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The procedure itself for the reserving of lands for state or municipal needs must be determined by the government (Item 4 of Article 70.1 of the RF LC), and so far it has not been regulated in legislative terms. The approved legal norms, in contrast to those formulated in the draft law, envisage lesser limitations of rights as a result of reserving; however, it seems unjustified to have introduced reserving for purposes of placement of capital construction objects. This has to do with the fact that, according to Director of the Federal Agency for Construction and Utilities S. Kruglik, the deficit of housing alone in Russia in 2006 was 1.6 billon sq m, while the construction rate amounted to 43.5 million sq m per year77. In order to provide solution to this problem, it is necessary to keep building millions of square meters of dwellings, in all the regions across the country, for several decades to come. If the solution is to be sought by means of seizure of the lands owned by persons, or granted to them for possession and use, this may become a mechanism for an administrative redistribution of the rights to land. Besides, the absence, in the law, of a mechanism for reserving has given rise to a high degree of vagueness in this sphere, which can be overcome only by consolidating, at the level of the RF Government, a coherent and transparent reserving procedure.

In June 2007, the period for presenting a suit for purchase of a land plot for state or municipal needs was extended from 2 to 3 years, to begin from the moment of sending to a land plots owner a notification concerning the adopted decision with regard to the seizure of land (Article 282 of the RF Civil Code (CC))78. By the same law, the RF Civil Code was augmented by a norm prohibiting for the possessor of a land plot being held by right of its inheritable possession for life, to dispose that land plot, except in the event of the rights being passed as an inheritance (Article 267 of the RF CC).

In addition to the specified grounds for seizure of land as such, the very notion of state and municipal needs has become a problem that may give rise to numerous violations. In actual practice, as, for example, stipulated in a regulation issued by the Moscow City Government, state and municipal needs can be recognized as follows: the need to prepare the blueprints for and the construction of a mountain ski park; the need to prepare the blueprints for and the constriction of a trade and entertainment center by a private person; and the creation of other objects recognized as necessary for the implementation of the state target pro Decree of the Government of Moscow On the interaction between bodies of executive authority of the City of Moscow in respect of issues relating to seizures of land plots, of 10 April 2007, No. 257-PP.

The deficit of housing in Russia at the present moment amounts to approximately 1.6 billon sq m // www.nevastroyka.ru, 13 March 2006.

Federal Law of 26 June 2007, No. 118-FZ, On introducing changes into legislative acts of the RF in the part of bringing them in conformity with the RF Land Code.

Section Institutional Problems grams adopted by the City of Moscow (Articles 4, 32 of the Law of the City of Moscow of May 2003, No. 27, On the Land Use and Urban Development in the City of Moscow.

Target programs have various goals, they can be adopted in any number and touch upon any rights and interests. The available sources cannot provide adequate information as to their exact total number. Consequently, due to the vagueness of the notion of state and municipal needs, it can be interpreted broadly, and so RF subjects may adopt by-laws specifying more grounds than envisaged in the Land Code. If can be reasonably anticipated that in the nearest future the list of municipal needs necessitating seizure of lands will become much longer, as result of bodies of local self-government having been granted the rights to conclude contracts on the development of a built-over territory.

In this connection, a precise definition of the notion of state and municipal needs, coupled with the abolition, in respect of seizure of land, of all the norms concerning other circumstances and other cases envisaged in federal laws, would be conducive to far lesser opportunities for officials to make arbitrary decisions in the domain of seizure of land, as well as better protection of the rights of owners, possessors and users of land.

5. 3. 2. Expansion of the Powers of State Bodies in the Domain of Land, in Absence of Efficient Mechanisms for Administrative Control The newly introduced procedure for reserving of land envisages that, from May onward, the rights to reserving land belong both to federal bodies of state authority and the bodies of state authority of RF subjects, as well as to bodies of local self-government (Articles 9 11 of the RF LC, in the wording approved by Federal Law of 10 May 2007, No. 69-FZ79).

In order to effectuate control over the activity of bodies of local self-government in the domain of seizure and reserving of land, federal authority has transferred to bodies of state authority of subjects of the Russian Federation the powers to control the compliance of bodies of local self-government with legislation on urban development (Item 1 of Article 6.1 of the RF Urban Development Code, in the wording approved by Federal Law of 18 December 2006, No. 232-FZ).

One of the mechanisms for controlling the activity of bodies of state authority and local self-government in this domain was to become, from 1 January 2008 onward, the responsibility to make decisions concerning seizures of land plots for state or municipal needs, as well as reserving of lands exclusively on the basis of territorial planning documentations approved by the RF Government (Item 4 of Article 9, and Article 11 of the RF Urban Development Code;

Article 3 of Federal Law of 29 December 2004). Nevertheless, the entry into force of this provision, which was to be effectuated in May 2007, has been delayed until the approval of territorial planning documents, but no later than until 1 January 2010. Until that moment, the temporary procedure for coordinating the draft boundaries of the zones for planned placement of capital construction objects of federal, regional or local importance, envisaged in Article 3.of Federal Law of 10 May 2007, No. 69-FZ80, is to be complied with.

Federal Law On introducing changes into individual acts of the RF in the part of establishing the procedure for reserving lands for state or municipal needs.

Federal Law On introducing changes into individual acts of the RF in the part of establishing the procedure for reserving lands for state or municipal needs.

RUSSIAN ECONOMY IN trends and outlooks Beginning from January 2007, the bodies of local self-government have been granted the right to make decisions concerning the development of a built-over territory, which can be initiated by a body of state authority of a subject of the Russian Federation, by a body of local self-government, or by a physical or juridical person on the basis of an urban development regulation, as well as local norms for urban development projects (Item 2 of Article 46.1 of the RF Urban Development Code), with the concluding of a contract concerning the development of a built-over territory with the winner in an open auction.

Due to absence of a specified notion of municipal needs, it can be stated with a high degree of probability that the land included in the contracts concerning the development of a built-over territory will, in fact, be seized, that is, the development of territories will actually be carried out by means of redistributing the existing rights of ownership, possession and use of land.

Besides, the State has attempted to transfer the rights of managing and disposing of federal lands (when they are not being used by citizens and juridical persons) to RF subjects, by means of incorporating such agricultural lands into the boundaries of inhabited localities for purposes of developing housing construction and building objects of social infrastructure81.

On the whole, this initiative should be estimated as positive; however, the period of one and a half years for executing such legal powers from 1 May 2007 to 1 November 2008 is, perhaps, acceptable for administrative purposes, but is clearly insufficient for implementing large-scale projects. The side effect of this innovation has been the implementation of those projects that require the clearing of neighboring land plots. Resulting has been the seizure of the land plots being used by private persons and situated along the boundaries of federal lands.

On the whole, the distribution of powers between state bodies of different levels in the domain of seizure of land, considering the fact that a considerable portion of lands are still not subdivided into those belonging to the federal level, the level of a RF subject, or the municipal level (which represents the grounds for the functioning of a given body), so far has not been adequate for efficient decision-making in respect of the States goals of ensuring lawful and justified seizure of land. This can be explained both by the vagueness of the definitions of those land objects in respect of which such powers must be executed and by the lack of efficient mechanisms for administrative and judicial control over the legal acts being adopted by the bodies of authority of RF subjects and municipal entities, which quite often contrary violate the lawful rights and interests of the owners and possessors of land plots.

5.3.3. The Problems Faced by Owners, Possessors and Users of Land when Receiving Compensation for a Seized Land Plot, as well as for the Losses Incurred as a Result of Seizure of Land Although the responsibility of the State to compensate in full for the losses resulting from the violation of rights of owners, possessors, users and leasers of land, including lost advantage, is consolidated by the Land Code (Item 1 of Article 62), and Article 63 the Land Code established guarantees of related rights in an event of seizure of land plots for state and Article 3.2 of Federal Law of 25 October 2007, No. 137-FZ (as amended on 1 December 2007) On the enactment of the RF Land Code.

Section Institutional Problems municipal needs82, in actual practice it is rather difficult to obtain the compensation for a seized land plot.

Quite often it happens so that the bodies of authority of RF subjects or municipal bodies of authority issue unlawful orders aimed at terminating the right of ownership, possession, or lease of land in an enforced procedure, in absence of the owners consent and without complying with the conditions stipulated in the law.

Thus, for example, in the city of Moscow a decision was made to terminate the lease contract in respect of a land plot with a leaser who owned the building situated on that land plot, in order to grant the rights to the land plot to another person who was going to design and build a trade and entertainment center there. In this connection, the order of the Moscow Government contained a stipulation concerning the demolition of immovable property without granting to its owner a preliminary compensation of an adequate size, in violation of Articles 235, 239 of the RF CC, and of Article 35 of the RF Constitution. The representatives of the bodies of state authority, in substantiation of this order, pointed to the absence, in the document, of any stipulations as to an uncompensated seizure of land, while saying that the disputed resolution regulates the preparation and making of the urban development documentation necessary for adopting the decision concerning construction, and points to the submission of the initial permitting documentation. In their opinion, from this it followed that no compliance with the requirements of the law in the part regulating the procedure for seizure of land was required. However, by decision of the Moscow Arbitration Court as of 20 February 2007 in respect of case No. -40-75225/06-152-373, the Moscow Governments order was deemed to be null and void, and this decision was left without alterations by the appellate and cassational instances.

In December 2007 in Moscow, the City Urban Development Code was once again approved in the first reading. The Code is designed to unify several dozens of the existing city laws. Repeated declarations had been made as to the imminent adoption of the Urban Development Code; however, the rapid changes in federal legislation and the problems associated with the need to coordinate regional interests were hindering the smooth passing of the document.

Another disguised method of seizure of a land plot, which is being applied in actual practice, is the issuance by municipal bodies of an order envisaging the termination of the right per se of permanent (or in perpetuity) use of a land plot. In this connection it often happens so that this issued legal act violates the compulsory procedure for terminating the right of use of land established by the RF Land Code( Article 45, 54). One example is the Decree of the FAC of the Far-Eastern Okrug of 6 November 2007 in respect of case No. F03-A51/071/4389.

Article 63 of the RF Land Code consolidates the following guarantees of the rights to land during the seizure of land plots for state or municipal needs:

- granting, prior to seizure (or purchase), in accordance with the desire of the persons from whom land plots are seized (including by purchase), of land plots of equal value;

- effectuation of seizure of land plot after compensation of the value of dwelling, production, and other buildings, structures, and installations situated on the land plots being seized, including lost advantage.

Besides, to the owner of a land plot being seized for state or municipal needs, together with these guarantees, the market value of that land plot must be compensated, unless a land plot of equal value was granted to him free of charge in ownership (Item 4 of Article 63 of the RF LC).

RUSSIAN ECONOMY IN trends and outlooks From February 2007 onward the losses incurred in connection with the issuance of an unlawful legal act in the domain of land relations are to be compensated not by the state body that had issued such an act, but by the RF Treasury (Article 61 of the RF LC, as amended by Federal Law No. 21-FZ of 28 February 2007).

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