July 23, 2014

Amendments to Russian Urban Development Code: Clarifications on Tort Liability

Significant amendments affecting the liability of self-regulating organizations and building owners became effective on 1 July 2013.

Significant amendments to the Urban Development Code of the Russian Federation (the Code) took effect on July 1.[1] The Code is a key source of law governing urban planning, land usage, and property development. The most important changes to the Code are summarised below.

Joint and Severable Liability of Self-Regulating Organizations

"Self-regulating" organizations (SROs) are not-for-profit organizations established for the governing and licensing of certain activities of their members. Previously, SROs of construction companies could be held secondarily liable, under some circumstances, for certain harm caused by their members. Under the new rule, SROs may be held jointly and severally liable.

Owner's Liability for Harm Caused to Third Parties

The amendments clarify that owners of buildings may be held liable for harm caused to third parties as a result of the destruction or deterioration of their buildings or violations of safety requirements. However, if the harm is inflicted during the construction or renovation of a building, the developer, project manager, or general contractor will generally be held liable rather than the owner.

Fixed Compensation

In addition to their duties to provide full compensation for actual damages suffered by injured persons as a result of building defects, building owners are now required to pay additional compensation to injured persons in a fixed amount ranging from 1 million rubles (approximately US$30,000) to 3 million rubles (approximately US$100,000) depending on the seriousness of the harm. Corresponding amendments have been added to the Russian Civil Code and bankruptcy legislation.

Right of Recourse (Regress)

A new rule clarifies that, in certain cases, the owner of a building, general contractor, developer, or project manager may claim the full amount of actual damages plus the fixed compensation due to injured persons from contractors or subcontractors that have performed engineering surveys, design work, or specific construction, renovation, or capital repair assignments with respect to the relevant property. Such claims may also be made against SROs whose members were involved in the project, state agencies that reviewed the project documentation, or the regional or federal governments.

[1]. Pursuant to Federal Law No. 337-FZ, "On amendments to the Urban Development Code of the Russian Federation" (28 Nov. 2011).

Copyright © 2014 by Morgan, Lewis & Bockius LLP. All Rights Reserved.

About the Author

International Partner

Dmitry Kunitsa is an international partner in Morgan Lewis's Business and Finance Practice. Mr. Kunitsa regularly handles real estate development, investment projects, and nearly all types of contemporary real estate transactions. He also has experience in the hospitality and sports/entertainment industries.

+7 495 212 2505

Boost: AJAX core statistics

Legal Disclaimer

You are responsible for reading, understanding and agreeing to the National Law Review's (NLR’s) and the National Law Forum LLC's  Terms of Use and Privacy Policy before using the National Law Review website. The National Law Review is a free to use, no-log in database of legal and business articles. The content and links on are intended for general information purposes only. Any legal analysis, legislative updates or other content and links should not be construed as legal or professional advice or a substitute for such advice. No attorney-client or confidential relationship is formed by the transmission of information between you and the National Law Review website or any of the law firms, attorneys or other professionals or organizations who include content on the National Law Review website. If you require legal or professional advice, kindly contact an attorney or other suitable professional advisor.  

Some states have laws and ethical rules regarding solicitation and advertisement practices by attorneys and/or other professionals. The National Law Review is not a law firm nor is  intended to be  a referral service for attorneys and/or other professionals. The NLR does not wish, nor does it intend, to solicit the business of anyone or to refer anyone to an attorney or other professional.  NLR does not answer legal questions nor will we refer you to an attorney or other professional if you request such information from us. 

Under certain state laws the following statements may be required on this website and we have included them in order to be in full compliance with these rules. The choice of a lawyer or other professional is an important decision and should not be based solely upon advertisements. Attorney Advertising Notice: Prior results do not guarantee a similar outcome. Statement in compliance with Texas Rules of Professional Conduct. Unless otherwise noted, attorneys are not certified by the Texas Board of Legal Specialization, nor can NLR attest to the accuracy of any notation of Legal Specialization or other Professional Credentials.

The National Law Review - National Law Forum LLC 4700 Gilbert Ave. Suite 47 #230 Western Springs, IL 60558  Telephone  (708) 357-3317 If you would ike to contact us via email please click here.