The welfare of the population is growing, respectively, and the need for investing free cash is growing. One of the most effective money management tools is land acquisition.
According to the rules dictated by land law, an auction is almost always held. Let us consider in detail what land tenders are, features and rules for their implementation, and also we will figure out whether this procedure can be circumvented.
Land auction - what is it? We reveal the concept
If you do not delve into complex concepts, then this is one of the ways to register land rights. The rules for its organization and conduct are spelled out in Articles 39.11 and 39.12 of the RF Labor Code.
The bidding process itself is simple. She has rules that are clearly regulated by law. For example, there are only a few reasons to recognize an applicant as not admitted to bidding.
Holding a land auction within the meaning of the legal rules governing the procedure for its organization does not allow ambiguous interpretations. This means: if the participant was not admitted illegally, then such a decision of the authority can be challenged. If a participant knows his rights and elementary rules, then he can easily defend his own interests in any instance, even without a diploma of a professional lawyer.
Varieties of bidding
A land auction can be held both for the transfer of land to lease, and for registration of ownership of it. Regardless of which right is played at the auction, any lot has an initial price. This is the market value of the site, when it comes to its sale, or the initial price of the annual rental.
The initial price value is determined on the basis of a market report, which is ordered by the trading organizer from an independent appraiser. However, if the cadastral value is established no more than five years before the decision to bid, it can be taken as the basis for determining the initial value of the lot.
Market or cadastral - the organizer decides
The decision on whether to sell land at the market price or on the basis of cadastral value data is decided by the auction organizer. Practice shows that the advantage is in favor of the market price, since the cadastral price is usually much lower.
Rent can also be market, because the report is produced at an annual cost. In addition, the authority can set the initial price of land, an auction for which is held on a leasehold as a percentage of the cadastral value. This value cannot be less than 1.5% of the cadastral value, and the value itself must be determined no earlier than five years before the publication of the tender notice.
In addition, the law establishes the auction step, the value of which is 3% of the initial price. There is a deposit to be paid together with the application for participation in the land auction. Its value is not approved, but, as a rule, the deposit is set at a rate of 20 to 50% of the starting price.
When to do without an auction
In some cases, you can’t do without bidding. It is about transferring land rights for commercial purposes. This may be the construction of a store, car wash, office building and so on. If the possibility of building a capital real estate property directly follows from the permitted use of the land, an auction is possible only on a rental right. There is no legal opportunity to obtain land without bidding for the implementation of the designated goals.
It is important to note here: the construction of commercial real estate assumes that the land is being leased, and after the construction of the facility and obtaining legal rights to it, the land becomes the property of the owner of the facility. Only land plots for individual housing construction, subsidiary plots or some types of agricultural land can be sold at auction.
Tendering
A notice that a land auction is being held is published in the print media of the authority and on the official website of the Russian Federation to post information on tendering. The notification should appear in the sources no later than a month before the date of the event. The legislator introduced such requirements so that everyone could find out what tenders are held and take part in them.
An application form is published so that it can be completed for registration. A lease or sale form is also published. This is done so that a person who decides to take part in a land auction can learn in advance all the provisions of the contract.
Be sure to indicate the period for which the lease is concluded. Additionally, the draft agreement prescribes the procedure for paying obligations, the procedure for extending contractual relations, ways to amend the contract, and penalties for non-payment of obligations.
Applications are accepted within 25 days, and after one or two days a determination of bidders is appointed, after a couple of days - an auction.
Admission of Applicants
There are only two legal reasons for refusing an applicant:
- no deposit made;
- not all documents are presented or false information about the applicant.
Citizens must provide a passport, and for firms only a completed application and payment of a deposit are required. If the application is signed and brought by the director or another employee who, according to the documents of the company, can act in her interests without a power of attorney, then no other papers are required. If the interests of the company are represented by its employee, then you need a power of attorney issued by the director. The authority can obtain information about the company through the website of the Federal Tax Service.
The same applies to individuals who represent the interests of others by proxy. In the notarial document exactly those powers that are needed at the auction should be spelled out.
Auction Rules
Auctions for the sale of land are held on the day and hour indicated in the notice. If there are two or more participants, the auctioneer calls the initial bid price, and then increases it sequentially. Participants express their opinion about the price using numbered cards that are issued to them before the event. The winner is the one who bid higher than other participants.
What happens to the deposit
The deposit made by the participant who won the procedure leaves the account for payment under the contract. The makings of those who traded but lost should be returned. This rule works even when the participant was admitted, but failed to appear at the procedure. The authorities have no reason to keep his deposit.
In addition, if the applicant decided to withdraw his application and did it in writing before the deadline for accepting documents, then he receives his security funds back. If the reception is closed and there is only one day left before the bidding, then it does not make sense to withdraw the application: the deposit will be lost. In this case, it is better to take part in the procedure or not to appear at all.
Evasion and liability
Auctions for the sale of land allotments (or for transferring them for rent) are held in the presence of a commission and participants. The event is open, price proposals are submitted voluntarily. However, often the citizens who won the tender do not want to sign the contract or consider that, until the parties agree on the document, amendments can be made to it. It goes without saying that most often in this way they try to change (or completely remove) the points on the responsibility of the winner, for example, for not leasing.
It was considered above that the draft contract is attached to the notice, therefore it cannot be adjusted. Anyone who has won the procedure is required to sign a contract. The law requires the government body to submit three draft contracts to the winner within ten days. If the latter refuses to put his signature, then, regardless of the motive, he is considered to have declined to conclude a contractual relationship.
What happens when dodging? The auction organizer draws up a protocol of the established form. The deposit, which was previously made by the winner, is lost by him, and information about evasion is transmitted to the Territorial OFAS.
The antimonopoly service decides whether to include such a citizen (individual entrepreneur or organization) in the register of unscrupulous participants. It should be noted that the applicant must prove that he had good reason to refuse his signature. These may be family circumstances, for example, the need to pay for expensive treatment. Such a fact must be documented, otherwise the FAS may not heed the arguments.
If the decision on inclusion in the register is positive, then information about the participant falls into this list for a two-year period, after which the entry is canceled. For two years, such a person may not participate in land tenders.
Electronic bidding
The auction may be held on the electronic site. In this case, applications are submitted remotely, and the results are summarized without the direct presence of participants. This type of procedure is developing rapidly, so after a while it will not be necessary to personally submit bid applications.
The rules remain the same. Exception: the participant must be accredited at a specific electronic site. This is necessary not only to establish his identity, but also so that he can sign official documents using EDS.