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14
August
2017

Igor Chumachenko on the air with Business FM: is the Russian Federation Accounts Chamber entitled to seek rent from the GUM mall in the absence of an agreement with the Federal Agency for State Property Management?

On August 10, 2017, Partner, Head of Real Estate, Land & Construction practice Igor Chumachenko made a comment for Business FM radio.

GUM has not paid its land rent in 2016. The federal budget failed to receive 268 million rubles. The Federal Agency for State Property Management did not sign a rental agreement with the country's biggest department store last year, Life wrote quoting the Russian Accounts Chamber, which audited the agency’s operation. According to the newspaper, the regulator plans to ensure that the rent is still paid.

The parties could have failed to remember that the rental agreement needs to be signed, but the Accounts Chamber still has the right to seek payment, Igor Chumachenko says:

“Formally, maybe, I'm sorry for this word, it could qualify as negligence. They signed a six hundred-something-million rental contract for the building. If the agreement does not include a proviso that the land rent shall be specified or determined separately, Kusnirovich can argue his position by the fact that, sorry, Article 654 of the Civil Code allows this. And therefore, it is the landlord’s will expressed in this way. Another thing is that, if the rent in this case differs significantly from the market rent without the land rent, then surely the authorities can challenge the validity of these contract terms in the interests of the state.”

“You mean the reason is human factor?”

“One can certainly say so, or maybe there were some agreements based on the previously established order of using the land and the building and the funds invested in it.” *

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* Source https://www.bfm.ru/news/361921.

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