The dispute was about the agricultural land parcel for haymaking. In 2017, after the farmer Pavel Shaport’s application the parcel was set for an auction to sell the renting rights. The bidding sum for rent was raised to over 20 million rubles of rent a year and the winner was Mr. Vasiliy Klyachin. However, this citizen did not sign the lease contract in time, so Mr. Shaport obtained the right to do it. Paying attention to the unreasonable rent amount, Mr. Shaport chose not to sign the contract either.
After the term for lease contract signing had expired, Mr. Shaport reapplied to the Committee for the Management of Municipal Property of Kemerovo District for a new period of lease for the same ground parcel but received a negative reply stating that the land had been transferred to another person for fixed-term use without consideration, that is, for free.
The farmer Pavel Shaport decided to consult the Bar Association “Jurproject” for the protection of his rights.
It was found that the matter of transferring the ground parcel was solved within 3 working days (!) in favour of one of the participants of the auction – Vasiliy Suvorov. He applied for leasing him the parcel without auction just the day following the expiration date of Pavel Shaport’s contract.
Analyzing the situation in terms of law, we proceeded from the assumption that following the entrepreneur Suvorov’s application the Committee for the Management of Municipal Property of Kemerovo District pursuant to the law was to publish the notification for all the interested parties about the possibility to obtain the ground parcel for the intended agricultural use. Moreover, the Committee, which is supposed to be interested in collecting the maximum possible amount of taxes to the budget originating from rent or income from selling the parcel, was to arrange auctions to sell the parcel or to make leasing agreement it instead of transferring it unconsidered.
However, the Committee for the Management of Municipal Property failed to publish any notification and signed the agreement on the use of ground parcel without consideration with Mr. Suvorov for 6 years within 3 days after the application.
The benefits of obtaining land this way are obvious: first of all, a recipient uses land for free simultaneously receiving income from the deal; secondly, 5 years later he will get the right to claim the ownership of the ground parcel for free if he proves that he has used it purposely.
Representatives of municipal authorities claimed in court that they have the full right to decide on the use of the parcel “at their own discretion”. Mr. Suvorov explained in court later, ‘I was told in our district authorities administration that I had to wait for a while, unless anybody signs the agreement, they will give this ground parcel to me.’
In our opinion, the Committee gave illegal advantage to the deliberately “chosen” applicant while singing the agreement of fixed-term unconsidered use of land, which served as the reason to appeal this decision of the Committee for the Management of Municipal Property in court.
In January 2018, the Arbitration Court of Kemerovo Region declared illegal the decision of the Committee for the Management of Municipal Property to transfer the parcel for unconsidered use failing to comply with the procedure established by law requiring notification on the possible transfer of a parcel.
During the proceedings, the barristers and lawyers of the Bar Association “Jurproject” proved that public property, such as ground parcels, government ownership in which is not delimited, cannot be transferred at the discretion of a regulatory body without following the legal procedures. The procedure of assigning agricultural land for the farmers’ needs is strictly regulated by the Land Code of the Russian Federation: in case of receiving an application for assigning a parcel (no matter on which basis), the public body authorized to dispose a of parcel shall publish a notification of the possible lease of such a parcel indicating specifying the purpose of assigning it and the legal basis on which such assignment is intended. If no applications were received from other persons within 30 days, the public body shall decide to assign the ground parcel to the single applicant without an auction. If the applications from other persons have been received, the authority shall make a decision about the refusal to transfer the parcel to the first applicant without an auction and arrange the bidding procedure.
As far as the procedure was not followed in a proper way, the Court took the part of Pavel Shaport and found the actions of the Committee for the Management of Municipal Property illegal and the agreement and transaction – null and void: as a result the parcel was transferred back to the municipal authorities.
The Committee for the Management of Municipal Property of Kemerovo District did not agree with the court decision and filed their appeal to Appellate Court and later appealed on cassation. But all other courts only confirmed the position of the lawyers of the Bar Association “Jurproject” – it is against law to dispose any public land just at one’s own discretion!
‘The government bodies actually have this option to transfer land for unconsidered use, however they must use this authority in a proper way in compliance with the law: publishing the notification about assigning land for personal construction, gardening and farming within the limits of the district area. In other cases of assigning a ground parcel in unconsidered use the notification is not required.
In such a way the principles of fair business practices will be realized and municipal budget will be full. Only the cases when the land is poor and irredeemable to be leased, it can be assumed that such land should be assigned to some person unconsidered to be under good control and in good hands”.Yana AlexandrovaA lawyer of the Bar Association “Jurproject”