FAS AMENDMENTS ON EXTENDING CONTRACTS FOR STATE PROPERTY LEASE CAME INTO EFFECT

Renewing lease contracts for public property with bona fide lessees will take place under Part 9 Article 17.1. of the Federal Law “On Protection of Competition” regardless of the date and form of concluding the primary contract

In January 2019, came into the amendments to the Federal Law “On Protection of Competition”, clarifying the procedure for renewing contracts for state and municipal property lease договоров with bona fide lessees.

Under Part 9 Article 17.1. of No.135-FZ Federal Law “On Protection of Competition”, upon expiry of a lease contract concluded on the basis of the outcome of competitive bidding or without it*, the contract must be extended with the lessee that duly executed one’s obligations without tender or auction procedures**.

At the same time, the following conditions should be met:

– The lease fee is determined based on assessment of the market value of a facility

– The minimum period for extending a lease contract is no shorter than three years.

This period can be shortened only upon a statement from the lessee.

If upon expiry a lease contract was extended for an indefinite period under Clause 2 Article 621 of the Civil, Code of the Russian Federation, and later the lease provider and the lessee made a decision to renew the contract, they must be guided by the above provisions of Part 9 Article 17.1. of the Federal Law “On Protection of Competition”.

“Today the amendments that came into effect at the beginning of the year eliminate the risk of losing SME business and provide support to businessmen that strictly fulfill their lease obligations. Lease contracts for state property extended for an indefinite period under the Civil Code also are effective and can be renewed without competitive bidding, certainly observing all conditions of such extension and fair practices of the lessee”, concluded Deputy Head of FAS Rachik Petrosyan.

Reference:

* Before Article 17.1. of the Federal Law “On Protection of Competition” came into force (before 02.07.2008)

** Except cases specified in Part 2 Article 17.1. of the Federal Law “On Protection of Competition”.