abolish the rent of conditional land shares. In this “The trustee manager cannot be a beneficiary under case the agricultural land transfer will be hindered the trustee property management agreement” (Part as well: large tenants will have to rent dispersed 3, Clause 1015 of the Civil Code). In case of physical plots and bear substantial costs on their renting a land share the tenant uses property to his consolidation. Owners of land shares unwilling to benefit, i.e. is a beneficiary paying for this sell but ready to rent them out will be discouraged: opportunity to the owner. In other words, tenancy after the contract on renting out a conditional share and trustee management are radically different is discontinued, the shareholder can parcel out a institutes. The substitution of trustee management plot that is suitably located while in case of agreement for the tenancy agreement will mean that discontinued rent of a physical plot the owner may the former tenant can no longer get profit from find his land to be right in the middle of large using the land acquired in the form of renting land tenant's plantations. Given that a shareholder will shares and has to pay all the revenue derived rather prefer to rent his share to mother farm since therefrom to the owner.
in case of detaching from it the problem won't arise. 2. “The term of trustee property management Besides, the abolition of conditional share agreement is not to exceed 5 years. The law can renting entails cut of investments in agriculture that specify other maximum contract terms for selected at present are made primarily by external investors. types of property.
In such a case a potential investor will have two In case none of the parties to the agreement options to get access to land: notifies of the wish to terminate it after the - purchase of land shares or a physical plot (from expiration of its term, the agreement is considered a collective owner); to be extended for the same period and on the same - rent of a land plot from collective owner. terms that were initially specified therein” (Part 2, In both cases investor’s expenditures on getting Clause 1016 of the Civil Code). The draft access to land resource grow. It’s clear that the government bill on agricultural land transferability costs of purchasing land will be higher than those does not clearly specify that the term of land share of renting it. Moreover, the latter will grow as well: trustee management agreement can be longer. Thus the term of land share renting under the formerly this property. In case its value is not sufficient, the signed agreements is limited to 5 years while it’s a claim can be laid to the trustee manager’s property common notion that land rent makes sense only and in case it’s not sufficient either - to the property when its term is at least 6-8 years. of management authorizer that is not transferred to 3. “All settlements connected with trustee trustee management” (Part 3, Clause 1022 of the management are to be made through a separate Civil Code). In other words, in case a tenant got banking account” (Part 1, Clause 1018 of the Civil into debts after renting a land share, the latter can Code). This means that all companies and be used for settling them. Moreover, other property individual farmers currently renting land shares will of land share owner can also be taken away as a have to open separate banking accounts for recovery.
transactions with output produced on land being a The above mentioned provisions will entail the subject of trustee management agreements. cancellation of major part of existing tenancy 4. “The trustee manager who failed to take a agreements. The signing of new ones is a long and proper care of beneficiary’s or management costly process and therefore the enactment of the authorizer’s interests, reimburses the beneficiary new law will hinder agrarian sector’s development for the profit lost during the trustee management for several years. It will actually mean a one more agreement’s term and pays to the management farm restructuring, the effect of which will be authorizer indemnity for the loss or damage to the comparable to the 1992-1994 reform.
property (other than normal wear) and for the lost The second reason making this novelty of the profit” (Part 1, Clause 1022 of the Civil Code). This government bill unacceptable from our point of provision can be interpreted in such a way that in view is the lack of provisions regulating the signing case within the agreement’s term it becomes clear of agreements on trustee management of titles in that if the property was managed (in other words, the share land ownership. The bill doesn’t give an rented) by another person it would bring higher answer to one of the basic questions: can such an revenue, the difference is to be reimbursed to the agreement be signed by one co-owner without owner at the expense of trustee manager. In terms consent of the others One cannot figure it out from of the rent this means that if within the tenancy the Civil Code’s clauses relating to trustee term the share owner finds out that somebody pays management. Meanwhile, such a right is very higher rent, the tenant will have to reimburse the important for land share tenancy.
difference since it is a pure lost profit. Another case In view of the above we find that the bill is possible as well: before the agreement expires the introduced by the government doesn’t provide for share owner gets to know that yields in the preserving the existing mechanism of land share neighbour farm are higher and thus his profit can be tenancy. If adopted, it will not only hinder land treated as partially lost. In both cases the trustee transfer in Russian agriculture but will impede the management agreement becomes detrimental for positive developments that have shown up in the the party currently renting land shares. sector in recent years.
E.Serova 5. “Debts under liabilities arising from the trustee property management are settled at the expense of
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