17.07.07

Renting in Russia
By Katya Fisher
Market Analyst, Alinga Consulting

With horrors real and hyped by rumor, renting an apartment in Russia may seem daunting for a foreigner. The legal issues are complex, but not entirely unnavigable. The following article seeks to inform renters of their rights as given by Russian law (these rights apply to Russian citizens as well as to foreigners) as well as to forewarn the reader of certain difficulties that may be encountered while renting in Russia.

The Basics

Rental agreements within the Russian Federation must be in the form of a written contract. We've provided a sample of what such a contract might look like here. Ask that your lease be written in Russian, with an English translation if you yourself cannot read the original Russian (the lease should state that it is in both Russian and English but that the Russian version is binding). You may need to cover the translation costs yourself. The requirement of Russian language is logical as the contract will need to be read by third parties, for example by courts, police authorities, locksmiths, etc. who will likely only speak Russian. The lease agreement must be registered with the Federal Registration Service (www.rosregistr.ru) in order to ensure its validity.

The contract should state the monthly rent at a fixed rate. If the rent is to be stated in the contract in a currency other than rubles the contract must state the rent as being in foreign currency according to the rate of the Central Bank (or according to a fixed rate stated in the contract) on the day of payment. The landlord does not have the right to raise the rent during the rental period unless such increases are explicitly stated within the contract. The contract must also state the term (beginning and ending dates) of the rental period.

The contract should require the landlord to register you as well as anyone who lives with you as well as your visas. Registration is extremely important for foreigners living in Russia; without it, foreigners face fines and even deportation. There should be no additional fees attached to registration other than the standard government registration fees. The contract must require the landlord to register you for the entire term of the lease, and stipulate a strict penalty if the landlord fails to do so at any point during the rental term. A common penalty is a discount of fifty percent off the rental price for any month you are not registered.

According to the law, a tenant must give notice when leaving a flat within a “reasonable” amount of time. As this is quite vague and subject to interpretation it is recommended that the term of notification be stipulated in the agreement.

Difficulties with Contracts and Registration

Despite being illegal, many landlords refuse to sign rental contracts as having a registered legal contract means that they must pay taxes (of about 13%) on the rental income. Many will also refuse to register tenants because they fear the registration may also alert the tax authorities to their income. In fact, enough landlords practice this that many renters feel that they cannot simply demand that the entire process occur legally.

Some have found that mentioning to landlords that anyone can be registered as a long-term guest in an apartment can be helpful. The landlord, in doing so, declares that person is living in an apartment the landlord owns, but is not paying rent to do so. In this scenario, the landlord is technically defrauding the state – but the tenant’s registration is considered legal. Other tenants have had to take more drastic measures such as making threats to use connections (whether real or invented), to inform the tax authorities that the landlord is not paying taxes on income. Others have taken more creative routes and found friends that own apartments and are willing to register them there as guests in the above-mentioned procedure.

In any case, we repeat that registration is extremely important and that anyone looking for an apartment should make sure that their registration will be taken care of before signing any contract. In situations such as lockouts, for example, it is illegal for a locksmith to fix and open a door for anyone who is not registered in the apartment and does not have the appropriate papers.

Because one must now be re-registered any time one leaves Russia for more than three days or goes to a new Russian city for more than three days, frequent business travelers are faced with the issue of needing their landlords to deal with registration on a regular basis. This nightmare can be alleviated by having the landlord to give the tenant power of attorney, and a letter from the landlord stating that, for example, the landlord is out of the city quite often and therefore unable to consistently take care of the tenant’s registration. With these documents a foreigner may register him or herself.

Types of Contracts

If you are renting as an individual for more than one year you may enter into a contract good for up to five years. This type of contract is referred to as a “dogovor naima” (residential lease agreement) and states that the landlord must provide the tenant with a minimum of three months prior notice in terminating a lease at the end of the rental period. If the landlord does not provide three months notice in terminating a lease the tenant has the preferential right to renew the lease by simply remaining in the flat and continuing to pay rent.

If your company is renting private housing for one year or longer, your company must conclude a “dogovor arenda” (commercial lease agreement) with the landlord. The contract must be registered with Moscom Registratsi and does not allow the tenant the same preferential right to renewing the “dogovor naima”.

If you are renting for less than one year there is no registration involved. In this case, it is absolutely necessary to have both the landlord’s and the tenant’s signed copies of the lease agreement notarized. Although this can be costly, and landlords often balk at having to spend an afternoon at a notary office, notarizing a rental contract is the only way of protecting yourself should any issues arise.

Expenses and Payments

It is standard for your landlord to request a security deposit equaling one month’s rent. Another expense you may occur is an agent fee (if you use such an agency), which also usually entails one month’s rent paid to the agent who finds and negotiates the deal. Some foreigners, incidentally, have found it helpful to negotiate rent directly with the agent. By offering the agent a higher fee in exchange for negotiating a lower rent, or even registration issues, some renters have found they can effectively gain better long-term deals on their apartments for a smaller one-time fee.

The landlord is responsible for maintaining proper care of the rental unit and providing basic utilities or ensuring their provision to the tenant for a fee. The agreement should state which party is responsible for fixing and/or replacing what (i.e. plumbing, appliances, etc.).

The tenant is responsible for paying utilities fees separately unless otherwise outlined in the lease agreement. Depending on the location and size of the apartment, as well as depending on the number of people living there, this can amount to an additional monthly expense of 1000-40000 RUR (about 40-150 USD). Ask the landlord to show you utility bills from recent months so that you know how much this extra expense will be. Make sure all information regarding utility payments is stipulated in the contract.

If you intend to pay your rent in cash (rather than, for example, by wire transfer) make sure you receive signed receipts from your landlord for any money given. Without receipts you will not be able to prove that you have paid your rent and your landlord will have the opportunity to use this against you.

Permanent and Temporary Guests

As said before, Russian law allows for guests to reside in an apartment.

The rental contract must name those individuals in permanent residence. The tenant is liable for all actions of any permanent residents of the rental unit and therefore may opt to bear joint liability for the rental by entering a lease agreement as a co-tenant with another individual who is permanently residing in the rental. However, unless the rental contract states otherwise, the landlord will have the right to demand the previous contract be nullified and an entirely new contract be drawn up. This will give the landlord the opportunity to raise the rent and change the terms of the contract. Individuals living permanently with the tenant may do so only by consent of the landlord - except in the case of minors.

The tenant has the right to permit temporary lodgers to stay without charge in the apartment if the landlord is notified and agrees to the lodger. While the law does not specify this, it is best to obtain permission from the landlord in writing for any guests the landlord agrees to.

The renter should bear in mind that the legislation within the Russian Federation states a per-person living space norm, which in Moscow is stated in square meters. In the case of violation of the living space allotment the landlord may refuse both permanent and temporary lodgers. Although federal legislation states an absolute minimum of eighteen square meters per person (a space of only about 8 feet by 7 feet!), actual numbers vary by city and, in Moscow, by district.

Subleasing

Subleasing apartments is allowed by Russian law if it is also allowed by the contract signed by your landlord. The tenant, however, remains liable for all actions of any subtenants and guests within the apartment. The subleasing contract may not extend past the term of the rental contract and the preferential right of a tenant to renew a leasing contract does not extend to a subleaser.

Breaking a Contract

There are few cases where a landlord may legally break a rental contract in a court of law. One of these is if the tenant has not paid rent for six months, or, in the case of short-term rental contracts (under one year), where payment has not been made for two months. Another instance is if the landlord can prove that the tenant or any “official guest” has damaged or destroyed property on the premises.

A rental contract may also be dissolved in a court of law by the tenant or landlord if they can show that the apartment is no longer fit for residence. Also, if the tenant “systematically” violates the rights and interests of neighbors the landlord may issue the tenant a warning. In showing that a tenant has violated the rights and interests of neighbors, or anything stated in the rental contract, the burden of proof lies with the landlord. There are no formal laws regarding the procedure involving the issuing of warnings and therefore this must be described in the rental contract as well. If the tenant continues to violate the rights and interests of the neighbors (i.e. creating a disturbance, performing any actions that may be hazardous to neighbors/building residents, etc.), the landlord shall have the right to dissolve the rental contract in a court of law.

If the contract is dissolved, the tenant and others living in the apartment can be evicted.

A Few Last Words of Advice

Know your rights and try to get yourself a solid rental contract. Neither your landlord nor the authorities may legally evict you without a court order under any circumstances if you are able to provide a copy of that contract.

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