Summary of "Изъятие неиспользуемых земельных участков. Новые правила игры. Сергей Спасеннов."

Summary: New Russian Land Confiscation Rules and Their Business Implications

Context & Overview

New Russian legislation, effective from March 1, 2025, allows government authorities to confiscate land plots that are unused or improperly used. This law applies broadly to all landowners, including large developers with land banks, individual owners, and heirs. The primary aim is to accelerate land development to address scarcity and underutilization.

Key Legal and Operational Frameworks

Administrative Proceedings Required: Confiscation must begin with formal administrative cases initiated by authorized bodies. Landowners must be notified and their rights protected throughout the process.
Authorized Supervisory Body: Rosreestr (Federal Service for State Registration, Cadastre, and Cartography) is the key supervisory authority empowered to monitor, fine, and confiscate unused land.
Development Deadlines:
- Land must be developed within 3 years after administrative proceedings start.
- A real estate object must be constructed within 5 years.
Unused Land Definition: Includes empty plots allocated for construction, polluted or littered land, plots with abandoned structures, or land where unauthorized tree growth occurs.

Processes and Mechanisms

Monitoring & Identification: Rosreestr and municipal land supervision agencies will conduct mass inventories to identify abandoned or unused plots.
Pilot Project Example: In the Altai Territory, 1,000 abandoned plots were identified as subject to confiscation, signaling a large-scale rollout.
Auction Sale: Confiscated land will be sold at auction, with original owners potentially receiving compensation at market value.
Neighbor Complaints: Residents can trigger confiscation processes by reporting neglected neighboring plots, incentivizing community enforcement.
Land Reclamation Strategy: Owners can prevent confiscation by demonstrating active land management, such as clearing debris, fencing, and maintenance—even without construction.

Business and Developer Implications

Long-term land holders and developers with undeveloped land face the risk of losing assets if unable to meet development timelines.
Simply transferring land within a group of companies to restart deadlines may be considered abuse by Rosreestr.
Bona fide external purchasers who begin development are favored under the new rules.
Increased fines and enforcement initiatives are anticipated.
In megacities like Moscow, integrated development projects (e.g., KRT — complex territory development) may be used strategically to comply with regulations or take over unused plots.

Actionable Recommendations

Landowners and developers should:

Regularly monitor land usage and compliance with development deadlines.
Engage in visible land maintenance to avoid classification as abandoned.
Consider selling unused plots to bona fide buyers if development resources are insufficient.
Track regulatory updates and judicial precedents as enforcement begins in 2025.
Explore strategic partnerships or integrated development projects to optimize land use and avoid confiscation.