New direction of the Russian real estate market: non-commercial hiring

Recommendation points

• Russian legislation on non-commercial employment
• The subtleties of the non-profit hiring procedure
• The pitfalls of nonprofit hiring

Russian legislation on non-commercial employment

The essence of the concept of non-commercial rent is that the state provides housing for rent to citizens with a low income level at prices that are much lower than the average market. The level of income that will allow you to qualify for such real estate will be established by the legislative act of the constituent entity of the Russian Federation in which the citizen lives, based on the prices of apartments in the region.

The main criterion is that the income level of the applicant for non-commercial rental housing and his family members should be higher than that of citizens recognized as poor (there is social housing for them), but which does not allow them to independently purchase their own real estate

The lease term can range from one year to 10 years. The non-commercial lease agreement may be terminated by the landlord early if it turns out that the tenant:

• does not systematically pay rent;
• subleases real estate to other persons;
• violates the rights of other residents;
• destroyed or damaged the apartment provided to him;
• if he or his family members have other housing in the territory of the same municipality.

In this case, the new property is not provided to the tenant.

The agreement may be terminated early by the employer. True, for this he needs the consent of his family members living with him, and he must inform the landlord three months in advance..

The subtleties of the non-profit hiring procedure

The very first thing a person who is going to apply for non-commercial rental housing should do is to carefully analyze the legislation of the region in which he lives and make sure that his level of income allows him to get such real estate.

Anyone who entered the queue for receiving social housing rent before January 1, 2005, falls into this category automatically. All other citizens need to collect documents confirming their level of income, write an application for registration under the non-profit hiring program, and contact a multifunctional center or other body that deals with registration. If the application is satisfied, you must contact the organization that is engaged in the rental of such housing.

The pitfalls of nonprofit hiring

On the one hand, non-commercial renting is a real chance to get their own apartment at an affordable price for millions of Russians. But such housing has its drawbacks..

First of all, it is a non-fixed amount of rent for non-commercial apartments. As planned by the legislators, it should not exceed the restrictions established by the state authorities of the region in which the housing is located, but at the same time it should be sufficient to reimburse the developer for the costs of building a house. Also, in order to make such houses payback, it is planned that the state will provide free land for the construction of non-commercial rental housing and connect such houses free of charge to engineering networks..

In Moscow, with its sky-high prices for land plots, it will be beneficial for developers to participate in the construction of such housing. But in regions where plots are much cheaper, providing them free of charge will not be a tangible help to the developer and they will have to reimburse their expenses due to the high rent..

For example, houses are currently under construction in Surgut and Nefteyugansk, in which apartments for non-commercial rent will be provided. The developers plan that the rental price will be from 15 to 30 thousand rubles. But at the same time, according to the website rosrealt.ru, the average market price for renting a 1-room apartment in Surgut in October 2014 was the same 15,119 rubles. Thus, it is much easier for citizens who want to get an apartment to rent it on their own than to bother with registration in the non-commercial rental housing program.

Another disadvantage of such apartments is that tenants receive housing for a period not exceeding 10 years and cannot dispose of it. At the moment, Etalon has already begun construction of non-commercial rental housing in St. Petersburg. It is planned that the rental rate for a similar property will be 20% lower than the mortgage rate for a similar property. The difference is not too big and it will be much more profitable for tenants to get a mortgage. Indeed, in this case, they are the owners of the apartment and can sell it, rent it out, inherit it or live in it themselves (all their life, not 10 years).