Sale of rented premises

SALE OF RENTED PREMISES

Written request of the tenants about the foreclosure real estate leased over 3 years, are considered the owner of said property in accordance with the norm prescribed by the presidential decree of the Republic of Belarus from July 4, 2012 No. 294 "On the procedure of disposal of state assets", and also similar to the norm established by the decision of the Gomel city Council of deputies dated 23 November 2012 № 168 with regard to the following criteria:
the need for the use of the property by the owner for own use in the future in the organization.

THE MECHANISM OF THE SALE OF STATE PROPERTY LEASED
LEGAL ENTITIES AND INDIVIDUAL ENTREPRENEURS
AT LEAST THREE YEARS

Directive of the President of the Republic of Belarus of 31 December 2010 No. 4 "On developing entrepreneurial initiative and stimulating business activity in Belarus" provides for the right of preferential acquisition of state-owned property (except land) is provided to business entities that rent it for at least three years, by installments of five years.

This was implemented in the Decree of the President of the Republic of Belarus from July 4, 2012 No. 294 "On the procedure of disposal of state assets".

Sub-paragraph 6.8 paragraph 6 of the aforementioned Decree established that if other is not established by the President of the Republic of Belarus, legal entities and individual entrepreneurs not less than three years renting (use on the basis of the contract of uncompensated use under job creation) owned by the Republic of Belarus capital structures (buildings, constructions), including those not registered in the prescribed manner, isolated areas, Parking lots, other real property (the object of rent (free use), duly performing its obligations under the lease contract (free use) for the specified period, in the case of a decision by the owner on the alienation of these objects of rent (free use) have a pre-emptive right of acquisition of the property at market value with the provision of installment payment for up to five years with monthly indexation of payments from the date of conclusion of the contract of sale.

Notice of intention to sell the leased object (for gratuitous use) shall be sent by the lessor (the lender) to the lessee (the borrower) by registered letter with acknowledgment of receipt. In the absence of the lessee (the borrower) at the location specified in the rental contract (free use), or if the lessee (the borrower) from receipt of the notice, the lessee (the borrower) is deemed to have received the notice after 7 days from the date of notification.

If within 30 calendar days from the date of receipt by the lessee (borrower) notice to the lessee (the borrower) in writing has not reported to the lessor (the lender) on its agreement to acquire the object of lease (free use) and (or) not submitted signed by the lessor (the lender), the contract of purchase and sale, the object of rent (free use) may be in the manner prescribed by law sold at auction (on competition) or transferred to the property of another person.

The Ordinance also provides that if the lessee (the borrower) produced at the expense of own funds in the prescribed manner and with the written consent of the lessor (lender) leasehold improvements inseparable without damage to such property, the sale that the tenant of the facility lease (free use), its market value in its definition by the organisation undertaking the assessment reduced by the amount of the expenses incurred by that lessee (borrower) for specified improvements if the lessee (the borrower) will not reimburse these costs.

According to the decree of the State property Committee of the Republic of Belarus from January 18, 2013 No. 6 "On the interpretation of provisions of the Decree of the President of the Republic of Belarus from July 4, 2012 No. 294 "On the procedure of disposal of state assets" the amount of costs, which decreases the market value of the redeemed of the facility lease (free use) was determined based on the residual value of permanent improvements, which were these costs calculated at the date of determining the market value of the redeemed by the lessee (borrower) state property. When calculating the residual value of permanent improvements to their physical deterioration is determined on the basis of examination and determine their actual condition. If the object is not available for inspection, possible to use a method of regulatory depreciation.

A similar procedure is provided in respect of legal entities and individual entrepreneurs renting real estate, owned by the city of Gomel, which is defined by the Instruction on the procedure of management and disposal of property owned by the city of Gomel, approved by the decision of the Gomel city Council of deputies dated 23 November 2012 № 168.

The legislation does not specify the duty of the owner decision making on alienation of objects of rent (free use). Only after the tenant appears preferential right to purchase the leased object.

However, this is not a barrier to recourse to the landlord to consider the possibility of selling the leased property.

The conditions on which the installment payment of the facility lease (free use), determined the resolution of the State property Committee of the Republic of Belarus of 31 July 2012 No. 25 "On the procedure of calculation of payments under the installment payment of the alienated property owned by the Republic of Belarus".

So, the initial payment must be at least 30 percent of the sale price of the property rent (free use) taking into account the previously paid amount of the Deposit, if paid.

Payment period initial payment should not exceed 30 calendar days from the date of conclusion of the contract of sale.

The remaining amount is payable in equal monthly installments during the period for which payment in instalments beginning with the month following the month in which should be carried out initial payment in accordance with the contract of sale.

Monthly amount of installment specified in the contract of sale, are indexed based on the producer price index of industrial products for industrial purposes, which is calculated and published by the National statistical Committee of the Republic of Belarus.

The monthly payment is ptsetse within five working days from the date of publication of the producer price indices of industrial products for industrial purposes.

The contract of purchase and sale of object of rent (free use) is in the form prescribed by order of the State Committee on property of the Republic of Belarus of 4 September 2012 № 182.

27 January 2015, as recorded in the Decree changes, objects of rent (free use) may in the manner prescribed by law to be sold at auction with the establishment of an initial sale price equal to the market value of rent (free use) if within 30 calendar days from the date of receipt by the lessee (borrower) notice to the lessee (the borrower) in writing has not reported to the lessor (the lender) on its agreement to acquire the object of lease (free use) and (or) not submitted signed by the lessor (the lender), the contract of sale. Further, at the request of the lessee (the borrower) to acquire the object of lease (free use), but since the auction, the cost of this facility lease (free use) can be greatly increased.