It is becoming more often that practicing lawyers are starting dealing with cases where a foreign client has an intention of purchasing real estate (most and foremost – buildings and premises) on the territory of the Republic of Belarus. Obviously this tendency is dictated by the fact that investments into real estate is one of the most reliable forms of investment whereas under the current stable and gradual increase of the value of real estate such investment also becomes profitable. Consequently, first and most important question which the foreigner usually has is whether Belarussian laws allow purchase of real estate by a foreigner.
Pursuant to the Investment Code of the Republic of Belarus dated 22 June 2001 (as amended) foreign investors are entitled to conduct investment activity on the territory of the Republic of Belarus in any forms envisaged by the Code including purchasing of real estate. Consequently the Belarussian legislation contains general permission for possibility of purchasing real estate by foreigners or foreign organizations. At the same time while planning such transactions a foreign citizen or a commercial organization should take into account certain peculiarities and limitations set forth for specific forms of purchasing real estate.
Firstly, is necessary to note that the legislation sets for foreign investors different procedures of purchasing buildings and premises of housing and non-housing nature thus creating different conditions for purchasing real estate by foreign citizens and organizations. Pursuant to the Procedure of Sale-Purchase of Apartments (Houses) approved by the resolution of the Council of Ministers of the Republic of Belarus No. 589 dated 31 August 1993 (as amended) foreign citizens and aliens permanently residing on the territory of the Republic of Belarus who are engaged on legal grounds in labor, economic or other activity are entitled to purchase apartments (houses) on the grounds of contracts of sale-purchase in any location of the Republic of Belarus, while foreign citizens and aliens who are not permanently residing on the territory of the Republic of Belarus are entitled to purchase apartments (houses) on the grounds of international treaties. As of now the Republic of Belarus has entered into the respective treaty only with the Russian Federation. Consequently, only a foreign citizen or an alien permanently residing on the territory of the Republic of Belarus or a Russian citizen can purchase an apartment (house) on the territory of the Republic of Belarus.
The respective limitations are not established for a possibility of purchasing real estate of non housing nature (administrative, manufacturing, trading building or premises). Both foreign citizens and foreign organizations are entitled to purchase the respective objects by becoming their owners. At that pursuant to the Article 521 of the Civil Code of the Republic of Belarus dated 7 December 2003 upon entry into of a contract of sale-purchase of real estate it is sufficient to meet simple written form, which means that parties of a contract do not even need to visit the notary.
It is also worth mentioning that despite the general rule that the land “follows the destiny of the building” foreign citizens and organizations do not become owners of land plots on which the purchased objects of real estate are located since the Land Code of the Republic of Belarus dated 4 January 2003 does not envisage a possibility of acquiring right of ownership for land by a foreign investor.
If your are a foreign investor and have decided to purchase a building or premises in the Republic of Belarus you should duly prepare for the contract. First of all it is necessary to check powers of the owner of the object of real estate for its alienation, in particular whether all necessary approvals of organs of management have been obtained as well as find out whether the person who signs the contract is a due representative of the owner. Prior to entering into a contract it is also very important to make sure the object of real estate being sold is not burdened by any supplementary obligations (in particular is not pledged, is not arrested). It would also be useful to check the history of transactions entered into with the object of real estate you are interested in before you enter into the contract. Of course it is also very important to conduct expertise of the factual state of the object being purchased since it may contain hidden and in many cases unrecoverable technical defects. Finally, if you are planning to purchase a building or premises that can be used by local authorities for public purposes it is necessary obtain refusal of the local administration from the preferential right of purchasing this building or premises prior to entry into the contract since pursuant to the Law on Local Authorities dated 20 February 1991 (as amended) local authorities have the respective preferential right.
Obviously, that in order to perform all of the actions mentioned above you need to refer to services of a professional lawyer. Practice shows that the most optimal way of preparing for the contract of sale-purchase of the object of real estate is referring to the services of both real estate agency and lawyers: real estate agents will provide you with the most suitable variant and facilitate obtaining of any intermediate approvals and documents whereas lawyers will guarantee the legal side of the transaction.
At the end of this article it is also necessary to note that a new Law of the Republic of Belarus “On State Registration of Real Estate, Related Rights and Contracts” was passed in July 2002. The Law was aimed at unifying the procedure of entering into real estate contracts on the territory of the Republic of Belarus. This means that the objects of real estate which were subject to registration procedures by different authorities of the country shall now be subject to registration by the unified system of registration authorities. Pursuant to the Law, real estate, the relating rights and contracts shall be registered by the Republican Organization on State Registration of Real Estate and the Relating Rights, its local agencies, registrars as well as by owners, holders of other relating real estate rights and persons intending to acquire real estate rights (candidates for becoming owners). The law has resolved a number of questions that have remained argumentative up until recent what significantly simplifies conducting of the respective contracts in Belarus by foreign investors.
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