Zigzag at the dacha

The Constitutional Court allowed the collection of land plots for debts

From now on, owners of land plots who find themselves in the unenviable role of defaulting debtors should keep in mind that bailiffs can appear at any moment and seize hundreds of acres acquired through back-breaking labor. True, provided that for the debtor they are not the only source of existence. This decision was made yesterday by the Constitutional Court , recognizing one of the norms of the Civil Procedure Code, which previously provided immunity to land and dachas, as inconsistent with the Basic Law. Until now, land plots, “the use of which is not related to the implementation of entrepreneurial activity,” were protected from the claims of creditors, along with household furnishings, products and work tools of the debtor. That is, farmland could be taken away for debts, but dachas could not. But the judges of the Constitutional Court found that this “provision of Article 446 of the Code of Civil Procedure significantly violates the balance of interests of the creditor and debtor and is an unfair, inadequate and unacceptable restriction of the constitutional rights of creditors.”

The verdict of the Constitutional Court very clearly demonstrates that judges perfectly understand the specifics of their homeland, where millionaires can officially be listed as unemployed, and landowners can be modest summer residents. The document notes that even without the status of an entrepreneur, a citizen can “freely invest money in expensive plots of land, purchase them in unlimited quantities, including for subsequent resale.” It was this circumstance, according to the judges, that allowed debtors to evade the claims of creditors.

However, the judges tried not to throw out the baby with the bathwater and provided restrictions for overzealous creditors. The Constitutional Court made an exception for cases where the results of using the site “are the main source of livelihood for the debtor citizen and his dependents.” In addition, the dacha will not be confiscated if the house standing on it is the only place of residence.

The Constitutional Court ordered the deputies and senators, who now have to implement the verdict into amendments to the Code of Civil Procedure, to take into account several parameters that should be fixed when determining the boundaries of the property immunity of debtors. In particular, it is necessary to take into account the number of land plots owned by the willful defaulter, their area and value, the intended purpose and actual use of the land, and the debtor’s lack of individual entrepreneur status. The legislator, according to the judges of the Constitutional Court, must “strive to ensure that in such cases the citizen-debtor and his dependents maintain the necessary level of existence.” And if this level suffers due to the seizure of land from property, the debtor may be subject to a special legal regime that provides exemption from collection.

“Land, like any other real estate, is a valuable object, and it is quite possible to recover land plots from the debtor,” Pavel Krasheninnikov, head of the State Duma Legislation Committee, shared his point of view with Vremya Novostei. At the same time, the deputy assumes that legislators, who will most likely prepare amendments for the autumn session, will introduce restrictions - the same as Art. 446 of the Code of Civil Procedure establishes in relation to housing: if this is the only housing, then it is impossible to foreclose on it. “Six acres in a gardening cooperative are of no value, but if we take it away for debts, we will deprive a person of one of the main sources of livelihood,” emphasizes Mr. Krasheninnikov.

However, even one hundred square meters, especially in prestigious areas, can be of great value, taking into account the rapid increase in the cost of land in the vicinity of the Russian capital and other large cities of the country. And the Constitutional Court, taking the side of the creditors, essentially opens up new horizons for Russian banks complaining about the increase in non-repayment of loans. Considering the volume of construction and the state of the real estate market, a queue will inevitably form for the “land confiscation”.

Russian lawyers are already worried that the decision made by the Constitutional Court and the changes that legislators will make to the Code of Civil Procedure will be interpreted by the courts clearly not in favor of the debtors. “The problem is that an ordinary person, when he comes to court, will not know the legal subtleties, and our courts are far from impartial,” lawyer Alexander Skovorodko noted skeptically in a conversation with a Vremya Novostei correspondent. “The judge will still have to be convinced that six acres is your only source of existence.” According to the lawyer, the innovation in the law will be in great demand by creditors due to the fact that land in the regions is rapidly becoming more expensive. First of all, this concerns elite lands in the near Moscow region. “For example, I defended a pensioner who owned a rather modest plot of land - nine and a half acres. But this plot was located in Barvikha, and while I was working on this matter, the price per hundred square meters managed to increase from 30 to 70 thousand dollars,” says the lawyer. Now, as Mr. Skovorodko fears, relying on the legal mechanism of the Civil Procedure Code, his client’s opponents will be able to turn her into a debtor, and then auction off her land.

Mikhail MOSHKIN