How to privatize property for SMEs?

Privatization of real property by small and medium-sized enterprises

Приватизация

Officially the service is defined as alienation for compensation of real property rented by small and medium-sized businesses from the public property of Moscow. 

Small and medium-sized businesses upon alienation of real property for compensation from the public property of Moscow shall use pre-emption right to purchase such property at the price equal to its market value and fixed by an independent valuer.

Pre-emption right may be exercised provided that:

  1. Property rented by SMEs had been temporarily owned or used by the same on an ongoing basis for two or more years by July 1, 2013.
  2. There is no indebtedness related to rental payments for such property, penalty fees (fines, overdue interest) as of the date of application to exercise pre-emption right to purchase the rented property. One may check indebtedness status on the web-site of Moscow Urban Property Department.
  3. The rented property was not included in the approved list of public property or municipal property meant to be transferred for possession and (or) use by SMEs. One may check inclusion in the list of such real property on the web-site of Moscow Urban Property Department.

The services are provided free of charge.

Application for the provision of public services is filed and the results are submitted using “one-stop-shop” principle of the Moscow Urban Property Department at the address: 20 Bakhrushina st., Moscow.

Pursuant to administrative regulations the entire term for the provision of a public service cannot exceed 30 working days excluding any delays.

Grounds to suspend public services are:

  • preparation of technical records,
  • ensuring entering of data on real estate item into the State Property Cadastre and the Unified State Register of Rights,
  • execution by the applicant of the contract for sale of real property,
  • payment by the applicant of cash funds in the amount specified in the contract for sale of real property,
  • preparation of a legal act of the Moscow City Government (in case of privatization of real property with the area exceeding 1,000 sq. metres),
  • suspension of the state registration of right to real property.

The duration of each suspension period cannot exceed 30 days.

The list of documents required for the provision of public service is represented on the portal of public and municipal services (functions) of Moscow.

The result of the provision of public service shall be:

  • contract for sale of purchased real property,
  • resolution of the Moscow Urban Property Department on the terms of real property privatization (in case the area of real property is less than 1,000 sq. m.),
  • legal act of the Moscow City Government concerning privatization of real property rented by an SME (in case the area of real property exceeds 1,000 sq. m.).

Payment of the cost of real property purchased by SMEs upon exercise of their pre-emption right to purchase rented property shall be effected as a lump-sum payment or by equal monthly or quarterly installments. The term of the installment plan for purchase by an SME of such property upon exercise of its pre-emption right to purchase rented property shall be determined by the law of constituent entity of the Russian Federation, but shall be at least three years.