The operation of improperly designed apartment complexes may be banned by court
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Moscow authorities have chosen a new tactic to combat apartment complexes created without permits on the basis of former industrial and administrative buildings. The mayor’s office is trying through the court to recognize the buildings as unfinished construction projects, which could lead to a ban on their operation and further dismantling. Such projects attract buyers with relatively low prices: the space in them is on average 20% cheaper than in apartments with the necessary documentation.
The Department of City Property (DGI) and the Moscow City Hall filed a claim with the City Arbitration Court to recognize three buildings (8.2 thousand sq. m) on Volnaya Street in the Sokolinaya Gora area as unfinished construction projects, and to prohibit the formation, promotion and sale of new ones in them premises. The defendant in the lawsuit, a copy of which Kommersant has, is LLC Dry Cleaning and Dyeing Factory No. 1 named after Kotovsky, which could not be promptly contacted. More than 300 individuals who purchased space in this facility appear as third parties. Partner of the law firm “Poverenny” Daniil Sinitsyn, representing the interests of 146 buyers, explained to Kommersant that industrial buildings built in 1967 were converted and sold in 2021–2023 to individuals, while Rosreestr registered their property rights.
Problems arose due to a discrepancy between the actual type of permitted use (AUR) of the land and the declared one: according to the authorities’ claim, only facilities for the provision of household services can be located on Volnaya Street. In fact, reconstruction took place here with the construction of new premises, the work was carried out without a construction permit, and operation is already underway without a permit to enter. Now the apartments on Volnaya, being used for living, pose a threat to life and health, follows from the lawsuit. The DGI explained that if the court recognizes the building as an unfinished construction project, it must be put into operation in the prescribed manner. The decision for each building will be made separately in the future. The State Real Estate Inspectorate added that work to identify and suppress violations, identify illegal reconstruction and unauthorized construction is carried out regularly. Managing Director of the Metrium company Ruslan Syrtsov explains that the site allowed for VRI apartments is a hotel site, but some developers save on changing the status of the site, maintaining the type of its permitted use for offices or production.
Recognizing the apartment complex on Volnaya as unfinished construction means a ban on its operation, this will also allow the mayor’s office to recognize the object as an unauthorized construction, says Mr. Sinitsyn. Partner at Rustam Kurmaev and Partners, Vasily Malinin, reminds that apartment owners may be deprived of their property if the developer goes bankrupt.
Daniil Sinitsyn says that the case with the apartments on Volnaya Street is one of dozens of lawsuits initiated by the Moscow City Hall. The lawyer also represents the interests of one owner in a similar case, according to a claim filed in the fall of 2023 against Projector Development LLC and Maxima Plaza for a project on Zolotorozhsky Val, 11, building 22. Here, the industrial complex was rebuilt into apartments, without going through all the approvals. The mayor’s office is also trying to recognize the object at the address: Degtyarny Lane, 2, building 6, in the Tverskoy district of Moscow, through the court, as an object of unfinished construction, follows from the court materials. A similar claim in the database of the Moscow Arbitration Court was filed against Grillburger LLC and the facility at Perevedenovsky Lane, 13, building 18, in the Basmanny District.
Partner at Melling, Voitishkin and Partners Maxim Kuznechenkov calls the recognition of apartment complexes as unfinished construction projects one of the scenarios for the authorities’ fight against unauthorized buildings. Senior lawyer at Tomashevskaya & Partners Yulia Kravchenko doubts that such violations are often committed by accident: “The developer cannot but know what he is going to do with the site.” The idea of carrying out reconstruction without completing all the documentation, according to her, usually arises with the understanding that it is impossible to obtain a building permit. The court will most likely agree with the mayor’s office’s arguments in the lawsuits: the demands are legal and justified, says atLegal partner Andrei Toryannikov. The consequence of this, according to Vegas Lex partner Igor Chumachenko, will likely be a requirement to demolish the objects or restore them to their condition before reconstruction begins.
According to Ruslan Syrtsov, developers began bringing apartments to the market in former industrial and office buildings ten years ago. He also includes modern buildings registered as business centers, but actually functioning as apartments, as similar objects. Taken together, such proposals, according to expert estimates, account for 5–7% of the total real estate supply in Moscow. The Best-Novostroy company adds that there are currently 28.8 thousand such lots offered on the market. Buyers are attracted by the lower cost of space in such facilities, notes West Wind Group CEO Konstantin Martynychev. He adds that the cost of premises in “gray” apartments is on average 20% lower than in projects for which all documentation has been received.
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