Acquisition and renting of lands for individual construction in the Russian Federation

Investments in Russian real estate, in particular, in the land are gaining more and more popularity. The investors acquire the land plots, among other things for individual construction. 

 
State-owned land plots may be acquired for individual housing construction (IHC) by participating in the auctions. For this purpose a respective application is filed at a local or state authority, which should be considered within two weeks. In case of filed application for sale or lease of land plot an auction is conducted between the applicants for purchase and rent. If upon expiry of one month from search commencement no applications for land sale are received, a decision is made on leasing a land plot from the state reserves.   

It is recognized that the lease contract is signed for a fixed period (as a rule, from one to three years) with mandatory condition to build a residential house within the contract period. In case of violation of this condition the extension of lease contract may be rejected, and the plot will be put up for tender again.  

Upon purchase of land plot for IHC at the secondary market the purchase-sale contract will be legally valid if the plot has passed cadastral registration. The Russian law allows foreign nationals to acquire land plots for IHC in any quantities throughout the country (except for near border areas the list whereof is approved by the RF government).  

As a rule, specialized organizations are engaged for preparation and verification of documents required for land plot purchase-sale transactions, because a private investor will face difficulties trying all by himself to assess the possible risks and acquire the real property he is interested in.

Rather often IHC facilitates a wide choice of compromise options, from which one manages to find a plot and a house with the infrastructure and surroundings to his satisfaction.