A yard of their own remains illusive for apartment buyers

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By OLEG PANKOV / Russian Property Online

More and more often, apartments are being sold along with the right to use part of the land adjoining the building. It might be just a plot of earth, but for many buyers, it is important.

If someone buys an apartment in a building where most of the residents haven't privatized their apartments, he gets his piece of the building's yard – dvor in Russian – for free. This makes it look like he's saving money. His only contribution to the general upkeep of the building and yard will be monthly utilities and maintenance payments.

But this is an illusion because without an owner, the building's yard ends up more like a vacant lot, and the building maintenance people have little incentive to put the land to effective use. In fact, it's in the maintenance workers' interest to have endless problems and repairs so they can do a bit of work here and there, perhaps even where it's not even needed. All this leaves residents with graffiti-smothered entrances, piles of garbage and a yard not worthy of the name.

In cheaply built new apartment blocks, the situation isn't much better. When these buildings are put up for sale, the yards are also supposed to be ready for use, but the builders often do no more than the bare minimum. And again, the lack of an overall owner means that even a nicely finished yard will soon begin to look shabby.

Moscow authorities are aware of the problem and sometimes put on a show of effort to improve the situation. In 1999, the program "My home, my entrance," or "Moi dom, moi podyezd," got under way, including a competition for the best yard.

But when Moscow housing inspectors made the rounds to check on what had been done, they found that in 2,100 entrances, repairs were incomplete and in 362 entrances repairs had been done so badly they would have to be done all over again. The inspectors also found problems in many of the yards that had been worked on.

The municipal budget has allocated 385 million rubles ($13.9 million) this year for renovating yards, but until land and buildings have owners, it doesn't seem that this money will bring tremendous results.

The situation is better in buildings where most of the residents are owners. A group of owners can form a resident's cooperative or condominium, where ownership rights over assets are shared. This is an ideal setup for a building's yard, for example. When the cooperative is registered, the surface area and boundaries of the yard are indicated and the piece of land is transferred to the condominium on a rental basis.

Since the cooperative has property rights over the yard, it can decide whether to call on the municipal maintenance workers, for example, or whether to call in private tradesmen who could offer better quality or cheaper services. The cooperative also decides what can be built on the territory, garages or parking space for example, versus a playground.

Maintenance is paid for by contributions from the owners. Arranging things this way is not cheaper than just making the usual payments to the district maintenance services, but the result is better quality. Furthermore, under housing reform laws, subsidies to maintenance and utilities payments will end by 2003, and cooperatives will find the changeover easier, as they can make money by renting out non-residential premises on their territory.

The ideal, but also most expensive, option for residents is to buy an apartment in a building that is already run under the cooperative system and has already sorted out its yard, or to buy in a new building that was planned with its own yard.

Often, with these new buildings, cooperatives are set up before the residents actually move in. The most well known example in Moscow is the Golden Keys complex on Minskaya Ulitsa. The complex has given 10 hectares over to a health and fitness center with swimming pools, covered gardens, children's play areas, a supermarket and landscaped gardens. The complex has security on duty round the clock.

But that, of course, is the top end of the market. Further down the scale, new buildings come with the minimum – fenced-off and guarded territory, children's play areas and well-kept lawns and gardens.

Buyers can expect to pay at the least $1,200-$1,600 per square meter for an apartment in a building with its own territory. But the market and buyers' demands are changing fast. And soon, buildings without their own proper yards will be more the exception than the rule.

(Russian Property Online's Website is at: www.rupron.com)