“Pros” and “cons” of privatization. :: Privatization in Russia :: Other materials

Privatization concept

The stages of economic development of the world community largely determine the current economic models at the national level.
The command-administrative form of the economy existed to varying degrees in various countries of the world. It assumed a state monopoly on almost all spheres of economic life, or a high share of the public sector in the economy. Political, economic, and social changes in society have led to the obsolescence of this model of economic relations. Many countries have made a transition from state forms of ownership to private ones. This step increased the level of competition among various spheres of the national economy, which ultimately contributed to the economic growth of the entire national economic system as a whole. Privatization is the process of transferring or selling state property into private hands. That is, part of state property of various levels of ownership is transferred to non-state organizations or private individuals.

It is worth noting that the concept of denationalization is somewhat different from privatization. Denationalization is a more global process that includes:

liquidation of the state monopoly;
transition to a mixed model of economic relations;
decentralization of the national economy;
minimizing the role of the state in economic management.

It turns out that privatization is only an element of the phenomenon of denationalization. Moreover, the latter can have various forms, methods and measures for achieving the main goal. There is reprivatization, which leads to the return of property to private owners. Previously, this property was nationalized.

The rapid stage of privatization began after the collapse of the socialist camp. Here, almost one hundred percent of the country's economy was in the hands of the state. The new demands of the world economy required measures to adapt national economies. In countries where capitalism existed, processes were also observed to transfer state property or part of it into private hands.

The essence of the national economy

Economic science deals with the study of economic systems at various levels of organization.
One of the most important subjects of study is the economy of an individual state or national economy. It is a complex structure consisting of social, economic, organizational, technical, scientific, and technological elements. At the same time, the entire national economic system has a general economic effect that arises on the basis of the above components. Economic growth is accompanied by the strengthening of national markets, which include financial, commodity, services, capital, labor, and so on. For a more complete understanding of the operation of the system, as well as to develop methods and principles for managing and monitoring processes in it, they are divided into subsystems:

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intercountry deals with issues of interaction with foreign counterparties;
the federal considers processes at the macroeconomic level within the state;
regional establishes relationships between individual areas;
intraregional considers the economy within the subject.

Although the structure of the national economy is quite complex, the main data on its condition are formed at the macroeconomic level. Typically, they are compared with similar indicators in other countries in order to identify patterns and certain trends in the system.

The theoretical foundations of the national economy solve the following problems:

establishing relationships and recurring events based on economic laws;
determination of rates and volumes of reproduction;
research into the type of structure of the national economy and its comparison with global and international experience;
development of necessary measures and measures to improve the general condition of the system, overcome crises and the negative impact of factors;
implementation of a macroeconomic approach to the study of processes in the system;
study of socio-economic processes, their comparison with past periods;
determination of factors and the degree of their impact on the system;
carrying out analysis and assessment of the current state of the economy.

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Definition according to Russian laws

From the point of view of legislative definition, privatization is usually understood as the free transfer of municipal or state-owned residential premises into the ownership of citizens who have received it for indefinite use. This process of transfer of property is regulated by the law “on the privatization of housing stock in the Russian Federation.”

The bodies authorized to carry out the privatization procedure in Russia are the BTI and the MFC at the location of the housing for which they receive property. The main document giving the right to the responsible tenant to transfer the property to himself is a social tenancy agreement or warrant.

After privatization, the property, previously owned by the municipality, becomes the full property of the responsible tenant and all persons registered in it who submitted an application.

In order to begin the procedure, the responsible tenant must submit the following set of documents :

Social rent agreement or order.
The registration certificate for the property and extracts received through the BTI.
Cadastral passport.
Refusals from participation in privatization of registered persons issued by a notary.
A certificate stating that this is the applicant’s first participation in privatization.
Copies of participants' passports.
Certificate of absence of debt for utility services.

After receiving the privatization agreement, the applicant must contact Rosreestr in order to register the transition, receiving a supporting document. From that day on, all participants in privatization become full owners of residential premises without any restrictions.

Legal basis for the privatization of municipal housing

The privatization of housing is regulated by the legislation of the Russian Federation, in particular the law “On the privatization of housing stock” No. 1541-1 of July 4, 1991. Transferring an object into private ownership is a voluntary procedure. Citizens who are responsible employers implement it themselves and bear all associated costs. Privatization is free, but you will have to pay for registration of property rights in Rosreestr and notarization of documentation.

Before starting the procedure, it is necessary to find out whether it is possible to obtain ownership of a specific object. According to the law, the following are not subject to privatization:

apartments located on the territory of military camps;
particularly valuable objects, such as apartment-museums, buildings and land plots within the territory of parks, nature reserves, and wildlife sanctuaries;
service housing;
apartments located in houses that are in disrepair, dilapidated buildings;
rooms in dormitories.

It is also prohibited to transfer into private ownership real estate that is located within the territory affected by a man-made disaster.

Positive aspects of privatization

The positive aspects of privatization include:

the opportunity to become a full-fledged home owner. If a citizen lives in an apartment under a social tenancy agreement, its owner is the municipal authority. This quite seriously limits the residents, since they do not have the right to dispose of the property. Privatization will provide an opportunity to sell, donate, or rent out an apartment. Also, municipal housing cannot be transferred to heirs. After the death of the responsible tenant, persons who have permanent registration on its territory will continue to live in the apartment. Private housing can be indicated in the will, independently establishing the circle of heirs and the shares due to them;
no need to pay rent (its amount varies depending on the location of the apartment);
Possibility of remodeling the apartment. The owner has the right to dispose of his property at his own discretion, in particular, to make any changes within the framework of the law, formalizing the procedure properly. In a municipal apartment there is no such opportunity;
no possibility of eviction from the living space for debts on utility bills. If the apartment is the owner's only place of residence, he will not be evicted. To pay off the debt, other property of a citizen may be seized, but Russian legislation does not allow deprivation of the only home;
the opportunity to register other persons on the territory of your living space. If the apartment is privately owned, its owner independently decides who will be registered in it. In housing provided under a social tenancy agreement, it is necessary to obtain permission from the municipality, as well as from all citizens registered in the territory, in order to register another person;
opportunity to own a home for free. The costs of processing documentation and registering property rights are incomparable with the prices for real estate objects established on the market in 2021;
the ability to use housing as collateral when obtaining a loan from a financial institution.

Of course, housing privatization has many advantages, but we should not forget about the disadvantages, which also need to be taken into account before initiating the procedure.

Is privatization of an apartment mandatory?

Privatization implies the process of transferring state-owned residential property into the hands of the owner. The concept of “privatization” is described in more detail in Article 1 of the Law of the Russian Federation of July 4, 1991 No. 1541-1.

Why privatize an apartment, important points

Sale of non-privatized housing

Selling a non-privatized apartment has its own nuances. You can read more in the article here

Let's try to figure out why to privatize the apartment. Let us outline the main goals that people pursue when submitting documents for privatization.

It is important for many to receive moral satisfaction. Previously, they did not have such a large property, but then they became full owners of the apartment.
Gain the opportunity to freely manage housing. It is allowed to bequeath, sell, or donate a privatized apartment. There is no need to register a person in it - he will be quite able to remain registered in another place.
A significant part of people are starting to prepare documents for privatization because they are already planning to sell this housing.
There is a serious misconception: at one time, controversial information was disseminated about the high risks of living in public housing, as it was mistakenly assumed that people could easily be evicted from it. The process of eviction from a municipal apartment is very labor-intensive, and the number of eviction cases is minimal. When discussing eviction for debts, it is necessary to remember that it is now allowed to evict people from their own apartments by putting their housing up for auction.
Many people continue to submit documents due to the proximity of the deadline for free privatization. The problem of the thoughtlessness of such a step relates to the pros and cons of apartment privatization in 2021. It is impossible to be guided by such reasons in such a serious matter.

You can see in studies on the topic that people privatize apartments to rent them out. The desire to obtain rent benefits is not at all connected with the privatization procedure. Not everyone draws up lease agreements with the corresponding legal procedures.

Getting property at minimal cost looks very tempting. It is important to remember about the burden of responsibility that falls on the shoulders of the owner, as well as to identify a large number of pitfalls.

Negative aspects of privatization

The privatization procedure for municipal housing has the following negative aspects:

increase in utility bills. This is due to the fact that when living in a municipal apartment, a citizen does not pay for current and major repairs of housing. These costs are borne by the owner – the municipality. After registration of ownership, utility bills will increase significantly, so you need to assess your capabilities regarding monthly expenses;
a citizen who privatizes housing will have to pay property tax. This is a mandatory annual payment, which from 2017 in 72 regions of the country will be calculated based on the cadastral value of the apartment. Previously, the basis for taxation was the inventory price of the home, which is significantly lower. After privatization, payment of property tax will fall entirely on the shoulders of the owner;
if privatized real estate acts as collateral with a credit institution, and the borrower does not repay the debt, it can be seized and sold at auction. This option is possible even if the apartment is the citizen’s only home. Municipal property cannot be mortgaged, and therefore it is impossible to lose it in this way;
a citizen will not be able to improve their living conditions for free. All costs for repairs and restoration of housing after a fire or flood are borne by him. If an apartment building is declared unsafe, the homeowner will be able to receive an apartment of similar area, but not cost;
Citizens living in municipal apartments are much less likely to become victims of scammers. Since the state is the owner of the property, it is extremely difficult to take it away during the implementation of an illegal scheme.

The main disadvantage of privatization is precisely the increase in housing maintenance costs, so living in an apartment owned by the municipality is beneficial to low-income categories of citizens. Another solution for older people would be to obtain ownership of an apartment and enter into a lifelong maintenance agreement with dependents, under which they will be paid a certain amount for current expenses in exchange for real estate.

Procedure for registration of privatization and necessary documents

Having decided on the need to privatize an apartment, it is necessary to find out who has the right to participate in the procedure. According to the law, persons who have permanent registration on its territory have the right to obtain ownership of housing. Also, the responsible tenant must have a social tenancy agreement or a warrant for the apartment. Persons who have permanent registration in the housing space, but do not temporarily live in it, also have the right to participate in privatization if:

they are in prison,
serve in the army,
work on a rotational basis.

If a person who has the right to participate in privatization is partially or completely incapacitated, a legal representative must act in his interests. This rule also applies to minors. In this case, the legal representative only protects the interests of the ward; he does not receive ownership rights to the housing.

Next, it is necessary to obtain the consent of all persons who have the right to participate in the privatization of this living space. If any of them refuses, it will not be possible to obtain ownership of the property. Persons who agree to the procedure, but do not want to receive a share, must issue a notarized refusal. In this case, they will not become owners, but will retain the lifelong right to reside in the living space.

After receiving permission, you need to collect a package of documents and contact the competent authority with an application for privatization. The following papers will be required:

social tenancy agreement or order for an apartment;
passports of all persons entitled to participate in privatization. If a citizen has not reached the age of 14, his birth certificate and the passport of his legal representative will be required;
technical passport for the apartment (issued at the BTI or other organization that has the right to conduct an inventory of the building). The costs of obtaining this document are borne by the persons privatizing the apartment;
floor plan of the building;
extract from the personal account of the apartment;
an extract from the Unified State Register for the apartment (it is not necessary to submit this document, but it can speed up the procedure);
certificate in form No. 2 from the BTI;
a notarized waiver if someone does not want to receive ownership;
receipt for payment of state duty.

Documents are submitted to the Department of Housing Policy and Housing Fund under the administration of the locality. After receiving a positive answer, you should contact the Privatization Bureau. All participants will be issued certificates confirming their rights. Next, citizens submit an application to the Rosreestr office or the MFC and register their ownership, after which they become the full owners of the property.

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Conditions and grounds

There are a number of mandatory conditions, subject to which the process becomes possible:

Tenants of state (municipal) housing have a social tenancy agreement or warrant;
transfer of ownership is possible only for those square meters specified in the lease agreement, even if a person has been freely exploiting neighboring premises for a long time, he will not be able to privatize them;
Participants must have permanent registration in the apartment being re-registered;
citizens have the chance to exercise the right to free appropriation of square meters only once in their life, with the exception of persons who have already completed the process as a minor (after 18 years of age they can take part in privatization again).
the tenant has the right to refuse to participate in privatization, after which he gets the opportunity to live in this apartment for life;
The procedure can only be initiated with the voluntary consent of all residents registered in the apartment at once.

Advantages of privatization in shares

Today there are several options for the privatization of municipal housing. One of them is shared privatization. When completing this procedure, the property has not one, but several legal owners, for each of whom a portion of the living space of a certain size is allocated.

Advantages of shared privatization:

The size of the share is determined by the judicial authority, which eliminates unnecessary disputes. This is usually practiced in the event of a divorce. If privatization was previously carried out in shares, the need to go to court disappears by itself.
Any transaction without shared privatization can only be carried out with the consent of all co-owners of the apartment. Shared privatization relieves them of the need to coordinate their decisions and actions with other shareholders.
The owner of a share of real estate has the right to sell his part to any individual, but with the first right of purchase by other co-owners. In fact, this is not at all an obstacle, as it might seem at first glance, since after the official notification of the intention to sell his share, the owner waits only a month. After that, he can sell the property to anyone, regardless of anyone's opinion.

Features of the procedure

The law regulating privatization assumes that it is free. The only costs will be to purchase documentary forms and pay for notary services.

At present, the main provisions of the legislation approved in 1992 remain relevant. The registration process has not changed, the only thing that should be taken into account is the time period within which you need to meet if you want to get your own property. Let us take a closer look at the period of time for which the state established privatization.

Is it worth privatizing an apartment?

Before making a choice related to the privatization of an apartment, you need to know the pros and cons of the privatization process itself and the consequences.

On the one hand, a privatized apartment in the future can be sold, exchanged, and benefited from various transactions, but on the other hand, such an apartment requires increased costs . The homeowner will pay real estate tax , which, in turn, has increased significantly due to its calculation based on the cadastral value of real estate, as well as incur expenses in connection with major repairs in an apartment building .

A citizen owner does not have the right to improve living conditions, unlike a tenant, and if he wants to change his apartment to housing with a larger area, this will be at his expense.

Low-income citizens may face financial problems in the future if they want to privatize their housing, so all the circumstances should be analyzed before resolving this issue.

Elderly pensioners living in municipal housing also have the right to privatization. In this case, citizens will be able to bequeath this housing to their children or grandchildren.

But there are also negative aspects : if suddenly the apartment is destroyed as a result of a flood, fire or other disaster, the state will not provide new housing. The owner of a destroyed home must take care of restoring the apartment himself.

We analyze the positive aspects of housing privatization

Privatization implies the transfer of not only rights, but also responsibilities, including responsibility for damage caused to neighbors and payment of taxes. In this regard, it is recommended to study all the pros and cons of privatization at the decision-making stage in order to avoid unpleasant surprises.

First, let's define the advantages of this procedure.:

An apartment or room becomes the full property of the resident citizens; it can be sold, rented out, donated, mortgaged or inherited;
Real estate received through privatization is not divided between spouses during a divorce if only one of them participated in it;
If not only the responsible tenant was registered in the municipal apartment, other persons also have the right to receive shared ownership;
In the event that someone refuses to participate in privatization, he retains the right of lifelong residence;
Once utility debts arise, owners will not be able to be evicted, as would be the case with a municipal apartment;
Impossibility to deregister the owner. It will not be possible to write him out under any circumstances.

Obviously, there are a lot of positive aspects to privatization, the most important thing is that a person can obtain ownership of real estate absolutely free of charge, the market value of which can be 10 or 20 million rubles. If the owner of such an apartment needs to get a loan from a bank, there is no doubt that if there is real estate, it will be issued many times faster and at a lower interest rate.

Pros of privatization

First of all, the main advantage of privatization is that the resident of a privatized apartment becomes a full owner . Having received this status, a person has the right to dispose of his property at his own discretion:

sell;
give;
exchange;
to rent;
pass on by inheritance.

In addition, the owner of such an apartment can register or deregister a person, arrange for the redevelopment of a residential premises receive a loan secured by a privatized apartment, etc.

It is worth noting that the privatization of an apartment can be cancelled, in other words, deprivatized .

This means that a citizen has the right to renounce ownership of an apartment and again enter into a social tenancy agreement with the state. But it is worth knowing that such a transaction can only be made once.

Unlike a non-privatized apartment, it is almost impossible to evict the owner for debts But you should know that in any case, you can collect the existing debt from the owner for utilities without certain problems in court, but it will not work to deprive the owner of the privatized housing itself.

If it happens that the house in which the privatized apartment is located is subsequently recognized as unsafe, then in exchange for the old housing the owner will be provided with another one of equal size.

Don't forget about the pitfalls

Despite the fact that the pros and cons of privatization are in unequal proportions, and the advantage of the procedure is undeniable, you must be prepared for not always pleasant consequences. First of all, we are talking about the fact that taking ownership of expensive housing leads to the appearance of tax obligations for the new owner. In accordance with tax policy in Russia, the higher the market value of housing, the more tax will be paid on it .

Many people think that if housing tax is paid once a year, then this is not a problem, however, for low-income families, the tax on a three-room apartment can be a serious test for their budget.

Some candidates for privatization are worried that in the event of a flood or fire in their apartment, all the costs of repairs and damaged furniture from their neighbors will fall on the shoulders of the owner. In the case of municipal housing, the state - the owner - would pay for everything, therefore, if the communications of the house are in poor condition, many may fear such consequences.

Among the expected consequences, we should mention the sensational fees in Russia for major repairs. It is the property owners who bear the burden of providing major repairs, even if their apartment is in a completely new building. If the apartment is in shared ownership, charges occur for each of them.

Disadvantages of privatization

The owner is responsible for privatized housing . If unexpected circumstances suddenly occur: a fire or flood occurs in a municipal apartment, then in this case the damage will be compensated by the state. If the apartment is privatized, the repair and restoration of housing will be the responsibility of the owner of the damaged residential premises.

Payment for real estate is also a big disadvantage during privatization - every year in our country the real estate tax increases, and the amount of contributions for the maintenance of housing and its repairs also increases.

elderly person lives in a privatized apartment and does not have financial support from relatives or other persons, then this may incur large financial costs for him. But if the housing is not privatized, then the state will pay for the costs of major repairs of the house.

26.4. Denationalization and privatization

Denationalization of the economy is one of the directions of reforming the modern national economy. In the specialized literature, the term “denationalization” is referred to as the process of eliminating the monopoly of state property. When the economy is denationalized, the process of transferring from the state to individuals or legal entities partially or completely the functions of direct management of business entities is carried out. Denationalization is considered as an important direction in the transition from an administrative-command to a market economy, strengthening the independence of commodity producers, saturating the market with goods and services, improving their quality, and eliminating the monopoly of state-owned enterprises. The goal of denationalization of the economy is to reduce the share of state ownership in the national economy, to end its totalitarian impersonality, to interest producers in the results of their labor, to increase production efficiency, and to produce competitive products. In this situation, the necessary level of independence and economic responsibility of producers will be ensured. In the process of denationalization, the following tasks are solved: • the foundations for the economic freedom of citizens are formed. This can be achieved by granting them property rights, creating a private sector of the economy, forming joint-stock companies and rental enterprises; • the functions of public administration are differentiated from the functions of direct management of production and economic activities, which are transferred to producers; • economic responsibility of commodity producers for the results of their production and commercial activities is ensured. Strengthening the economic responsibility of commodity producers creates incentives to use innovations, which leads to increased production efficiency; • the monopoly of states in industrial and commercial activities is destroyed and a competitive environment for commodity producers is created; • government spending on supporting low-profit and loss-making enterprises is being reduced. The freed-up budget allocations, for example, can be used to develop social programs that improve people's living standards. Denationalization of the economy, as a rule, is carried out in two directions: by limiting state intervention in the economic activities of an enterprise; through denationalization of property (Fig. 5.1). The essence of the first direction is the transfer of the main part of management functions from government bodies to enterprises and other objects. However, this direction is not effective enough, since it does not change the basis of economic relations - property relations. Limiting the influence of the state on the economic activities of enterprises can be achieved by reducing the size of government orders, liberalizing prices, developing horizontal connections between enterprises, as well as rental relations. The essence of the second direction is the process of creating a multi-structure economy. It can be carried out both by organizing new enterprises based on non-state

Rice. 5.1. Directions of denationalization of the economy

forms of ownership, and through the privatization of state-owned enterprises. The implementation of these ways of denationalization of the economy can be based on shareholder relations. For example, the creation of joint stock companies on a shared basis can be accomplished by issuing shares for the full book value of the enterprise and dividing them among team members, according to their labor contribution. To speed up the process of denationalization of property, state-owned enterprises are being transformed into enterprises of other forms of ownership, i.e. privatization. Privatization entails the recognition of the right of each employee to independently, at his own discretion, dispose of his property and use it for personal or other purposes. Both directions of denationalization of the economy and limiting state intervention in economic activity create the prerequisites for the development of entrepreneurship and the emergence of enterprises of various forms of ownership. Conversely, the denationalization of property is accompanied by a weakening of the influence of the state in the economic sphere. Thus, the denationalization of the economy is due to the need to transfer the national economy to market relations; when implemented, the impact of the state on the economic and commercial activities of the enterprise is reduced. Basic principles of privatization. Privatization is one of the main stages of the process of denationalization of the economy. Privatization (from the English private - private, individual) always means a change from the state form of ownership to private (private). Along with its traditional understanding as the process of transferring objects and certain types of activities from the hands of the state to private ownership, there is also a broader interpretation. According to the latter, this concept also covers the privatization of privileges, the monopoly of any right, the supply of services, the conquest of a certain market segment, or even the emergence of new, in addition to state, forms of management. Denationalization and privatization are close, but not identical concepts. Denationalization is a process of decentralization of the economy, overcoming the monopoly of state property. During denationalization, a portion of the property right—the right to use and the right of ownership—is transferred from the state to economic entities. Privatization is the process of acquiring state property for individual or collective use, i.e. private property. As a result of this, the state loses the right to own, use and dispose of property, and its bodies lose the right to directly manage them. It follows that privatization is the most radical way to transform property relations. Privatization is sometimes called the silent revolution that is conquering the world. In recent years, this process has covered more than 80 states. The main reason for the start of a large-scale privatization process was the crisis state of the economy, the recognition of the fact that a market economy is more effective than a command economy. The economic literature describes various stages of privatization. 1. Big privatization. Its essence lies in the fact that the state transforms large enterprises into joint-stock companies, and then shares are distributed among individuals. Methods of distributing state property range from selling shares at market prices to freely transferring "property" checks to the public, exchangeable for shares. This is one of the types of state control of the privatization process. 2. Small privatization. In its implementation, the state sells shops, apartments and other state property to private individuals or groups of investors. The previous stage of small-scale privatization may be the development of rental relations during the denationalization of the economy. 3. Spontaneous privatization. In this case, the state does not try to play a controlling role in the process of its implementation. The law of the jungle, or the criterion of primitive risk, applies here. As a rule, ownership rights are transferred to representatives of the nomenclature. Due to the lack of developed capital markets and regulatory mechanisms, this phenomenon usually occurs on terms that are very favorable to the new owners. The nomenklatura has the opportunity to bypass the problem of objective assessment of the value of privatized property and buy it back at reduced prices. 4. Partial property privatization means that instead of selling a unit of state property as a whole, the state can sell it to entrepreneurs in parts. This principle is possible not only when liquidating enterprises, but also in relation to profitable industries. 5. Property of labor collectives. According to the current legislation in the Republic of Belarus, the labor collectives of a given enterprise have preferential rights to state property. 6. Reprivatization of property is the return to previous owners or heirs of private property previously nationalized (confiscated) by the state. Taking into account the experience of privatization in other countries, the Republic of Belarus carries out this process based on the following principles: • compliance with the rule of law. In accordance with this principle, the state creates a legislative and regulatory framework. The privatization process in Belarus is regulated by regulatory documents, primarily the laws “On denationalization and privatization in the Republic of Belarus”, “On personalized privatization checks in the Republic of Belarus”, the State Privatization Program; • a combination of paid and gratuitous methods of privatization. This principle means that when carrying out privatization, paid forms of acquisition of state-owned enterprises by other owners should prevail. These forms of privatization, compared to gratuitous transfer, are economically more expedient, presuppose economic independence, genuine responsibility, and form a real owner. At the same time, fully paid privatization cannot be accepted from the standpoint of social justice, since state property created by the labor of all citizens of Belarus will be sold to a limited circle of people with initial capital; • the right of every citizen of the Republic of Belarus to a part of gratuitously transferred state property. This principle follows from the nationwide nature of state ownership. There are several possible approaches to dividing part of the value of state property: equally among everyone, in proportion to age, in proportion to length of service, in proportion to age taking into account work experience, etc.; • differentiation of methods, methods and procedures of privatization. The need to comply with this principle is caused by the presence of many incompatible privatization objects. This involves a flexible combination of general principles of privatization with differentiated use of methods and methods of privatization; • provision of benefits to privatization subjects. The meaning of this principle is that the preferential right to acquire state-owned objects should be given to the labor collectives of the enterprise, since one of the most important tasks of privatization is to increase labor activity and, on this basis, increase the volume and efficiency of production; • implementation of wide publicity during privatization. This principle involves media coverage of the conditions and progress of privatization, familiarization of citizens with the list of privatized objects; participation of representatives of trade unions and local legislative authorities in the work of privatization commissions; providing citizens with the opportunity to appeal to the court and other authorities in cases of infringement of their interests; • control over the implementation of privatization by the state. All privatization work must be under the control of both the state and public organizations. This will prevent violations of legislation and protect the interests of workers; • observance of gradualism and phasing. Fulfillment of this principle will allow organizing the privatization process at the proper level and avoiding mistakes in its implementation. When carrying out the privatization of state property, the following goals can be achieved: • increasing the efficiency of enterprises; • creating conditions for the formation of new economic relations built on a variety of forms of ownership; • development of a competitive environment and promotion of demonopolization of the national economy; • reducing government intervention in the economy; • formation of a layer of private owners; • freeing the budget from unnecessary expenses by reducing subsidies and limiting management and control costs; • activation or activation of capital raising mechanisms. In the process of privatization of state-owned enterprises, the following tasks are solved: • at the macroeconomic level, market principles in the economy are activated; decentralization of the economy is being carried out; the scale of state entrepreneurial activity is being reduced; the efficiency of the entire economic system increases; in times of crisis, the public sector of the economy is strengthened; • at the microeconomic level, the objectives of privatization are to improve the technical and economic performance of enterprises, free them from state over-centralization and bureaucratization, and provide the administration and labor collectives with the right to independently make decisions that correspond to their commercial interests. Privatization of state-owned enterprises is a complex process that requires a lot of preparatory work to assess the value of the purchased property, study the possibilities of redemption, justify and select methods and means of privatization. Methods and means of privatization. In the world, there are two main methods for solving the problem of property privatization - paid (paid) and gratuitous (free) (Fig. 5.2). The first method involves mainly the sale of state property to legal entities and citizens, as well as rent with subsequent purchase. Various forms of incentives and support for buyers can be used, including installments, discounts, and preferential lending.

Rice. 5.2. Methods of privatization of state property

The second method involves two approaches. First of all, the property of state enterprises and organizations is transferred into the ownership of the workers employed by them. The second approach is based on the division and gratuitous transfer of the main part of state property to all members of society in equal amounts, according to age and length of service. Each of the above privatization methods has both advantages and disadvantages. For example, privatization by the purchase and sale method ensures the operation of market laws, increases the owner’s interest in the results of labor, gives an anti-inflationary effect, provides the opportunity to choose a buyer, and contributes to the financial recovery of the economy. To ensure that privatization does not turn into a way of legal and excessive enrichment of a few when the population and enterprises have limited funds, the implementation of gratuitous transfer of state property causes a reduction in social tension in society, expands the circle of potential owners in various sectors of the economy, and makes it possible to compensate for losses from unemployment and rising prices , and is also a quick way to divide and transform state property into private property. Taking into account the features of the two above methods, in the Republic of Belarus it is recognized that the privatization process should be carried out in the following ways: by purchasing leased property; sale of shares owned by the state; sales of property of state-owned enterprises through competition and auction; based on the gratuitous transfer of part of state property to citizens. The success of privatization largely depends on the attitude of the state to this process. Therefore, the legislation of the Republic of Belarus provides for the establishment of the following guarantees for labor collectives privatizing state property: • the activities of the enterprise cannot be suspended for the period of preparation and implementation of privatization; • until privatization is completed, the state bears responsibility for obligations arising from labor relations. From the moment of completion of privatization, these obligations pass to the new owner. He fulfills them before the expiration of the previously established period of validity of the employment relationship. After this, the relationship between employees and the owner is regulated by current legislation; • if the enterprise is privatized by a third-party buyer, the new owner is obliged to redeem the checks of the members of the labor collective if they request it. Thus, the implementation of privatization makes it possible to create a non-state sector of the economy, which in the future can help bring the economy out of a crisis.

Benefits Issues

Privatization is not beneficial in the following cases:

poor financial situation;
receiving subsidies from the state;
the family plans to live in the premises and has no plans to buy a new one;
low liquidity of the received object;
the possibility of obtaining housing of larger area or prestige.

Often the objects of privatization are rooms or communal apartments that are not in demand on the real estate market. The low cost of such objects and the difficulty of finding a buyer often complicate the sales process. It is impossible to rent out such housing for decent money.

After privatization, the owner of the apartment will be required to pay property tax. The amount for a person with low or no income can be significant. In this case, it is more profitable for a single person or a low-income citizen to live in an apartment provided to him under a social tenancy agreement.

Financial benefits are also associated with the following points:

the amount of payment for housing and communal services in non-privatized apartments is an order of magnitude lower;
there are no costs for major repairs and maintenance of housing;
the opportunity to reduce the burden on the family budget through subsidies.

Only apartment residents can apply for non-privatized housing. For further residence, you do not need to prepare a lot of documents and go through the inheritance procedure. In the case of private property, after the death of one of the owners, there are many claimants, which often ends in litigation.

What and how much will you have to pay for in a privatized apartment?

Let us again turn to the law of the Russian Federation “On the privatization of housing stock in the Russian Federation” dated July 4, 1991. According to it, every tenant of a municipal apartment has the opportunity to register ownership of it (free of charge and only once in a lifetime).

The monthly payment for a privatized apartment consists of the following items:

The cost of maintaining a living space.
Overhaul fee.
Tax on an apartment, calculated from its cadastral value. In Moscow, the rate is calculated according to a progressive principle: the more expensive the apartment, the higher it is.
Utility payments according to meters and general expenses of an apartment building (on the same principle as for municipal apartments).

For calculation, we will take an apartment similar to a municipal one - Moscow, 80 sq.m., a house with all amenities, second floor. So, for a privatized apartment you will pay:

For the maintenance of residential premises: 30.49*80=2439.2 rubles.
The contribution for major repairs is 18.86 rubles per sq. m. meter per month. That is, for an apartment of 80 sq.m. you will pay 1508.8 rubles.
Let's say our hypothetical apartment is 80 sq.m. costs 9 million rubles. You will have to pay 0.1%, that is, 9,000 rubles per year. This amount is divided among all owners. If you divide this amount by 12 months, you get 750 rubles per month.
Total: 2439.2+1508.8+750= 4698 rubles per month plus utility bills at tariffs in accordance with metering devices.

It turns out that for a privatized apartment with an area of 80 sq.m. A monthly fee of RUB 4,948 is charged. plus utilities.

Positive and negative aspects of apartment privatization

The citizen privatized the apartment in his own name. He got married and then divorced. Problems with the division of such property are unrealistic. The Family Code of the Russian Federation establishes the sole owner of the residential premises - the one who transferred the apartment to the category of property before the conclusion of the marriage relationship. Otherwise: the apartment cannot be sued in a divorce.
The full owner of his home is the one who has completed the privatization process. Those who managed to do this before 2010 won: the transfer to the category of their own housing was free. You can dispose of the apartment at your own discretion: we are talking about sale, exchange with an additional payment, will, donation, rent.
The full owner of a residential property has the right to receive a loan or credit from banking organizations if the apartment serves as collateral.
According to the Housing Code of the Russian Federation, the state has the right to evict debtors for utility payments. We are talking about non-privatized housing. The maximum they will do to the owner who defaults on the use of gas and electricity services is to turn it off until the debt is repaid.

Disadvantage: A privatized apartment, which acts as collateral for loans received, in the event of insolvency of the home owner, the lender has the right to confiscate.

Possible risks

Many citizens do not risk entrusting the paperwork for the privatization of residential premises through third-party organizations, due to widespread rumors about real estate fraud by realtors.

It is worth considering that the legal procedure for privatization on the basis of a power of attorney completely eliminates the possibility of an incorrect conclusion of a transaction.

The agreement clearly stipulates the authority of the agent and his non-involvement in a specific property in terms of ownership and the possibility of its sale.

In any case, only a person entitled to do so by law can become the owner. It is impossible to include persons who are not involved in real estate in the agreement under any circumstances.

The power of attorney is drawn up by a notary and can only contain those powers that the tenant of the residential premises will voice. In addition, only citizens registered in the apartment have the right to receive a share in the apartment.

Employees of government agencies where real estate is registered carefully check the papers.

Presented for the deal. Information about the transaction is entered into state registers, so the risk of losing real estate during registration is almost zero.

Disadvantages of shared ownership

There are also some drawbacks here:

After the sale of the privatized share, other co-owners may go to court with a demand to declare the transaction illegal, so it is important to comply with all the terms and rules of this procedure;
The emergence of conflicts between co-owners, which arise in the form of obstacles when selling part of the property to other persons. However, an experienced notary can help deal with this situation;
Shared privatization, in comparison with ordinary privatization, somewhat limits freedom of action. This is due to the relationship between co-owners, who are often capable of very unpleasant tricks and obstacles when registering new residents;
The presence of equal rights for each owner, regardless of the size of the ownership share, which is also often the cause of disputes and conflicts;
Some similarity with communal living space.

It can be noted that almost all the disadvantages of shared privatization are associated with the human factor much more than with legal nuances. Therefore, it is difficult to answer unequivocally about the benefits, because situations are always individual.

To privatize an apartment or not: legal advice

Statistics show that over 85% of all housing in Russia has already been privatized and is in use. The rest of the apartments are still listed in the state and municipal funds. Probably, some people still doubt the decision to privatize housing.

Useful tips from the site’s lawyers:

If the tenant of the property is a single pensioner who has no relatives or does not want to bequeath his property to them, there is no need for privatization. Otherwise, you will have to pay utility bills at a high rate + pay an annual property tax.
If a family lives in a dilapidated or dilapidated house, they need to wait for the administration’s decision to resettle the residents. Most likely you will be provided with a new, more comfortable living space. So it can be privatized - the basis will be the same social tenancy agreement.
If you want to privatize a service apartment, you will have to transfer the housing to the balance of the municipality. Of course, this requires obtaining the consent of the department or organization. If they allow such a transfer, the housing will go to the municipality, and you will be able to register it in the usual way.
If you live in a municipal apartment, but want to improve your living conditions, you can privatize the living space for the purpose of selling it. Or try to sell non-privatized housing (see “Sale of non-privatized apartment”).

Let's summarize:

Privatized housing is apartments taken out of the municipal fund in favor of citizens.
Non-privatized housing is on the balance of the state, and people use housing without ownership rights.
The main advantage of privatized housing is that it belongs to the person. Such an apartment can be easily sold, donated, bequeathed... But there are also disadvantages - the costs fall on the shoulders of the owner.
The advantage of a municipal apartment is the absence of large expenses for major repairs and taxes. Residents only pay utilities.
If you want to privatize your home, consider the pros and cons.

General provisions

The cost of residential real estate today is particularly high. Therefore, it will be quite problematic to obtain it on your own, without outside financial assistance.

One way out of such a difficult situation is to formalize privatization.

This process of obtaining personal ownership of real estate is completely free of charge - only minimal expenses are required for paperwork.

But first you will need to carefully study a number of subtleties related specifically to the privatization process. What exactly is such a process, and where to go.

Today, all issues related to privatization are covered in sufficient detail in special legislative norms. A careful study of these will make it possible to avoid a variety of difficulties.

Knowledge of the law will allow you to independently monitor compliance with your own rights.

What it is

Relatively recently, even before the collapse of the union of states led by Russia, private property was virtually absent. All real estate, without exception, belonged to the state.

Nevertheless, there were many different options for getting real estate for personal use - an apartment or something else. The main thing was the conclusion of a social tenancy agreement.

After the collapse of the USSR, such documents remained fully valid. That is why in the future it became possible to carry out the privatization procedure.

This process is a transfer of real estate from one form of ownership to another - from municipal, state to private.

At the same time, privatization in today's Russia has a number of certain features that characterize it:

The state necessarily acts as one of the parties.
It is necessary to fulfill a number of requirements for real estate and the person applying for privatization.
The procedure itself is carried out free of charge.

The question often arises: is it worth carrying out privatization at all if you can simply use the property and not pay property taxes? It is important to consider that privatization as such has pros and cons.

It plays an important role in the economy of the state. It should also be taken into account that relatively recently it was planned to make the privatization process completely paid.

Compensation implied payment of privatization to the state treasury for real estate. The cost had to be comparable to the market price.

This bill was supposed to be adopted on March 4, 2021, but at the initiative of the President of the Russian Federation, paid privatization was cancelled. Gratuitous privatization has been extended for an unlimited period of time.

Who falls under the category

The privatization process itself can only be carried out by citizens who meet certain requirements established at the legislative level.

The standard ones include:

citizenship;
residence and registration in a specific residential property;
participation in a social rental agreement;
the person applying for privatization did not previously take part in such a process.

Moreover, it is necessary to take into account that privatization can be of different types - federal, state and regional.

In the second case, the requirements for persons applying for privatization may differ slightly. Since this issue is addressed in special regional legislation.

If the privatization process must be carried out in a standard way, then one of the fundamental factors is precisely the presence of citizenship of the Russian Federation.

In the absence of this, even if all other factors are met, privatization will be impossible. You will also need to confirm your permanent residence permit and residence in the residential area.

There may be some exceptions to this last point. This only applies to certain cases that are established by law.

The list of these includes:

Indicators	Description
A citizen is undergoing military service	in the ranks of the Russian Armed Forces
Official employment takes place	in the Far North region and work is carried out on a rotational basis
The citizen is in prison	the ability to live at the place of registration is limited by law

In all other cases, it is obligatory to live in the real estate in the privatization of which the citizen wishes to participate. A separate issue is participation in a social tenancy agreement.

But even if a specific citizen is not designated in such an agreement, it will be possible to include him in it. To do this, you only need a corresponding statement from the responsible tenant.

The main condition for participation in privatization is that the procedure can only be carried out once during a lifetime.

Accordingly, if a citizen previously took part in privatization in some way, then it will no longer be possible to do so again.

There is only one exception - this applies to citizens who first participated at the age of less than 18 years. In this case, privatization can be carried out again, after reaching adulthood.

Moreover, minor citizens, on an equal basis with others, if all basic conditions are met, should participate in privatization. But their interests must be represented by legal representatives.

These are usually:

Parents, adoptive parents.
Guardians, trustees.
State authorities – on whose balance the child is.

To privatize on behalf of the child, you will need to obtain consent from the guardianship and trusteeship authorities.

The situation is similar with persons declared legally incompetent. They also have the right to participate in privatization, but again only through a legal representative.

It is important to take into account that violation of the rights of minors or incapacitated people allows the privatization deal to be canceled through the court.

Where to go

The advantages of privatization for the state consist only in reducing social tension due to the provision of housing to the population.

There are no alternative benefits, since privatization is completely free. To implement such a procedure, you will need to collect a fairly extensive list of documents.

It may vary depending on region and other factors. To collect them, you will need to contact a fairly extensive list of institutions.

The standard list of institutions that will need to be visited includes:

a municipal institution on whose balance sheet specific property is located;
Bureau of Technical Inventory;
a management company engaged in servicing a specific residential building;
notary;
Rosreestr;
court.

The question of the very possibility of privatization is resolved by submitting an extensive list of documents to the body on whose balance sheet the specific property is located.

Usually this is the local administration, others municipal. It is he who makes the decision about the very fact of the possibility of privatization.

An alternative is to submit all necessary documents to the Multifunctional Center. It is also referred to as MFC, “My Documents”. It works on the one window principle.

An important document is the technical and cadastral passport. If there is none, it can be issued at the BTI - Bureau of Technical Inventory.

Also, if there was previously a redevelopment, it will need to be legalized. To do this, you will also need to visit the BTI.

What methods of privatization are available can be found in the article: methods of privatization in 2020. If you are interested in the question of how the privatization plan is being developed in the Russian Federation, read here.

The property must be free of debts on utility bills. This condition must be confirmed by a special certificate.

You can get it from the management company that maintains the house. Some types of documents will need to be notarized. To do this you will need to visit a notary.

Accordingly, his services must be paid for. After the corresponding decision regarding privatization has been made, it is necessary to submit documents to Rosreestr. In this way, the registration of ownership will be carried out.

And this must be done. Otherwise, the privatization process will not be completed. In some cases, it is necessary to go to court to carry out such a procedure.

The list of situations where a court decision on this matter is strictly mandatory includes:

Indicators	Description
There are debts	for payment of utilities
Any of the citizens entitled to privatization	does not want to formalize consent or refusal; is missing
Housing is recognized as unsafe	—

It often happens that for some reason it is impossible to independently engage in the privatization process.

In this case, you can simply transfer all powers to carry out such a procedure to third parties for a certain amount of money.

Today, a fairly large number of institutions provide this type of service. Before contacting any particular one, you will need to read the reviews. Because there are a lot of scammers working in this area.

How many apartments can one person privatize?

Every person who lives in an apartment on the basis of a social tenancy agreement has the right to acquire this living space as his own property through privatization. According to the law, housing can be privatized only once . But minor citizens can take part in privatization again register another municipal property upon reaching adulthood .

If those registered in the apartment own another residential premises, this does not serve as a restriction on participation in the privatization process. All citizens living in housing under a social tenancy agreement have the right to one-time privatization, regardless of the number of their own square meters.

family members of the tenant of the premises and citizens who do not have family relations with the tenant, but are registered participate in the registration of ownership of the apartment.

Other rights and obligations of family members of the tenant regarding the occupied residential premises are contained in Art. 69 Housing Code of the Russian Federation.

Legislative regulation of housing privatization

Privatization of housing involves obtaining the right to own living space used under a social rental agreement with the municipality. Legislative regulation of privatization is carried out:

Law No. 178 “On the privatization of state and municipal property”;
Law No. 1541 “On the privatization of housing stock in the Russian Federation.”

It is important to take into account that Article 217 of the Civil Code establishes the priority of the norms of privatization laws over the norms of civil legislation.

Privatization is possible only in relation to municipal apartments and rooms, without taking into account premises in dormitories and service living space, but legislative acts of the constituent entities of the federation have the right to allow the privatization of service apartments at the discretion of the owners of the housing stock (Article 4 of Law No. 1541).

Arbitrage practice

Each privatization case is considered by the court on an individual basis, but when starting a legal battle with the state, be prepared to present indisputable evidence that you are right.

If you have never encountered such legal disputes, be sure to enlist the help of an experienced lawyer.

It will not be possible to quickly defend violated rights; as a rule, litigation lasts from one and a half to two months. However, most often the court sides with the plaintiffs.

If you have any questions regarding the privatization of an apartment, you can contact the lawyers of our website in any convenient way, and they will provide free advice.

Let's sum it up

To summarize, let’s highlight what Russians need to know about the privatization procedure:

The apartment, which is currently used under a social rental agreement, can be privatized in 2021.
The apartment privatization procedure is the process of re-registration of real estate from municipal property to private property.
Russian legislation provides the opportunity for all citizens to undergo the privatization procedure once free of charge.
This procedure applies to apartments that were registered under social tenancy agreements before 2005. You cannot privatize an apartment that is not suitable for permanent residence.
To register ownership of an apartment, you must first collect a set of supporting documents, submit them for verification to the current owner, the municipality, and sign an apartment privatization agreement.
You must first obtain consent to privatization from all registered persons or an official refusal from them. If someone refuses to undergo the privatization procedure, you will have to try to convince them that this procedure will bring them benefits, or go to court.
The procedure for final registration of ownership of the apartment is carried out in Rosreestr. The basis for this is the privatization agreement signed with the municipality.

Disadvantages of privatization

Privatization is not beneficial for all segments of the population. The main disadvantages of privatization include:

increase in the volume of utility payments;
loss of the opportunity to exchange housing under the housing improvement program;
increase in tax burden.

According to clause 1.1 of Art. 154 of the Housing Code, living in a non-privatized apartment belonging to the social fund does not pay for house management services to the housing association, as well as for the supply of utilities. The monthly contribution consists only of the rental fee (ranging from 100-300 rubles), as well as payment of utilities.

In addition, tenants of municipal housing do not pay contributions for major repairs, regardless of the fund to which such housing belongs .

A municipal apartment can be exchanged for a larger one in a given locality for free if the amount of space occupied by each registered resident is less than 15 square meters. m, and a privatized apartment can only be exchanged with an additional payment on a commercial basis.

Many regional programs allow tenants of small municipal apartments to receive a housing subsidy, the right to which is lost upon obtaining ownership of the housing.

It is important to take into account that if, in addition to the rented municipal apartment, the tenant owns another living space, then after registration of ownership of the second apartment you will have to pay real estate tax.