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Mortgage and servitude

Two other relevant rights over property are mortgages and servitude (easements).

3.1 Mortgage

The law surrounding security and pledge agreements of immovable property (“mortgage agreement”) is governed by the Mortgage Law. The Mortgage Law provides with that the following types of property can be mortgaged:

  • Land plots with some exceptions in respect of municipally-owned land plots and land plots held by the state;
  • Enterprises, buildings and structures;
  • Residential houses and apartments;
  • Country houses, garages and other structures for personal use; and
  • Aircraft and sea-going vessels, inland-navigation vessels and space objects (see also section 8.1 “real estate as security” below).

A mortgage can arise either by virtue of law or by a mortgage agreement. In both cases it is subject to state registration in the Property Register (otherwise it is invalid).
It should be noted that it is only possible to have a mortgage over buildings or structures if there is a simultaneous mortgage over the land plot on which they are situated. It is another limb of the principle that buildings follow the fortunes of the land on which they are located.
A mortgagee’s rights under the obligation secured by the mortgage and under the mortgage agreement can be certifed by a mortgage deed (also known as a mortgage).
The Mortgage Law stipulates all requirements for this security.
The mortgagor continues to have use of the mortgaged property and any restriction to this rule is void. However, the mortgagor requires the consent of the mortgagee to transfer the mortgaged property through sale, donation, exchange or to contribute it to the assets of a partnership or company, unless the mortgage agreement provides otherwise.
The mortgagee has the right to assign a claim from the mortgage agreement or an obligation secured by the mortgage (main obligation) to any third party, unless any law or the contract provides otherwise.If the main obligation is not fulflled or is fulflled improperly, the mortgagee can foreclose on the mortgaged property to meet the expense of the property claims. There are two types of foreclosure on mortgaged property: judicial and extra-judicial. It is a general rule that a mortgage is subject to judicial foreclosure by means of a court order. The mortgaged assets are then sold at a public auction held by the court authorities.
Extra-judicial foreclosure is possible on the basis of an agreement between the mortgagee and the mortgagor. It may be implemented on the basis of executive inscription by a notary, provided that the mortgage contract was concluded in the form of a notarial deed.

3.2 Easenent (servitude)

An easement constitutes a limited right of use of another’s real chattels which can be a land plot, buildings, structures or other immovable property. Under Russian Civil Code, an easement can be established in order to ensure passage through the neighbouring land plot, ensuring water supply
and land reclamation, as well as other needs of the owner of the real estate.
It is possible to establish an easement by an agreement between the parties or by a court decision upon the suit of the person requiring the establishment of the easement.
It is important to note that easements are preserved in the event of the transfer of the rights to a land plot encumbered by those easements.
An easement may be public or private depending on the person/entity in whose favor it is encumbered. Easements are divided into two types according to their length: temporary and permanent.
Easements should be used in a way that is least burdensome to the land plot in respect of which they are encumbered.
The owner of the land encumbered by the easement has the right to demand payment from the persons for whose beneft the easement has been created unless otherwise provided by federal law.
Easements are subject to state registration in the Property Register.