Up Again Russia: Premises and Workplace

Employment

1. What are the key things that employers have to consider in relation to social distancing in the workplace, e.g. open plan or spacing of desks, use of shared equipment, limited access to communal facilities, canteen / restaurant, etc.?

In order to curb the spread of COVID-19, Rospotrebnadzor has issued the following recommendations:

  • dividing workflows and teams by placing employees on different floors or in separate offices, and by organising work in several shifts
  • organising visits to the canteen/restaurant in teams from workshops, sections and departments at strictly defined times according to an approved schedule (where there are centralised meals for workers)
  • if there is no canteen/restaurant, prohibit eating at workplaces and allocate a specially allocated room or part of the room for this purpose with a sink for washing hands and a dispenser for treating hands with antiseptic

Rospotrebnadzor also issued recommendations on certain sectors of the economy. In particular, they affect the following sectors: trade in non-food products; car maintenance; and the construction industry.

2. What key hygiene and/or infection prevention measures will employers have to take to ensure a safe workplace e.g. provision of adequate handwashing facilities, regular deep cleaning of offices, etc.?

In order to curb the spread of COVID-19, Rospotrebnadzor has issued the following recommendations:

  • carry out the daily (shift) wet cleaning of rooms and common areas, and disinfect contact surfaces every two to four hours
  • regularly ventilate work rooms
  • provide at the workplace a stock of disposable masks, as well as disinfectant wipes, hand sanitisers, disinfectants, and gloves
  • organise a survey and examinations of workers for signs of respiratory diseases by taking body temperatures during the working day
  • establish an entrance regime with the measuring of body temperatures

Rospotrebnadzor has also issued recommendations on certain sectors of the economy. In particular, they affect the following sectors: trade in non-food products; car maintenance; the construction industry.

State authorities at regional level may establish additional requirements. For example, in Moscow, from 1 June it is required that COVID-19 tests are conducted every 15 days for at least 10% of employees, and to ensure that all employees are tested for COVID-19 antibodies.

Real Estate

3. Are there any specific obligations, liabilities or duties of conduct imposed on landlords, tenants or visitors with respect to the use or re-use and decontamination of premises; care, cleaning and maintenance of the exclusive and common areas; reporting requirements and/or measures in case of identified infections; health and safety issues - e.g. recommissioning water systems to avoid virus, installation of plexiglass screens, moving desks to comply with distancing. remodulation of fire prevention strategies (entrance/exit routes)? Is any distinction made between asset classes?

Russian regions are gradually cancelling the restrictive measures imposed to curb the spread of COVID-19. For instance, in Moscow the relevant restrictions were cancelled in three stages with cancellation for the most part by 23 June.

There are various requirements for the organisation of working spaces and rules of operation applicable to various businesses resuming their normal activities (such as retail, beauty salons, catering, and offices). These requirements and rules are established on federal and regional levels and include social distancing restrictions between employees and visitors (1.5-2 metres), air and surface disinfection requirements, and requirements for measuring body temperature of employees. Each business must implement a set of measures appropriate to its specific activity to ensure the safe return to business.

As a general rule, tenants are responsible for the leased premises and the operations inside those premises, and landlords must ensure the maintenance of common areas and infrastructure servicing a building.

In addition, certain requirements are imposed on the general public. For example, individuals must wear masks and gloves in public places (e.g. shops, public transport).

4. Are there any rent suspension measures and/or stay of recourses and actions (including eviction) or any Government support initiatives such as a furloughed building grant scheme (if so, maybe only a part of the building should be re-occupied)? When rent suspension measures are available, what is the usual payment mechanism and timing agreed to by the parties?

A number of measures were introduced at federal and regional levels to support tenants. These measures are primarily addressed to small and medium-sized businesses that have suffered most from the COVID-19-related restrictive measures (such as catering, beauty salons, fitness clubs, entertainment, catering and tourism). However, some measures apply to all tenants, not just to these types.

The application of support measures depends on whether the leased property is owned by the state, a municipality or a private owner, though there are some measures that apply regardless of the owner of the leased property.

The support measures include:

  • rent concessions;
  • lease term extensions;
  • the right to claim rent reduction and even terminate a lease without having to pay compensation to a landlord; and
  • rent payment deferrals.

For more information, please see our recent legal updates here and here.

5. Are there specific tax reliefs on payment or collection of rent instalments? Do they apply subject to actual payment or regardless? Do they apply generally or only to specific asset classes?

The Russian government recommended regional and municipal authorities grant property tax concessions and certain other support measures to landlords who provide their tenants with rent payment deferrals. The corresponding measures have already been adopted in some regions.

6. Are there any measures regarding relief from the performance of real estate-related contractual obligations?

Apart from the supportive measures discussed above in question 4 for tenants, relief from liability has also been granted to developers of residential property who are late in performing their obligations under a special type of sale and purchase agreement – a shared construction agreement (dogovor dolevogo uchastiya v stroitelstve). This agreement allows apartments in a residential building under construction to be purchased. The purchasers under these agreements are also released from liability for a delay in payment obligations. For more information, please see our legal update.

In addition, depending on the circumstances, parties to real estate-related contracts can rely on the general provisions of Russian civil legislation to claim relief from liability for the non-performance of an obligation or the suspension or termination of the performance of an obligation (e.g. force majeure, significant change of circumstances).

7. Are there any credit facilities in place to mitigate loss of income for landlords?

The Russian government’s measures do not introduce any special facilities designated to mitigate the impact of the COVID-19 for landlords. However, bank loans at reduced rates can be provided to small and medium-sized enterprises (SMEs) for up to three years for any purpose (including lease payments). The interest rate may not exceed 8.5%.

8. Is there any relief from loan repayments / enforcement of loans secured against properties?

SMEs operating in the most affected sectors may apply for credit holidays introduced by recent federal law. These measures cover, among others, loan agreements secured by mortgage. Credit holidays allow for suspension of payments under the loan agreement for up to six months. During this period, the lenders are not allowed to impose measures against the borrower for the improper fulfilment of its obligation to repay the loan including foreclosure on a mortgaged property that secures obligation under the suspended loan.

9. Are public services necessary to complete the sale, acquisition or other operation of real estate assets or companies or to establish the right to open for business (planning authorities, notary public, Land Registry, Companies’ Registry, etc.)?

There are several authorities that perform public services required to enter into transactions in respect of real estate. The main authority performing these services is the Federal Service on State Registration, Cadastre and Cartography. Certain transactions in respect of real estate are also subject to notarisation. In addition, there are authorities in charge of issuing planning and construction permits.

Throughout the COVID-19 pandemic, the authorities referred to above and notaries continue to operate offline and online (see question 10 below for more details) with certain limitations. However, due to the phasing out of COVID-19 restrictions in most regions, most authorities have resumed their normal operations.

10. Are there any specific processes or protocols available to consummate real estate operations enabling them to comply with any required social distancing (e.g. electronic signature, etc.)?

Russian authorities had been actively establishing and promoting various online services even before the COVID-19 pandemic started. These services include online applications for the state registration of transfers of title to real estate and transactions with real estate rights. For such applications, it is necessary to purchase a protected electronic signature from an authorised organisation. Recently, it has also become possible to obtain certain public notary services online, including the notarisation of transactions.

After the pandemic started, online services continued to be provided and in some Russian regions such services have become the sole available option (e.g. in Moscow).

Further, because of the COVID-19 pandemic, the list of real estate-related online services has been expanded and now includes services like online consultations with representatives of the Federal Service on State Registration, Cadastre and Cartography in some Russian regions.

After the resumption of normal operations of state and municipal authorities it has again become possible to use their services offline and online.

11. Are contractors who were carrying out works within the premises obliged to resume them? Can building sites reopen when they were closed down? Are there any specific provisions in relation to certain asset classes authorising continuation / resumption of works (e.g. healthcare structures)?

During the COVID-19 pandemic there are no unified rules on the performance of work and operations in various types of premises throughout the entire territory of the Russian Federation. Each Russian region is authorised to introduce its own rules. As a result, in some Russian regions severe restrictions have been imposed, while in others various activities, including construction, have never been completely stopped. However, presently most restrictions have already been cancelled.

Certain sanitary requirements have been adopted for the construction industry (e.g. shift work, measuring body temperature of workers, regular wet cleaning of offices, and air disinfection requirements).

12. Are there remedies or contractual arrangements available to address impossibility or delay for a party to handover premises to another which are/were to be constructed or refurbished, or for such other party to take over those premises?

No specific rules were introduced in Russia to address possible delays in the performance of obligations under construction and similar contracts. Therefore, one should rely on the general provisions of Russian law. There are currently debates as to how these rules should apply to various situations. The Supreme Court has already issued a number of clarifications in this respect. Such clarifications include guidelines on the application of force majeure rules that in certain circumstances may release a contractor from liability for a delay.

13. Has the duration of validity of administrative authorisations pertaining to development/construction of real estate assets (in particular planning authorisations) been extended?

Pursuant to Resolution of the Russian government No. 440 dated 3 April 2020, certain documents pertaining to the development/construction of real estate are automatically prolonged. In particular, construction permits set to expire within the period from 7 April 2020 to 1 January 2021 are automatically prolonged for one year from the date of their expiry. Further, the term of using certain other town-planning documents (land plot development plans and site plans) are also automatically prolonged for one year if they expire within such period.

For more information, please see our legal update.

Litigation and Regulatory

14. Is the use of disclaimers for visitors or others coming on to the site of business useful for limiting potential future COVID-19 claims?

Under Russian law, the use of disclaimers as such will not result in release from liability.

At the same time, disclaimers may be used to argue that the entity/individual took the necessary measures to comply with the sanitary and other regulations and that the visitor is duly notified of such measures.