01.02.2023 — Public Penalties for Lack of Commissioning Permit May Be Imposed Even if Ownership Title Was Already Registered

In one recent case considered by the Supreme Court, the company built an attic on the roof of its building and immediately started to use the building. The company, however, failed to obtain a commissioning permit after it had completed its alteration as required by law. As a result, the company was ordered to pay a public penalty of 500 thousand rubles. The company sought to challenge that penalty because its ownership title to the building was registered without any issues and because a different court had previously refused to find the attic to be an unauthorized construction. However, these arguments did not convince the court, which supported the supervisory authority’s position and affirmed the public penalty.

In the recent case, the company built an additional structure on the roof of its building, which was legally considered to be part of a condominium unit the title to which was registered in the Unified State Register of Real Estate. The Construction Supervision Authority of Moscow found that the company breached Article 55(1,2) of the Russian Town-Planning Code because it started to use a building after it was structurally altered without first obtaining a commissioning permit. The company was thus subjected to a public fine.

Simultaneously, a different authority requested a Russian court to declare that the additional structure is an unauthorized construction. The owner of the building prevailed in this dispute because it was able to prove that the additional structure was consistent with construction regulations and did not endanger the public safety.

The owner then also challenged the public fine that it was ordered to pay. However, courts of three instances held different views in the case. A decisive end was put by the Supreme Court, which rejected the owner’s argument about the existence of a registered title to a real estate object and the already held court decision refusing to declare the structure to be an unauthorized construction. Neither of those things are a proper substitute for a commissioning permit that was required by law. The Supreme Court thus confirmed that the company had to pay a public fine as required by the construction supervision authority (see Ruling of the Supreme Court of the Russian Federation dated 01 February 2023 No. 305-ES22-18488 on case No. A40-103770/2021).