Privatization of housing: advantages and disadvantages

According to Rosstat, today about 80% of the total housing stock in Russia is owned by citizens and private legal entities.

Dear readers! The article talks about typical ways to resolve legal issues, but each case is individual. If you want to find out how to solve your particular problem , contact a consultant:

+7 (499) 110-56-12 (Moscow)

+7 (812) 317-50-97 (Saint Petersburg)

8 (800) 222-69-48 (Regions)

APPLICATIONS AND CALLS ARE ACCEPTED 24/7 and 7 days a week.

It's fast and FREE !

At the same time, the process of denationalization of the real estate market, which began in 1991 and has become indefinite, continues.

Citizens using housing under a social tenancy agreement weigh the pros and cons of apartment privatization.

Concepts

To better understand the privatization process, it is necessary to define the main terms.

Privatization of housing is the free transfer of public housing into the ownership of citizens who permanently reside in it legally.

Residential premises - an apartment, house, a dedicated part of a house or apartment, specially designed for people's living.

Emergency housing is a room that is located in a building; half of the load-bearing structures are classified as emergency and pose a threat to the lives of residents.

Official housing is premises that belong to a specific organization and are provided to employees while they are working.

Legislation

The main document that concerns the process of denationalization of the housing stock is Law No. 1541-1 “On the privatization of the housing stock in the Russian Federation” dated July 4, 1991.

This regulatory act contains the rules by which premises are transferred from the category of state property to private hands.

When solving specific problems related to the privatization of residential premises, you should familiarize yourself with the provisions of the Housing Code of the Russian Federation. This code contains information about which house and in what order is classified as emergency, how rent for residential premises is determined and many other issues.

Certain issues of providing public services are regulated by local acts and regulations of municipal authorities.

Is privatization of an apartment mandatory?

Privatization implies the process of transferring state-owned residential property into the hands of the owner. The concept of “privatization” is described in more detail in Article 1 of the Law of the Russian Federation of July 4, 1991 No. 1541-1.

To privatize a living space or leave everything as is is an individual choice for each person. The right to privatize an apartment arises from a citizen who lives in an apartment registered under a social document. No one has the right to oblige the privatization of housing.

Since privatization has been extended indefinitely since 2020, citizens living in apartments under a social tenancy agreement have the right to independently decide whether to privatize housing and when.

Example

Sidorov A.O. lived with his wife and three-year-old son in an apartment registered under a social tenancy agreement. Together with his wife, they decided to privatize their home. After submitting the application for privatization and the available documents for the apartment, Sidorov A.O. refused to draw up a privatization agreement, explaining this with the following points: in the application of Sidorov A.O. did not mention his three-year-old son, and also did not provide written consent from his wife.

It is worth noting that privatization is not required at all for a cooperative apartment . This is due to the fact that an apartment purchased by a citizen in a housing construction cooperative is not state property. According to Russian legislation, payment of the share contribution in full is established as the basis for acquiring ownership of residential premises - clause 4 of Art. 218 Civil Code of the Russian Federation, clause 1, art. 129 Housing Code of the Russian Federation.

Why privatize an apartment, important points

Sale of non-privatized housing

Selling a non-privatized apartment has its own nuances. You can read more in the article here

Let's try to figure out why to privatize the apartment. Let us outline the main goals that people pursue when submitting documents for privatization.

• It is important for many to receive moral satisfaction. Previously, they did not have such a large property, but then they became full owners of the apartment.
• Gain the opportunity to freely manage housing. It is allowed to bequeath, sell, or donate a privatized apartment. There is no need to register a person in it - he will be quite able to remain registered in another place.
• A significant part of people are starting to prepare documents for privatization because they are already planning to sell this housing.
• There is a serious misconception: at one time, controversial information was disseminated about the high risks of living in public housing, as it was mistakenly assumed that people could easily be evicted from it. The process of eviction from a municipal apartment is very labor-intensive, and the number of eviction cases is minimal. When discussing eviction for debts, it is necessary to remember that it is now allowed to evict people from their own apartments by putting their housing up for auction.
• Many people continue to submit documents due to the proximity of the deadline for free privatization. The problem of the thoughtlessness of such a step relates to the pros and cons of apartment privatization in 2020. It is impossible to be guided by such reasons in such a serious matter.

You can see in studies on the topic that people privatize apartments to rent them out. The desire to obtain rent benefits is not at all connected with the privatization procedure. Not everyone draws up lease agreements with the corresponding legal procedures.

Getting property at minimal cost looks very tempting. It is important to remember about the burden of responsibility that falls on the shoulders of the owner, as well as to identify a large number of pitfalls.

Who can become the owner

Law No. 1541-1 establishes the following requirements for applicants:

• citizen of the Russian Federation;
• permanently registered in the apartment that he wishes to privatize;
• has not previously participated in privatization;
• the residential premises are in federal or municipal ownership;
• the apartment is not classified as service housing, the housing stock of a closed military camp, or a dormitory, and is not recognized as unsafe;
• the citizen submitted all the necessary documents.

Article 11 of Law 1541-1 provides a person with the right to participate in privatization again if he previously received ownership of housing while a minor.

Procedure

The privatization process can be divided into several stages:

1. Decision-making. At this stage, a person must analyze the advantages and disadvantages of registering an apartment as a property. You will also need to obtain consent from citizens who are registered in the residential premises.
2. Collection of documents. It is necessary to submit an extensive list of papers that contain information about the applicant and the apartment to be privatized.
3. Consideration of the appeal. Within 2 months, the application and its annexes will be studied by the local property department. After this, the citizen will be sent a message about the results.
4. Conclusion of an agreement. If the answer is yes, then the applicant can come to the municipal authority and enter into an agreement to receive an apartment free of charge.
5. Registration of rights. A citizen with a passport and 2 copies of the signed agreement applies to the local branch of Rosreestr. Within 5 working days, employees of this government agency enter the necessary information into the electronic database and issue a certificate of ownership.

Required documents

To privatize an apartment, you need to submit the following documents:

• sample application;
• citizen's passport;
• social rent agreement;
• a warrant for the apartment or a copy of the order of the authority where the citizen is granted the right to use the premises;
• extract from the house register from 07/21/1991 before registering at this address;
• certificate of non-participation in privatization;
• consent of all registered citizens to carry out privatization;
• a power of attorney in the name of the applicant from each person who will receive a share of the premises;
• passports of all privatization participants;
• personal account statement;
• technical certificate;
• extract from the Unified State Register;
• other documents.

To find out exactly what documents you need to submit, you should contact your local property department.

In Moscow, you do not need to present a technical passport for the premises and an extract from the Unified State Register, since real estate department specialists can receive the necessary information electronically.

Conditions and grounds

There are a number of mandatory conditions, subject to which the process becomes possible:

• Tenants of state (municipal) housing have a social tenancy agreement or warrant;
• transfer of ownership is possible only for those square meters specified in the lease agreement, even if a person has been freely exploiting neighboring premises for a long time, he will not be able to privatize them;
• Participants must have permanent registration in the apartment being re-registered;
• citizens have the chance to exercise the right to free appropriation of square meters only once in their life, with the exception of persons who have already completed the process as a minor (after 18 years of age they can take part in privatization again).
• the tenant has the right to refuse to participate in privatization, after which he gets the opportunity to live in this apartment for life;
• The procedure can only be initiated with the voluntary consent of all residents registered in the apartment at once.

Be sure to read it! Confrontation: what is it like in 2020?

Pros and cons of apartment privatization

The process of registering residential premises as private property is assessed ambiguously by many people. Residents of municipal apartments carefully weigh the pros and cons of apartment privatization; 2020 did not bring any significant changes in legislation on this issue.

In shared ownership

You can participate in privatization as a family or alone.

This issue must be resolved by relatives before filing an appeal to the property department.

Shared ownership of an apartment is not the best way to own real estate.

None of the owners will be able to dispose of their share freely, without taking into account the opinions of other owners.

Decorating an apartment for one person carries certain risks. The citizen has the right to sell the apartment, and the residents will be evicted by the new owner.

Municipal

When privatizing a municipal apartment, a person receives the following benefits:

1. The ability to independently manage real estate. An apartment can be bequeathed, donated, sold, exchanged for another.
2. Guarantees of a stable position. In 2020, the completion date for privatization was set at 03/01/2017. Now this process is indefinite. But no one knows how government housing policy will change in 10 or 20 years. It is possible that the fee for using housing under a social lease agreement will become much higher.
3. You do not need the consent of the municipality to register citizens, rent out housing, or carry out redevelopment.
4. A citizen can apply to a bank for a loan and receive a large amount secured by real estate.

There are also some disadvantages:

1. You will need to pay property taxes. Its size depends on the cost of living space.
2. The rent for the premises may increase. The owner must make contributions for major repairs, which can negatively affect the budget of people with low incomes.
3. A citizen will not be able to apply for improved housing conditions with a government subsidy in the future.

When demolishing a house

Buildings are dismantled for several reasons: due to emergency conditions or due to seizure of land.

When the plot under the house is seized, citizens who have privately owned apartments will be in an advantageous situation.

They may be paid monetary compensation, the calculation of which will be based on the market price. Khrushchev apartments will cost significantly less than apartments in a building built in 1993. In other cases, an apartment of the same size will be provided.

What does the law say about the privatization of the local area of ​​a private house?
How long does it take to privatize a dacha? Find out here. In a dilapidated building, it will not be possible to privatize an apartment due to the provisions of Article 4 of Law No. 1541-1.
Citizens who live in such a house under a social tenancy agreement will receive a new apartment, taking into account the current standards for living space per person.

When resolving the issue of inheritance

If a citizen is thinking about how best to transfer residential premises to his relatives, then privatization is actually a prerequisite.

In the event that the main tenant of the premises passes away, the social tenancy agreement will be reissued to one of his family members. If he used the apartment alone, the contract will be terminated.

Therefore, in order to transfer a municipal apartment by inheritance, you need to register a relative in it.

The situation is different with privately owned housing.

A citizen can draw up a will and thus determine an heir. If there is no such document, then the property will be divided in the order of priority determined by law.

It will also be possible to bequeath real estate to several relatives.

They will be able to sell the property and split the proceeds.

The concept of housing privatization

Privatization refers to the gratuitous transfer of a real estate property, which is listed on the balance sheet of the local municipality to people living in this living space.

Citizens who live in apartments allocated by the municipality have a social tenancy agreement signed with them.

Among the main features of privatization are:

• Obtaining full rights to the object after completing this procedure.

Persons who have privatized their apartment can sell it in the future, donate it, bequeath it, and conduct other commercial transactions with it.

• The ability to register at this address not only young children or a spouse, but also any third parties.
• The need to bear financial costs associated with contributions for major repairs, as well as any general house needs.

Note: as long as people live in a real estate property under a social tenancy agreement, they are not required to make any contributions for major repairs.

Why is privatization needed?

Experts cite numerous reasons proving that apartment privatization is necessary.

The primary ones include:

Obtaining opportunities to manage your apartment, namely:

• look for buyers for this property and enter into a purchase and sale agreement with them;
• rent it out to any citizens;
• give gifts, including to people who are not relatives;
• bequeath

Only citizens will not be able to exchange this living space for non-privatized objects.

• It becomes possible to register relatives, friends, colleagues, as well as any third-party citizens in your living space.
• It is legally possible to sign an agreement in which it will be stated that a specific person undertakes to care for the owner of this home for life. Subsequently, this real estate will pass to the citizen who provided care.

Note: such agreements are especially relevant for pensioners who do not have children or other relatives willing to care for a lonely and elderly person.

Is it worth registering?

In most standard situations, the benefits of privatization greatly outweigh the disadvantages.

A person gets the apartment in which he lives for free. People take out a mortgage and pay off the debt to the bank for decades to have this opportunity.

It is worth thinking about postponing privatization if a citizen expects to take advantage of the state program for improving housing conditions.

For example, when moving from the northern region. Then you should apply for privatization after a new apartment has been allocated at the expense of the budget.

Questions and answers

During the privatization of a specific premises, various nuances may arise.

How many apartments can one person rent?

One citizen can participate in privatization only 1 time.

This rule is enshrined in Article 11 of Law No. 1541-1.

There is only one exception: the first time a person participated in privatization was before reaching 18 years of age. Then he has the right to contact the property department one more time.

Is it possible to privatize an apartment if there is other property?

The property status of a citizen is not taken into account when deciding on privatization.

A person may have several residential premises and contact the property department with a corresponding application.

If all the requirements of the law are met, then the municipal authority does not have the right to refuse.

Refusal

In some cases, government agencies give a negative response to a citizen’s request. The main reason is that not all documents have been submitted.

Most often, citizens who live in departmental housing receive refusals.

The situation is as follows: the apartment is on the balance sheet of the ministry or a certain institution, and was provided to the citizen before 1991. At the same time, the institution issued a legal act by virtue of which housing on the balance sheet of the organization cannot be transferred to private ownership.

However, Law 1541-1 has greater legal force than acts of ministries.

And in this document there are no reservations that relate to such cases. Restrictions have been established only regarding housing in military camps and office premises.

How to file a claim

The claim must contain the following information:

• name and address of the court;
• name and address of the defendant;
• FULL NAME. and the applicant's residential address;
• information on the basis on which the citizen uses the premises (indicating the details of the social tenancy agreement);
• information about the apartment: where it is located, who owns it, area and number of rooms;
• information about those registered in the apartment;
• data on how and when a citizen applied for privatization;
• information about the refusal: document date, justification;
• assertion that the refusal has no legal basis and violates the citizen’s right to privatization;
• reference to articles 2 and 8 of law 1541-1;
• the requirement to recognize the refusal of a state body as unlawful;
• requirement to recognize the plaintiff's ownership of the apartment;
• list of attached documents;
• date, signature, surname and initials of the applicant.

Photo: sample statement of claim

Do I need to pay for major repairs of municipal housing?

The formation of a cash fund for major repairs is the responsibility of the owner of the residential premises.

How to register the privatization of an apartment through the MFC? How does the process of privatization of a garden plot take place? Find out here.

Have the conditions for apartment privatization changed after March 1, 2020? Read on.

This provision is contained in Article 154 of the RF LC.

A citizen who uses an apartment under a social tenancy agreement does not have to make these deductions.

Is it possible to apply if there are debts on utility bills?

In some regions, it is required to submit an extract from your personal account along with the application.

However, there are no restrictions in the legislation in case of debt on housing and communal services.

The apartment with debts to service organizations will be transferred to the new owner.

Owning an apartment is a benefit for every person. The negative aspects in the form of property taxes and deductions for capital repairs cannot outweigh the advantages that real estate ownership provides.

Benefits Issues

Privatization is not beneficial in the following cases:

• poor financial situation;
• receiving subsidies from the state;
• the family plans to live in the premises and has no plans to buy a new one;
• low liquidity of the received object;
• the possibility of obtaining housing of larger area or prestige.

Often the objects of privatization are rooms or communal apartments that are not in demand on the real estate market. The low cost of such objects and the difficulty of finding a buyer often complicate the sales process. It is impossible to rent out such housing for decent money.

After privatization, the owner of the apartment will be required to pay property tax. The amount for a person with low or no income can be significant. In this case, it is more profitable for a single person or a low-income citizen to live in an apartment provided to him under a social tenancy agreement.

Financial benefits are also associated with the following points:

• the amount of payment for housing and communal services in non-privatized apartments is an order of magnitude lower;
• there are no costs for major repairs and maintenance of housing;
• the opportunity to reduce the burden on the family budget through subsidies.

Be sure to read it! What are the penalties for illegal abortion?

Only apartment residents can apply for non-privatized housing. For further residence, you do not need to prepare a lot of documents and go through the inheritance procedure. In the case of private property, after the death of one of the owners, there are many claimants, which often ends in litigation.