The Civilistic Way of Thinking
How to treat a «loan agreement» for a share in the right of ownership if it does not violate anyone's interests.
The other day, a client puzzled me with a question. He rents premises in an office center owned — as a single real estate object — by four co-owners with unequal shares. Accordingly, there are four lessors in the contract, and the monthly rental payments are divided proportionally to their shares and transferred to four different addresses. At this stage, everything was going well, and everyone was in agreement.
But then the tenant receives a letter from one of the lessors, stating that a gratuitous loan agreement has been concluded between him and another co-owner/co-lessor, under which one of them transfers his share in the ownership right (sic!) to the other as a loan, corresponding to certain premises within their shared property (sic! sic!). Therefore, the lease agreement must be re-signed (sic! sic! sic!), and one of the co-owners should now receive rental payments for both (at least I don't see a problem with this part). Moreover, they attach a letter from the other two co-owners stating that they do not object to this transfer of the share as a loan.
Well, they were immediately sent packing regarding the re-signing of the entire lease agreement. They settled on concluding an additional agreement, under which, due to the transfer of co-owner 1's share as a loan to co-owner 2, all rights and obligations of the former under the lease agreement would transfer to the latter. And this is how it ended up on my desk.
It is quite clear that, from the perspective of our current legislation, a share in the ownership right cannot be the subject of a loan, nor does it correspond to any specific physical part of the shared property, at least until the allocation of this share or the division of the common property takes place.
But — as highlighted in the title — a normal civil lawyer cannot stop there and say that since this is not allowed by law, it is pointless to pay attention to it. No, here we need to understand whether such an agreement violates anyone's rights and, if not, what norms to apply to it so that it is clear how to proceed.
There is no apparent violation of the co-owners' rights — especially considering that all of them agreed to this agreement (either by signing it or by separately stating their consent). For the tenant, in principle, it also does no harm, as they still pay the total amount for the use of all premises, and the internal distribution of payments among different co-owners is a secondary matter.
And since this «loan agreement» does not violate anyone's interests, we need to think about how to treat it. Apparently, as an agreement between co-owners on the procedure for possession, use, and disposal of their common property, concluded in a highly peculiar form. The form here even turned out to be written, but in a mixed-written manner: for two of the four co-owners — in the form of a single document, while the other two, one might say, joined this agreement through an exchange of letters.
Exotic, but not prohibited. Yes, if we already had norms allowing the registration of such agreements, it is unlikely they would have been able to register it: in our country, there is an unspoken but quite deducible rule from specific cases about the need to execute contracts submitted for registration in the Unified State Register of Real Estate (USRRE) in the form of a single document. But in our specific case, no one registered anything.
If co-owners can conclude such an agreement among themselves, including, as it seems, the right to stipulate the absence of monetary compensation by one co-owner to another for the disproportionality of the use of their shares, then the more important question for me is how this agreement will look from the perspective of their common counterparty — the tenant. Apparently, it should be qualified under Article 309.1 of the Civil Code — as an agreement between creditors on the procedure for satisfying their claims against the debtor, which, for the tenant, changes nothing as long as the contract terms remain unchanged. Well, if changes are made to the lease agreement in connection with this, it is its terms that matter to the tenant, and even if the procedure for possession, use, and disposal by the co-owners changes, the tenant will still be guided by the terms of the contract.
However, even in the absence of changes to the contract, such documents can be qualified as a redirection of performance — an instruction from the creditor to pay the amounts due to them from this moment to another person. Of course, the exotic form here reduces certainty for the tenant and could play a cruel joke, but given the general consensus of all co-lessors, it is unlikely to create problems.
As we can see, despite the completely inadequate form of documenting the relationship chosen by the co-owners, their quite legitimate goals turn out to be achievable if the documents are treated from the perspective of a general presumption of legality. Such a general presumption is not characteristic of all lawyers: as an experiment, I would like to see how specialists from Rosreestr, notaries, or even judges would react to this.
Source: A note by Alexander Latyev, INTELLECT, in a blog on Zakon.ru
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