Warning: realty encumbered by rent!

Alfiya Dausheva, Senior Lawyer of the Law Firm "YUST"

Pursuant to Article 1 of the Federal Law No. 122-FZ “On state registration of titles to immovable property and transactions with it” dated 21.07.1997 (hereinafter – the Immovable Property Titles Registration Law), mortgage, lease, rent, trust management and other circumstances, which hamper the execution by the title holder of his property title or other proprietary interest to a certain immovable property object are considered limitations (encumbrances) over the immovable property object.

It should be pointed out that the act of making the entry of encumbrance (limitation) is an act of state registration of a title, while cancellation of an encumbrance entry is not. Provisions of the Immovable Property Titles Registration Law don’t stipulate any procedure for cancellation of an entry of encumbrance over an immovable property object, only for cancellation of an entry on mortgage.

Taking into account said circumstance, it would appear that only the enacted respective judgment by a court may be the only basis for cancellation of any encumbrance entry (excluding mortgage). However, not even the existing judgment, pursuant to which the encumbrance entry was to be cancelled, may exclude the risk of contestation of the registration authority actions for the reason of absence of duly established procedure for cancellation of encumbrance entries.

It appears that the gap should be filled by introducing the respective changes to the Immovable Property Titles Registration Law, by elaborating and adopting of the Rosreestr instruction on cancellation of entries on encumbrance (limitation) over immovable property objects.

Source of the publication – “Legal work in a credit organization” magazine, No. 2, 2013.