01.01.2023 — Starting From 2023 Parties to Real Estate Transactions Will Be Able to Use Model Contract Terms Prepared by Rosreestr

On 1 January 2023 the Law on State Registration of Real Estate was supplemented by provisions dealing with model contract terms for real estate transactions. Such model contract terms will be prepared by Rosreestr and subsequently posted on its official website. Parties will be able to use them on a voluntary basis when concluding real estate contracts.

Article 427 of the Russian Civil Code provides that a contract may incorporate published model terms developed for specific types of contracts.

It is common to incorporate model contract terms by reference in international commercial practice, such as by using the International Chamber of Commerce Model Contracts or the Incoterms. In Russia, however, non-profit organizations or state authorities rarely develop similar model terms of contract.

The new legislative amendments will reduce transaction costs in real estate deals. Over time, a new body of case law interpreting model contract terms will emerge, which will make real estate deals more predictable in practice. In addition, it is possible that model contract terms will be applied as trade usage in order to fill contractual gaps (Article 6 of the Russian Civil Code), even where the parties to a real estate deal have not expressly agreed on their application (see Federal Law No. 120-FZ dated 30 April 2021).