On the Issue of Leasing Land Plots in State or Municipal Ownership to Peasant (Farmer) Farms and Agricultural Organizations Participating in State Support Programs in the Field of Agricultural Development Without Bidding

Sukalo Vitalii Alekseevich Postgraduate student, Department of Civil and Criminal Law Disciplines, Institute of History and Law, Khakass State University 655017, Russia, Republic of the Republic of Khakassia, Abakan, Lenin str., 90 rc-21@yandex.ru

On March 01, 2015, Federal Law No. 171-FZ of June 23, 2014 "On Amendments to the Land Code of the Russian Federation and Certain Legislative Acts of the Russian Federation" came into force, which introduced significant changes to the land legislation of the Russian Federation in terms of management and disposal of land plots, involvement of land plots in economic turnover, and the whole a number of other changes, including new concepts and institutions, which significantly changed the previously established system of land relations in Russia [10. p. 90].

At the same time, in the domestic science of civil and land law, until now, after more than 7 years since the entry into force of these legislative changes, there are still almost no monographic studies aimed at analyzing the radically changed legal regulation of the institution of lease transactions with land plots owned by the state or municipal property, identifying gaps and collisions, the proposal of ways to eliminate them. In this regard, the analysis of the problems of the land legislation of the Russian Federation, the search for ways to solve them are of particular relevance both for the scientific community and for real law enforcement practice, since the possibility of achieving the goals of the legislator, ensuring the interests of the state and society in the field of land relations depends on timely identification and resolution of these problems.The state and municipal ownership still holds most of the land, especially agricultural land, which is provided by authorized bodies through the transfer of rights to an interested person in various forms, thereby ensuring the emergence of mutual rights and obligations of the parties [7. p. 51].

The civil legislation of the Russian Federation provides for two forms of bidding – auctions and contests.

The Land Code of the Russian Federation (hereinafter - the RF Land Code) in Part 1 of Article 39.6 establishes that, as a general rule, lease agreements for land plots from state or municipal ownership are concluded based on the results of auctions conducted only in the form of auctions.

The scientific community has not yet stopped discussing the feasibility of including tenders in the land legislation as a form of bidding for the provision of land plots from agricultural land owned by public legal entities.

Many scientists believe that auctions for agricultural land from state or municipal ownership should be held only in the form of contests. The same method of bidding as an auction does not allow taking into account the specifics of agricultural land and the financial situation of agricultural producers. It is the competition, according to, for example, Rumyantsev F.P. [9. P. 17], that can determine the optimal conditions for the use of such lands and ensure their transfer to the effective owner, and not to the one who is able to offer the highest price. Pantin E.V. also believes that bidding in the form of tenders will allow taking into account both the price of a plot of agricultural land and other essential criteria for its use [8. pp. 12-13]. The same opinion is shared by Doctor of Law, Professor Ustyugova V.V. [11. p. 44]

In our opinion, the legislator deliberately excluded tenders from possible forms of bidding for the provision of any land plots, including agricultural land, in order to develop competition and exclude previously numerous abuses and circumvention of the law by unscrupulous land users, and corruption manifestations by authorized bodies. At the same time, in order to eliminate the shortcomings of such a form of bidding as an auction indicated by lawyers, the legislator, in order to support small and medium-sized agricultural producers, left in the RF CC a large list of grounds for granting agricultural land plots from the ownership of public legal entities without bidding. The law enforcement practice of granting such lands without bidding does not always correspond to the goals of the legislator, and therefore, the legislation regarding the provision of land without bidding undoubtedly needs to be adjusted. But the return of tenders as a form of bidding, we believe, is inappropriate and contradicts the goals of reforming the land legislation of the Russian Federation. As Lipsky S.A. reasonably points out, the auction is the most open, fair form of bidding for participants, reducing the likelihood of various kinds of corruption manifestations and maximizing the income of public legal entities [5. p.124].

As E.A. Galinovskaya reasonably points out, equal, authorized access to land is necessary in order to ensure all public needs and their corresponding interests [3. P. 16].

The state is interested in the development of agricultural production. Every year, programs of state support in the field of agricultural development are adopted at different levels, agricultural producers are included in these programs on the terms of competitions: both agricultural organizations and peasant (farmer) farms. For agricultural production, the main asset is land resources, without which it is impossible to develop agriculture in sufficient quantity and, as a result, the development of remote territories of such a huge country as the Russian Federation.

With regard to agricultural plots, the interest of the company is not so much in maximizing the profit from their sale, as in being able to compare a set of measures that should be implemented by buyers for the most profitable and safe use of such lands [1. p. 50].

It seems that it is precisely for the purposes of the effectiveness of state support programs in the field of agricultural development that the provision formulated in Clause 12, clause 2, Article 39.6 of the RF CC was introduced into the law, stating that a lease agreement for a land plot from state or municipal ownership is concluded without bidding in the case of granting a land plot to a peasant (farmer) farm or an agricultural organization in cases established by Federal Law No. 101-FZ of 24.07.2002 "On the Turnover of agricultural Land" (hereinafter – the Federal Law "On the Turnover of Agricultural Land").

The provision of a land plot without bidding in the current land legislation is declarative in nature [2. p. 30], that is, it is carried out only on the basis of applications from interested persons who must submit relevant documents and justification for the possibility of providing land without bidding. If the documents are not submitted or do not comply with the requirements of the law, the authorized body has the right to refuse to provide a land plot without bidding.

According to paragraph 8 of Article 10 of the Federal Law "On the Turnover of Agricultural Lands", land plots from agricultural lands owned by public legal entities are leased for up to five years to peasant (farmer) farms, agricultural organizations participating in state support programs in the field of agricultural development, for farming farming or carrying out other activities related to agricultural production without bidding. The same norm states that if the authorized person for the disposal of land plots from agricultural lands has received several applications for the provision of such a land plot for rent, the corresponding plot is provided according to the procedure provided for in Article 39.18 of the RF CC.

Only in this single case, an agricultural organization is listed in the RF CC as a person to whom a land plot in state or municipal ownership for agricultural activities can be leased without bidding.

The principles of granting land plots established by the RF CC, the rules of their turnover, and the requirements of the law on informing the public about the alienation of land plots owned by public entities are aimed at ensuring a fair balance between the interests of all persons wishing to acquire ownership or lease land plots from land owned by public entities.^[4]

Violation of these rules entails encroachment on public interests and invalidity of the transaction due to nullity by virtue of paragraph 2 of Article 168 of the Civil Code of the Russian Federation^[5].

The exact fulfillment of the requirements of the law by authorized bodies, individuals and legal entities contributes to the rational use of land, preservation of fertility and quality of land plots and generally improves the ecological state of the environment [4. p. 18]

As law enforcement practice shows, cases of misinterpretation and enforcement of norms by authorized bodies are widespread, which entails the adoption of illegal decisions, the recognition of relevant transactions as invalid or unjustified refusals to interested parties to provide land plots without bidding. Thus, S.G. Khusyaynova, M.Y. Kagamlyk write about the widespread dissemination of facts of illegal disposal of land plots from the property of public legal entities [12. P. 91] In different subjects of the Russian Federation, there is still the formation of their own approaches to the implementation of uniform federal norms of land legislation in the field of the provision of agricultural land plots without bidding. [6. p. 153]

In our opinion, if we follow the literal text of paragraph 8 of Article 10 of the Federal Law "On the Turnover of Agricultural Land", then the procedure for granting agricultural land plots to a participant of the state support program in the field of agricultural development without bidding should look like this:

1.                 Submission by a peasant (farmer) farm or an agricultural organization that are participants in the state support program in the field of agricultural development of an application to the authorized body for the provision of a land plot (if the plot is formed and clarification of boundaries is not required) or an application for preliminary approval of the provision of a land plot (if the plot is not formed or clarification of boundaries is required) from agricultural land appointments specifically for the purposes of farming or other activities related to agricultural production. At the same time, the applicant shall attach to the application documents confirming his status as a participant in the relevant state program.

2.                 Verification by the authorized body of the availability of other applications for the land plot requested by the applicant from participants of state support programs in the field of agricultural development.

3. If there are no other applications, the plot must be provided to the applicant without bidding for rent for up to 5 years without additional formalities.

4. If there are several applications from participants of state support programs in the field of agricultural development for a specific land plot, then the plot must be provided according to the procedure established by Article 39.18 of the RF CC, i.e. with the publication of a notice of intent to provide a plot, the collection of applications, the appointment of an auction in case of receipt of several statements of intent to participate in the auction. At the same time, statements of intent to participate in an auction for a published notice, based on the meaning of the rule of law under consideration, can only be submitted by participants in state support programs in the field of agricultural development, i.e. only special entities can compete with each other, and not all willing citizens and peasant (farmer) farms, unlike the general procedure, established by Article 39.18 of the RF CC.

Judicial practice interprets these rules of law in a completely different way.

Thus, the Arbitration Court of the Central District in its decision dated March 06, 2018 in case No. A68-9719/2016 indicated that the arguments of the administration that the legislation does not provide for the publication of a notice on the provision of a plot upon receipt of an application from the interested head of a peasant (farmer) farm in accordance with subparagraph 12 of paragraph 2 of Article 39.6 of the RF CC, paragraph 8 Articles 10 of the Federal Law "On the Turnover of agricultural land" are subject to rejection. Based on the general principles of land legislation and the content of paragraph 2 of paragraph 8 of Article 10 of the Federal Law "On the Turnover of Agricultural Land" and Article 39.18 of the RF CC, the possibility of providing a land plot without bidding is associated with the absence of applications from other interested parties for the provision of this land plot. The court concluded that if the authorized body received several applications for the provision of a land plot from agricultural land for rent, the corresponding plot is provided in accordance with the procedure established by Article 39.18 of the LC RF. Thus, an application for the provision of a land plot without bidding in accordance with paragraph 8 of Article 10 of the Federal Law "On the Turnover of agricultural Land" in any case should be considered according to the rules of Article 39.18 of the RF CC.

The Supreme Court of the Russian Federation has generally eliminated any doubts about the interpretation of these legal norms, indicating in paragraph 1 of the Review of Judicial Practice in cases related to the provision of land plots to agricultural organizations and peasant (farmer) farms for agricultural production"that the provision of land for agricultural production on the basis of paragraph 8 of Article 10 of the Federal Law "On the turnover of agricultural land" without bidding is allowed only in the absence of applications for the provision of this plot from other peasant (farmer) farms or agricultural organizations that have the right to provide a plot on this basis. In order to identify the named persons, the authorized body publishes a notice on the provision of a land plot in accordance with the procedure provided for in Article 39.18 of the RF CC.

Based on the interpretation of the legal norms under consideration by the judicial system, the authorized body is obliged in any case to proceed to the procedure for granting land plots established by Article 39.18 of the RF CC, that is, with the publication of a notice, the collection of statements of intent to participate in the auction from other interested parties, upon receipt of which the plot can be provided only through an auction. At the same time, statements of intent to participate in the auction for the right to conclude a lease agreement can be submitted by any person, including those who are not participants in state support programs in the field of agricultural development. At the same time, the fact that bidders participate in state programs to support agriculture has no special legal significance when considering an application in accordance with Article 39.18 of the RF CC. Only in the absence of statements of intent to participate in the auction from other persons, the authorized body may conclude a lease agreement without bidding with the applicant – participant of the state support program in the field of agricultural development.

Thus, already executed lease agreements for agricultural land plots concluded without bidding with participants of state support programs in the field of agricultural development in the absence of prior notification and carrying out the entire procedure established by Article 39.18 of the RF CC are at real risk of being invalidated by virtue of nullity.

Such judicial practice has developed due to the presence of internal contradictions of the norms of law – paragraph 8 of Article 10 of the Federal Law "On the Turnover of Agricultural Land" and Article 39.18 of the RF CC, since, in accordance with the first norm, plots without bidding are provided to peasant (farmer) farms and agricultural organizations participating in state support programs in the field of development agriculture, but, as follows from the text of Article 39.18 of the RF CC, to which paragraph 8 of Article 10 of the Federal Law "On the turnover of agricultural land" refers, the procedure established by Article 39.18 of the RF CC applies only to citizens and peasant (farm) farms, but not agricultural organizations. Also, this interpretation of the legal norms in question arose due to the presence of a legal gap – the absence in the legislation of another procedure for identifying other persons interested in obtaining a land plot on the grounds provided for in paragraphs 12, paragraph 2, Article 39.6 of the RF CC and paragraph 8, Article 10 of the Federal Law "On the turnover of agricultural land", except for the procedure specified in the article 39.18 of the RF CC.

It turns out that the provision of a land plot without bidding to an agricultural organization that is a participant in the state support program in this area is legally impossible, because all the same such provision will take place according to the procedure of Article 39.18 of the RF Labor Code, which does not apply to agricultural organizations.

It also seems that the mandatory, in the opinion of the courts, upon receipt of an application for leasing a land plot from agricultural lands of a participant in the state support program in the field of agricultural development, the transition to the procedure established by Article 39.18 of the RF CC, disavows the right of such a participant in the state program to receive a plot without bidding, because with mandatory publication there are frequent cases of receiving applications in response to such a notification from other persons who are really interested in obtaining a plot, but who are not participants in state support programs in the field of agricultural development, and from "professional applicants" who really have no intention of using such a plot. Thus, a participant in the state support program in the field of agricultural development competes not only with the same participants in state programs, for which it is necessary to pass a competitive selection, where the main criteria for victory are the social significance of the project, meeting the needs of society and the state, the development of agricultural production, but also with other citizens and peasant (farmer) farms that may not be participants in state support programs in the field of agricultural development.

On the other hand, we believe that if we follow the literal text of the rule of law and provide plots without prior notification of the intention to provide them, then there is a great scope for abuse by authorized bodies, it is impossible to ensure the principles of fairness, publicity, openness and transparency of the procedure for granting land plots that are state or municipal property.

It seems that in order to comply with these principles of granting land plots owned by public legal entities and the reality of granting land plots without bidding to peasant (farmer) farms and agricultural organizations that are participants in state support programs in the field of agricultural development, as well as to eliminate the risks of invalidating existing lease agreements, it is necessary to change the legislative norm, established in clause 8 of Article 10 of the Federal Law "On the Turnover of Agricultural Land", as well as the inclusion in the RF CC of a new Article 39.18.1.

We believe that it is advisable to state paragraph 8 of Article 10 of the Federal Law "On the Turnover of agricultural land" in the following wording: "8. Land plots from agricultural lands that are in state or municipal ownership are leased for up to five years to peasant (farmer) farms, agricultural organizations participating in state support programs in the field of agricultural development, for farming or other activities related to agricultural production without bidding in accordance with the procedure provided for in Article 39.18.1 of the Land Code of the Russian Federation."

In our opinion, the Land Code of the Russian Federation should be supplemented with Article 39.18.1 with detailed regulation of the procedure for granting such land plots without bidding to peasant (farmer) farms and agricultural organizations participating in state support programs in the field of agricultural development, which, among other things, will contain the procedure for identifying interested persons. The new norm will be almost completely similar to Article 39.18 of the RF Labor Code, but only with regard to the procedure for considering applications from special entities (peasant (farmer) farms and agricultural organizations participating in state support programs in the field of agricultural development) for leasing land plots owned by the state or municipal for farming without bidding farming or carrying out other activities related to agricultural production.

In the proposed norm of the RF CC, we believe it is also necessary to explicitly state that only peasant (farmer) farms and agricultural organizations that are participants in state support programs in the field of agricultural development, interested in acquiring rights to the land plot specified in the notification, can submit applications for intention to participate in the auction, for which the application for the intention to participate in the auction for the right to conclude a land lease agreement must be accompanied by a document confirming participation in the state program.

For uniform interpretation and enforcement, it seems appropriate to include in the proposed Article 39.8.1 of the RF CC a separate provision stating that only peasant (farmer) farms and agricultural organizations that are members of the Russian Federation have the right to participate in auctions for the right to conclude a lease agreement for land plots assigned based on the results of the collection of statements of intent to participate in the auction according to the published notice. participants of state support programs in the field of agricultural development, with the submission of relevant documents.

Some legal scholars believe that the RF CC is currently unreasonably overloaded with direct-action norms that regulate in detail the procedures for granting land plots that are in state or municipal ownership.

Thus, Yu.A. Umerenko considers excessive regulation of procedures to be performed by authorized state and municipal bodies to be one of the urgent problems of land legislation at the present stage, which is unusual for codified regulatory legal acts. The tasks of the legislator in terms of involving land plots from the ownership of public legal entities in economic turnover may well be solved in a subordinate regulatory act, in connection with which it is proposed to take the regulation of procedures outside the framework of the RF CC [6. p. 92].

It is difficult to agree with such a position, because the norms of the RF CC quite reasonably contain norms of direct action that regulate in detail the procedures for granting land plots from the ownership of public legal entities in order to protect the rights and legitimate interests of individuals and legal entities interested in obtaining such plots. The inclusion of such norms in the RF CC, which implies the complexity of their changes, is aimed at ensuring the stability of legal regulation and, as a consequence, the entire civil turnover. In this connection, we consider it justified and justified to include the proposed procedure in the RF CC in a separate article 39.18.1.

It seems that the proposed amendment of the legislation will create a currently missing procedure for identifying other persons interested in obtaining a land plot on the grounds set out in paragraphs 12, paragraph 2, Article 39.6 of the RF CC and paragraph 8, Article 10 of the Federal Law "On the Turnover of Agricultural Land", will grant agricultural organizations the currently unrealized right to acquire the relevant land land plots without bidding, will allow competing at auctions among themselves, as conceived by the legislator, only to participants of state support programs in the field of agricultural development, which ultimately corresponds to the goals and interests of the state and society in the field of agricultural development in the Russian Federation, contributes to the suppression of abuse by unscrupulous persons. The proposed changes in the regulatory framework also contribute to the stability of civil turnover, eliminate the risk of recognition of land lease agreements concluded without bidding with participants of state support programs in the field of agriculture from the ownership of public legal entities.

Thus, the current version of paragraph 8 of Article 10 of the Federal Law "On the Turnover of Agricultural Land" does not provide peasant (farmer) farms and agricultural organizations participating in state support programs in the field of agricultural development with a real opportunity to lease publicly owned land plots for farming without bidding farms or other activities related to agricultural production in connection with the unjustified application of the procedure established by Article 39.18 of the RF Labor Code, which carries a significant risk for already concluded lease agreements to be invalidated and in this regard does not allow us to talk about the stability of civil turnover and the protection of the interests of participants in civil legal relations. Based on the analysis of legislation and law enforcement practice, it is concluded that it is necessary in paragraph 8 of Article 10 of the Federal Law "On the Turnover of Agricultural Land" to change the reference to Article 39.18 of the RF CC to a reference to the new Article 39.18.1 of the RF CC. In order to exclude competition with persons who are not participants in state programs and to exercise the right to receive plots without bidding to agricultural organizations, it is proposed to prescribe a detailed procedure for identifying interested parties in the new Article 39.18.1 of the RF CC, similar to the procedure established in Article 39.18 of the RF CC, but only with respect to the procedure for considering applications of peasant (farmer) farms and agricultural organizations participating in state support programs in the field of agricultural development, on the provision of land plots in state or municipal ownership for farming or other activities related to agricultural production without bidding.