regardless of who initiates the transaction - you or the city.

We understand the benefits and shareware options for obtaining ownership of a city room

Okay, you found an investor, what next?

Just try and find an investor with a bathroom like this!

Census of all neighbors in a communal apartment

After finding a buyer, you need to make a list of neighbors. This list will need to indicate the period of residence of each person in the apartment (for example, someone has been living in a communal apartment since the day the house was built, and someone settled here a year ago), his social status and the possibility of being recognized as needing to improve his living conditions, the size occupied rooms and compliance with its provision standards. If any of the neighbors previously moved from their own apartment to a communal apartment, thereby worsening their living conditions, this is also indicated with the exact date of the official move. If more than five years have passed since that moment, then this will not affect anything. Otherwise, residents will lose benefits if they previously had the right to apply for improved housing conditions.

Why is the length of stay of people on the waiting list in communal apartments important?

The fact is that the court can refuse to buy out a room from the city to those owners who were not owners when the living space in question was actually and legally vacated. For example, a low-income family moved into this apartment six years ago, and the non-privatized room has been empty for six years. And after the death of the last responsible tenant, the city no longer moved anyone here. If those on the waiting list moved into the communal apartment later, they will be denied this housing on preferential terms.

A lawyer will save the situation

If the owners understand that they will not apply for a subsidy on their own, then they should hire a lawyer, because even the fact that a family of five people lives in a ten-meter room does not guarantee the provision of benefits. You will have to negotiate with the administration to speed up the process of reaching a deal. Otherwise, documents may be lost, and then your place in the queue. The lawyer will help you collect all the necessary papers and advise those on the waiting list on what to say when submitting an application, and will also refer you to the most loyal official so that the registration procedure does not drag on for several months or years.

In this case, the investor should help with money. It is he, by the way, who often turns out to be acquainted with officials at the district level and professional lawyers. Many investors do this professionally, but what did you think? The apartments are then sold at market value as a whole or rented out room by room; some actually buy the property for hostels.

Why do you need to have the purchase price of a room certified by a notary?

It is important that the cost of purchasing the room is documented and officially recorded. Otherwise, the price of housing may suddenly rise when the money has already been found. There have been precedents, so it is worth writing down the exact amount and having the document certified by a notary.

You can get the closet for free

If none of those living in a communal apartment can be recognized as low-income and in need of improved living conditions, then they will have to buy the room for its market value. But, if the area of the room is less than sanitary standards (in old apartments there are rooms of four square meters!), then you should try to turn it into a common room. After a positive decision by the administration and the court, its meters will be divided among all owners in the communal apartment.

Purchase of the right to lease premises in a simplified manner

Law 144-FZ amended the current provisions of the Federal Law “On the Peculiarities of Alienation of State/Municipal Real Estate” (159-FZ, approved on July 22, 2008). For example, he somewhat simplified the method of transferring rights to premises for representatives of SMEs through their purchase.

The main amendments allowed:

Eliminate the previous requirement regarding the limit of areas allowed for purchase by SMEs (previously, municipal legislation determined the area of real estate that could be purchased).
Change the rules for calculations for repurchase, allowing for the possibility of payment in installments (previously, installments were not provided, now you can repurchase within 5 years with the payment of interest at a rate of no more than 1/3 of the key rate of the Central Bank of the Russian Federation).
Allow the right to challenge in court the assessment of the market price of urban real estate for a buyout initiated by the municipality, if, in a reasonable opinion, such an assessment is too high.
Simplify the regulations for the exchange of documents, providing for the possibility of initiative on the part of the buyer - a representative of an SME; if the initiator is a municipality, your response to his proposal should be received within 1 month.

If an offer to buy city real estate was received by a representative of an SME from the municipality itself, then the potential buyer has 30 days to:

Sign a purchase and sale agreement for the property offered for purchase.
Issue a reasoned refusal of the offer.
Challenge the estimated value of the property in court.

If you file a lawsuit to challenge the city's assessment of a property you are interested in, the 30-day period for completing a purchase agreement for city property is suspended.

Rules for the purchase of city property by SMEs under 159-FZ

1. If you are a SME and have been renting premises owned by the city for 2 or more years continuously under a premises rental agreement/agreements, submit an application for redemption on your own initiative within the framework of the pre-emptive right (Article 3 159-FZ).

2. After submitting an application for the exercise of pre-emptive rights to purchase the property you are renting from the city, the municipality must give a reasoned response within 30 days and indicate the redemption price of the premises (please note: on the date of the conclusion of the contract you must be in the register of SMEs).

3. The flow of the one-month period will be suspended until the date when the court makes its decision, and it will enter into legal force if the potential purchaser of the city premises, an SME, decides to challenge the size of the market value of the acquired object.

4. You can challenge in court not only the amount of the assessment of the value of real estate for sale, assigned by the municipal authorities, but also the city’s refusal to sell the premises to a businessman from the register of SMEs who has been renting it continuously for 2 or more years, i.e. refusal to exercise the preemptive right (clause 8, subclause 1 of article 4 159-FZ).

5. You can pay for the redemption of city property as part of the exercise of your preemptive right in a lump sum or in installments (the right to choose is secured by clause 2 of Article 5 of the 159-FZ) at an interest rate of 1/3 of the key rate of the Central Bank of the Russian Federation on the date of publication of the official announcement of the sale.

6. The maximum limit for the installment plan period is finally approved by local legislation, but cannot be less than 5 years, while the buyer exercising his preferential rights must pay in equal payments once a month or quarter (clause 1 of Article 5 159-FZ).

7. Until the buyer of the premises from the municipality pays for it in full, the property will be pledged to the city, and if the DCP has established another condition, it will be declared void on the basis of clause 5 of Art. 5 159-FZ, in this case the buyer has the right to early payment for the purchase in installments.

Any transactions for the purchase of state or municipal property on a compensation basis, executed in violation of the requirements of 159-FZ, are void. If a SME has learned of a violation of its rights to preferential acquisition of the property it leases, it has 2 months to appeal the actions of the municipality.

How to register a sale?

The possibility of selling living space to government agencies will depend on whether there is a need to purchase real estate in the region. Information about current social programs is published on the official website of the municipality , as well as on a specialized electronic trading platform. In addition, municipal authorities will buy an apartment only if its characteristics meet the requirements.

Where to begin?

The entire process of selling real estate by an individual to the state begins with the seller contacting local authorities.
The seller writes a statement in which he indicates his desire to transfer the property on a reimbursable basis to the balance of the public housing stock. The consideration of such an application is carried out by the authorized body in the field of housing construction. The period for consideration of the application does not exceed 30 days. During this period, the applicant is sent a response from the government agency.

The state enters into real estate purchase and sale transactions with individuals based on the results of auctions.

In a written response, the apartment seller receives information about the planned auction and the conditions for signing the contract. The response received is not a guarantee that the transaction will take place. The city administration may not choose a specific apartment for purchase for various reasons.

Required documents

To sell an apartment by an individual, the municipality requires the same list of documents as in the case of a transaction between two individuals. So, the list of documents includes:

ID card of the owner of the living space (seller);
documents confirming ownership of real estate;
technical and cadastral passport of the apartment;
certificates from the tax service and other government bodies (housing and communal services, Rosreestr), confirming the absence of utility debts for the apartment and legal encumbrances for concluding a transaction;
appraiser's conclusion on the real market value of the property (if necessary);
notarized permission to sell from the second spouse, if the apartment was purchased during legal marriage;
permission to sell the guardianship and trusteeship authority if a minor child is registered in the apartment.

The collection of documents for sale is the responsibility of the apartment owner, and the contract for concluding the transaction is prepared by the administration.

Transaction procedure

The entire process of selling real estate to the state consists of the following stages:

The seller clarifies the requirements for real estate that the administration plans to purchase in accordance with social programs.
In accordance with the requirements, the owner of the property, if necessary, carries out preparatory repair work, since it will not be possible to sell the property in poor condition; the premises must be residential.
The seller determines the market value of the living space; if necessary, he can contact independent appraisers.
If the administration has submitted a suitable application for the purchase of real estate, the owner collects the documents necessary to conclude the transaction and submits his proposal to participate in the auction.
If the auction was successful and the administration chose the seller’s offer, the parties enter into a purchase and sale agreement.
The property is transferred to an authorized employee of municipal authorities by signing the appropriate act.
Contact Rosreestr to complete the transfer of ownership rights.
After the transaction is concluded, the seller receives the proceeds from the sale of the apartment into a bank account.

Nuances and features

The main difference between the sale of residential space to the state administration and a transaction between two individuals is participation in the auction.

This is due to the fact that there may be many offers to sell an apartment, and government agencies are obliged to choose the most profitable option. Selection can occur in several stages:

Electronic auction. The administration places an application on federal Internet platforms indicating the purpose of acquiring real estate and its cost.
If no proposals have been received from sellers for the initial application, then the administration holds a repeat auction at the federal level.
If applications are still not received, the next step is to contact the Federal Antimonopoly Service of the Russian Federation to obtain permission to organize a request for proposals.
The request for proposals is carried out in the form of submission of paper bids by bidders. It takes much longer than an electronic auction.

To become a participant in the auction, the seller must have an enhanced qualified electronic signature.

The procedure for selling real estate by an individual at auction includes the following processes:

Submission of documents. The apartment must fully comply with the requirements specified in the application, and there should be no problems with documentation. The auction participant must contribute a certain amount to secure the transaction (5-10% of the set price).
Participation in auctions. From the moment the seller submits an application until the start of the auction, about a week passes. At the end of the auction, the winner is given a corresponding protocol.
Inspection of the apartment by a commission. It is organized by the municipality and includes authorized employees who, during the inspection, establish compliance of the actual conditions in the apartment with state requirements. After it is completed, a contract is issued, to ensure compliance with the terms of which you need to pay a certain amount (about 5% of the value of the property).
If the parties agree to the terms of the contract, the document is signed using an electronic digital signature.
State registration of the rights of the new owner of real estate.
Transfer of funds to the seller’s account (transfer is carried out 1-2 weeks after state registration).

Funds are credited to the seller’s account guaranteed, since the transaction is concluded using funds from the budget, and all expenses from the budget are clearly planned. The money will be received in accordance with the terms specified in the contract.

Transitional provisions of the procedure for privatization of city property

If a subject of the Russian Federation has not approved by law the term of installment payments for the paid transfer of rights to city property, then the period is recognized as equal to 5 years. To realize the benefits, the applicant submits an application to the authorized body, which is obliged to:

Provide conditions for signing an agreement to assess the market price of the property.
Establish conditions for paid privatization through buyout.
Send the draft DCP to the applicant within 10 days from the date of acceptance of the conditions.

It is impossible to exercise the pre-emptive right if the applicant in fact does not meet all the requirements set out in Article 3 of Federal Law 159-FZ.

Who has the right to buy out the last room in a communal apartment?

Sometimes neighbors who want to purchase the last room face opposition from the municipality - the owner of the property, since according to the norms of housing legislation, the priority right to move into this property belongs to numerous categories of beneficiaries. These are low-income groups or families on the waiting list for improved living conditions. Also, municipalities have waiting lists for inexpensive housing, and if neighbors do not belong to any of the preferential categories, then their chances of acquiring this share are minimal.

Read more in the article: How to buy a room from the state in a communal apartment

Why should you contact us for the procedure for purchasing premises from the municipality?

Our company employs specialists who have extensive experience not only in the field of independent assessment, but also in challenging the value of premises when purchased from DGI.

1. The report on the assessment of municipal premises, compiled by our appraisers and checked for accuracy by the head and chief expert, is a serious document that has legal force. Based on this, you can challenge the inflated price proposed by the DGI and buy the premises at a price 40% lower than the original price.

2. Sometimes even a high-quality appraisal report does not guarantee that the tenant will be able to exercise the pre-emption right. We are talking about a situation where an entrepreneur did not have time to draw up a letter of claim on time and overstayed the 30 days given for concluding a purchase and sale agreement. The appraisal staff will not only provide a report, but will also help you quickly and correctly formulate claims and send them to the DGI, and if the Department does not agree with the proposed conditions, file a claim in arbitration court.

3. You can be 100% sure that the assessment results are reliable and objective, since the liability of our appraisers to the Customer is insured.

4. Prompt assessment of premises for purchase from the city. The procedure takes only 2-3 days after the Customer provides all the necessary documents and after inspecting the premises.

Federal Law “On Valuation Activities in the Russian Federation” (No. 135-FZ)

Federal Law “On the specifics of the alienation of real estate in state and municipal ownership” (No. 159-FZ) dated July 22, 2008

Federal Law “On State Cadastral Valuation” (No. 237-FZ) dated 07/03/2016

Federal assessment standard “General concepts of assessment, approaches to assessment and requirements for assessment” (FSO No. 1)

Federal Valuation Standard “Purpose of Valuation and Types of Value” (FSO No. 2)

Federal assessment standard “Requirements for an assessment report” (FSO No. 3)

Offer to buy a room from the municipality

In this case, the authorities offer residents to chip in and buy the premises, but not all of them have the money for such a purchase. And it’s difficult to get a mortgage without a down payment and an official income above 30-50 thousand rubles, even to buy out a room next door. What to do then?

Communal apartments still remain in city centers in low-rise and historic buildings. The houses themselves are rubbish; investors can only be attracted by the location.

Is it possible to get a room in a communal apartment for free?

If one neighbor is on a waiting list for housing and is listed as low-income, then he can try to get housing from the city for free. But sometimes the administration puts obstacles here too. For example, it gives a subsidy equal to half the cost of the object, and the family is forced to collect the missing part on its own. But what kind of savings and loans are we talking about if the residents are officially low-income? It is worth trying to contact the official directly who will endorse the transfer agreement with the city authorities in order to resolve this issue with him. This will allow:

get a room almost free of charge;
shorten the privatization period.

But you can’t get to such a person from the street. Here you need an acquaintance in the administration or a realtor who has been working in the desired area for a long time and has experience in conducting such transactions. Otherwise, the poor family will be sent to court, and the trial will take a long time. And one should not consider the trial a guarantee of a positive resolution of the issue! The court also has the right to refuse to receive a room.

Why you should contact us

Guarantee. Several cooperation options for your convenience. You pay only for the result! The liability of each of our appraisers is insured under an insurance contract.

Efficiency. By calling our company, you get in direct contact with a specialist. You don’t need to explain your problem several times and listen to ringtones on your phone endlessly. At any stage of interaction with the company - from the first call to specialists to the assessment - the Customer can count on a quick and effective solution to their issues.

Convenience. It is you who choose the day and time of inspection of the property being assessed. You don't need to reschedule any business. We will arrive when it is convenient for you.

Quality. In our company, each conclusion - assessment report - before printing, undergoes a two-stage check for compliance with the standards of expert activity - checked by a leading expert and the head of the organization.

Reputation. Why take my word for it? Look at the reviews from our Clients. Maybe your partner is among them?

Professionalism. We employ certified specialists who are members of a self-regulatory organization and have a license.

Good practice. More than 300 won cases.