Privatization - what it is and how it works

The essence and mechanism of privatization

Privatization of property is the process of transferring real estate from the original owner, represented by the state, to an individual - a citizen and members of his family.

Legal document for the procedure:

• social tenancy agreement for obtaining ownership of housing;
• a long-term lease agreement or an act of transferring land for indefinite use for the privatization of land plots.

The process of transferring real estate is carried out on a voluntary basis, the initiator is a resident citizen who has expressed a desire to register municipal real estate in his name. When privatizing an apartment, who is the owner depends on the number of persons involved in registering the transaction. If the transfer from the authorities passes to one individual, then the property after completion of the process will become his individual property, if to several participants, then each will own a certain share, and the real estate will become the object of shared ownership.

The right to privatization can only be exercised by citizens of Russia once in their lifetime with the consent of all registered residents, including minors who have reached the age of 14 years. After privatization, ownership rights are transferred in shares to all participants, with the exception of citizens who voluntarily renounce their due portion.

The implementation mechanism includes obtaining the consent of residents and submitting the following documents to the MFC:

• applications for the process;
• passports of residents and birth certificates of minor children;
• extracts from the Housing Office about the registered residents;
• certificates confirming early non-participation in the privatization of real estate;
• technical passport indicating the total area and cadastral value;
• agreement giving the right of residence or orders;
• consent of guardianship and trusteeship authorities with the participation of minors;
• notarized refusal of persons entitled to receive a share.

Thanks to the participation of the MFC in 2021, the process is extremely simplified, registration is carried out remotely to avoid queues, and photocopies of documents are made by specialists during a visit with simultaneous submission of documentation.

What is the difference between privatization and purchase of land

After privatization is completed, the owner of the property has the right to dispose of it at his own discretion.

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They can register everything for one person - it depends only on the will of the people living together.

Major repairs of common property in an apartment building are carried out at the expense of the owner of the housing stock; 3) payment for utilities."

This question worries people who are just planning to transfer ownership of an apartment or already have separate housing.

Assessing the need for privatization

• What is the right to use residential premises?

To make a decision in favor of privatization or against it is necessary to highlight the differences between a privatized apartment and a non-privatized one and determine how significant they are in each specific case.
Non-privatized housing is objects owned by state or municipal authorities, which transfer to residents, on the basis of a social tenancy agreement, the right to live without the possibility of performing legally significant actions. The difference between a privatized and non-privatized apartment according to a number of significant parameters is presented in the table:

The undeniable advantages of privatization lie in obtaining absolute ownership of a property practically free of charge, including only payment for government services. Among the disadvantages, one should highlight the increase in maintenance costs, including liability in the event of force majeure situations.

When weighing the pros and cons when making a decision, you should pay attention to the following factors:

1. Person status. For example, it is not advisable for a single pensioner with no relatives to take on additional financial expenses and service risks.
2. Condition of the property. The privatized property of a “dilapidated” object requires major repairs at the expense of its own sources, and an illiquid plot of land will cause difficulties in the sale, while the right to further participation in the privatization process will be lost due to use.

What is the difference between privatization and ownership?

What does a citizen need to privatize his home? What documents does he need to submit for it to become his property?

Since in each case it matters which plot is privatized and on what basis, the general list can be supplemented with documents, the list of which is provided by the registering authority.

Carrying out any transactions with an apartment that is jointly owned without determining shares is impossible without the written, notarized consent of all co-owners. This means that one of the owners does not have the right to sell, exchange, donate, bequeath, lease or lease this property, either in whole or in part.

This is important to know: Refusal of privatization in favor of another person

In order to understand whether privatization is needed or not, you need to understand how these concepts are different and what is better. First of all, you can never be evicted from a privatized apartment, even for debts on housing and communal services. You fully have the right to dispose of your property, and after that it will become so.

What is the difference between privatization and registration of ownership

According to the provisions of Federal Law dated December 29, 2004 N 189-FZ “On the implementation of the Housing Code of the Russian Federation,” free privatization of housing will be stopped from March 1, 2016. Despite the pressing deadlines, many citizens are still wondering whether they need privatization of their living space.

He and I have a new family. At first my husband said that social hiring is better and wants to abandon privatization.

Now let's look at this issue in the same way if your apartment or dacha is not privatized. Living in a municipal apartment under a social tenancy agreement, you will not be the owner, but the tenant, and the right to dispose of the apartment will be quite limited.

What is paid privatization?

In essence, paid privatization is the purchase of municipal real estate from the state for a certain amount of money. It is the need to purchase square meters that distinguishes paid re-registration from free. All other requirements, conditions and prohibitions for both processes are the same.

So, even for money you will not be able to privatize:

• rooms in an existing dormitory;
• emergency or dilapidated housing;
• real estate located on the territory of closed military cities (ZATO);
• office and departmental housing.

In 2021, you can privatize both residential and non-residential premises under municipal or state jurisdiction for a fee. Moreover, the procedure is available not only to ordinary citizens, but also to organizations and individual entrepreneurs.

In order to purchase premises at the cadastral price, businessmen need to enter into a lease agreement with the local administration for a period of 3 years or more. You can try to purchase some state real estate at special auctions, but not at cadastral value, but at market value, which is usually 10-15% higher.

Ordinary citizens also have the right to a paid re-registration, for example, if they have already taken part in a free one. By the way, the transfer of municipal property into private property for money is allowed an unlimited number of times.

There are usually no problems with obtaining permission for paid privatization. Such transactions are very beneficial to the state, because when they are carried out:

1. The number of economically active owners is increasing - non-residential real estate is used by businessmen as retail, office, warehouse and other types of commercial premises.
2. Responsibilities for maintaining the housing are transferred to the new owners.
3. The budget receives amounts of money equal to the cadastral or market value of square meters.
4. A new taxable object is registered.
5. Government programs related to providing housing for the country's population are being implemented.

If the apartment is state-owned, who can be its owner?

Owning a home means that you can take it and sell it, renovate it with redevelopment, mortgage it to the bank, etc. After privatization, all these “carrots” go to the new owner or owners.

All those who live in non-privatized housing are naturally concerned about the question of who owns such rights.

According to the law, the owners of this living space are:

• government bodies represented by various departments, committees, and other departments;
• local authorities (usually the administration).

If for some reason you have not yet managed to register the apartment in your name, it is important for you to know who exactly exercises the powers of the owner in relation to it. This determines where exactly you will have to go to conclude a contract for the transfer of housing.

Is it possible to legally deprive an owner of his share in an apartment? The answer is in this video:

So, before privatization, all rights to housing belong to the state or municipality. But after it, the citizen living in it and his family become the full owner of the living space. How many people have concluded a privatization agreement - that is how many owners the apartment has. Each family has different relationships, but it is necessary to decide together how exactly to formalize it (for everyone or not). If someone in your family decides not to participate in privatization, make sure that they fully understand what step they are taking. This will avoid further resentment and dissatisfaction regarding this matter. Family is the most precious thing we have, so don’t let material squabbles destroy your relationships with your loved ones.

This is important to know: When does the privatization of apartments in Russia end?

Read how shares in a privatized apartment are divided in this article.

For additional information on this issue, please see the “Privatization” section here.

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Attention! Due to recent changes in legislation, the legal information in this article may be out of date!

Is it necessary to register land ownership?

Common shared and common joint property have the same nature: they both imply a plurality of owners of the same property.

Only through privatization can a citizen legally become the full owner of a house or apartment. And no one will constrain him in his ability to manage his own housing. What conclusion can be drawn from such a difficult situation to resolve?

Volume. Registration of ownership is a broader concept than privatization, which includes, among other things, the purchase of real estate, its acceptance as a gift and inheritance, barter, and more.

Obtaining ownership rights is a very significant plus in the direction of housing privatization. If you have accumulated huge debts for utilities, then it is almost impossible to evict you from a privatized apartment, which cannot be said about a non-privatized apartment.

This is important to know: Privatization of a plot in SNT in 2021

Privatization and re-privatization - is there any meaning and benefit?

After the privatization process is completed, the owner can use the property at his own discretion: donate, exchange, sell, alienate free of charge. Privatized means it previously belonged to the state or municipality, and not to some swindler.

If the boundaries of the plot are known, it has been properly registered with the cadastral register, you have a cadastral passport and an extract from the Unified State Register, you can contact the municipality for a decision to allocate the specified plot of land to the applicant free of charge.

At the same time, hundreds of thousands of apartments remain state property. And hundreds of thousands of tenants living in them have probably thought about privatization more than once.

Additional costs for privatization

So we discussed the minimum costs. What are the maximum? It all depends on the specific circumstances. The following additional costs may apply;

• Before privatization, all rent arrears must be paid. If there are any, add them to mandatory expenses.
• It is possible that there are unapproved redevelopments in your apartment (for the last 30 years this has not been closely monitored, and inspections have not been carried out, as happened in Soviet times). They will need to either be liquidated or agreed upon retroactively with the BTI. The cost of approval can be several tens of thousands. If violations are discovered, then in accordance with Article No. 7.21 of the Code of Administrative Offences, a fine may be imposed (1000-2500 rubles). In any case, the presence of redevelopment will slightly increase the cost of free privatization
• When several people are registered in an apartment, each of them has the right to a share in the privatized apartment. That is, everyone should participate in privatization. But there are options here. Those who do not have time can issue a notarized power of attorney for another family member or a stranger (100-1000 rubles depending on the region and the notary).
• You can also register an apartment as the property of only one family member. This is recommended if the apartment is privatized for the purpose of further sale. One owner means that the sale procedure will become easier and will cost the seller less. In this case, everyone else must write a notarized waiver of their share in his favor. Which will cost everyone 1000-2000 rubles. Just keep in mind that if there are children in the apartment, this number will not work. Minors are required to receive their share in a privatized apartment if they are registered there.
• Obtaining some documents requires either a few days of waiting or an additional payment for urgency. The need to obtain a certificate immediately turns free documents into paid ones, and makes paid ones twice or five times more expensive. In this case, the expression “time is money” has a literal meaning. If time is more important to you, costs will increase
• It is also possible that no one in the family is eager or has the free time to deal with all the bureaucratic procedures on their own. But at the same time, privatization is necessary, and I would like it not to drag on for months. In this case, you can resort to the help of outsiders or special agencies. Both will have to pay for their efforts. How many? We will discuss this in more detail in the next section.