The changing conjuncture of the rental market for commercial real estate affects the development of small and medium-sized businesses in Russia.
From the mid-1990s to the year 2013, the Russian economy had a significant development due to the raw material model, which in its turn ensured the inflow of foreign investments, the development of technologies, the improvement of quality and the increase in construction in all economically attractive cities and regions of Russia, the creation of a considerable number of jobs, the hanging of the relevance of specialties in corporate management, enterprise management, personnel and projects.
In the middle of 2007 and the beginning of 2008 in connection with the obvious factors of the instability of the raw material economy and its limited effect in the domestic economic field, the state took steps to develop small and medium-sized businesses, which was the adoption of the Federal Law of 24.07.2007 № 209-FL "On the development of small and medium-sized enterprises in the Russian Federation", which came into force on January 1, 2008, and in the middle of 2008. adoption of the Federal Law of 22.07.2008 № 159-FL "On the peculiarities of alienation of immovable property in the state ownership of the constituent entities of the Russian Federation or in municipal ownership and leased by small and medium-sized businesses and on amending certain legislative acts of the Russian Federation."
Interest in the development of small and medium-sized businesses is inevitably conditioned by the fact that this serves as a basis for social development and economic growth of the middle class.
Small and medium-sized business in the modern economy of Russia is not an innovative model for the development of the country's economy, but on the contrary it is an integral part of a free market economy and a variety of forms of ownership that will exist in more or less.
However, the prospect, growth and planned scale of small and medium-sized businesses depend on market conditions, legal and tax regulation and, of course, the initial financial and property basis, which determines the attractiveness of doing business, choosing the scope of activity, choosing the organizational and legal form of business, identifying the necessary number of employees at the enterprise and as practice shows the transition from civilized business to the shadow, including the shadow labor market.
Of the most important elements of such a basis, it is possible to highlight the necessary security in the market for commercial real estate objects available under the price category and lease terms, which include office spaces, retail spaces, warehouses, and production areas.
Over 65% of operating small and medium-sized entrepreneurs operate on leased areas, just as virtually every potential entrepreneur, before starting his entrepreneurial activity, calculates in the first lines of his business plan the possibility of incurring considerable expenses for the rental of commercial real estate.
According to statistics, entrepreneurs' interest is drawn to the four segments of commercial real estate rental, of which 36% are for office space rent, 35% for rental of shopping, 17% for warehouse rent and 12% for rental of production space.
The number of small and medium-sized entrepreneurs in Russia, which has been growing rapidly since 2009 to 2012, at the moment is experiencing difficulties and reductions, calculated in tens of percent of the total.
This is due not only to the negative factors of the state's volatile policy to increase the mandatory fees and charges, imposed on small and medium-sized businesses, or the creation of excessively complex bureaucratic reporting mechanisms, changes in rates of corporate income tax and corporate property, but also, in a negative way, commercial real estate.
The property tax of organizations (Chapter 30 of the Tax Code Russian Federation) is a regional tax. The establishment, modification and cancellation of this tax is within the competence of the state authorities of the subject of the Russian Federation.
In accordance with Article 378.2 of the Tax Code (entered into force on January 1, 2014, FL-307 of 02.11.2013), the tax base for real estate is defined as the cadastral value of the property.
Such objects include:
- administrative and business centers and shopping centers (complexes) and premises in them;
- non-residential premises whose purpose in accordance with cadastral passports of real estate objects or documents of technical registration (inventory) of real estate objects involves the placement of offices, retail facilities, public catering facilities and consumer services, or which are actually used for placing offices, retail facilities, catering facilities and consumer services;
- objects of immovable property of foreign organizations that don`t carry out activities in the Russian Federation through permanent missions, as well as immovable property of foreign organizations that do not relate to the activities of these organizations in the Russian Federation through permanent missions.
Should pay attention to the Law of Krasnodar region "On the property tax of organizations" No. 620-KZ of 26.11.2003. (in the redaction of the Law of the Krasnodar Territory of 06.04.2015 N 3160-KZ), according to which the Russian organizations; foreign organizations operating in the Russian Federation through permanent missions and owning movable and immovable property on the territory of the Russian Federation are liable for a property tax rate of 2.2% of the cadastral value of the property.
Analyzing the dynamics of the commercial real estate rental market for the previous 3 years, we can state a significant decline in demand both in the Krasnodar region and throughout Russia, which is also confirmed by large-scale professional research of the commercial real estate market conducted by PRG consulting company.
Issues linked with the effective management of commercial real estate and its development, long-term and mutually beneficial leasing relations, were the theme of various forums and round tables, held repeatedly in Krasnodar in 2015. and in the beginning of 2016.
The number of proposals for renting commercial real estate, placed by landlords in the information and telecommunications network "Internet" has grown by 60%.
This is due, to a lesser extent, to the increase in the number of commercial real estate erected and commissioned, and to a greater extent by the number of vacant commercial premises leased out under lease contracts.
There are two factors that influenced this: first, the increase in rent fees, which proved to be beyond the tenant, while the lessor decided not to give up on his more exacting; secondly, due to the deterioration in the results of financial and economic activities of organizations - tenants, the latter lost the financial opportunity to bear the costs of the previously occupied area, or at all for the lease of the entire area.
The position of landlords with regard to the right to greater levy on leasing, or the lawful refusal to reduce fees in respect of tenant organizations that are worsening financial and economic activities is clear, understandable and based on the tax and legal burden, is fair.
However, I believe that this model and the nature of civil-legal relations between the lessor and the lessee have no prospects for the existence of serious crisis phenomena in the economy of the country and enterprises at the present time, a decrease in the volume and speed of turnover of companies, an increase in financial disputes between business entities and others known negative phenomena.
As it was stated earlier, the availability of affordable commercial premises for the price, quality and equipment is one of the basic elements of the basis for the development of small and medium-sized businesses, especially for catering enterprises, enterprises engaged in trade and various services.
It should not be particularly noted that the size of the costs of small and medium-sized enterprises for the maintenance and payment of rent of commercial real estate still has an impact on the increase in the price category of the products, services and goods sold, the reduction in the number of jobs and the wages of workers, practice, transition to shadow management of affairs or the shadow labor market.
I believe that in the current market conditions, the model of relations between the lessor and the lessee, in which the former wants to rent out its commercial real estate more profitable, and the latter, with the least expenses for renting this real estate, to conduct its business has no prospects for both.
I believe that for landlords this leads to inefficient use of their commercial property and the risk for an indefinite period of time to remain without tenants. And, as practice shows, this also leads to a reduction in the number of small and medium-sized enterprises, where the main reason is certainly not the difficulty of carrying out the cost of renting commercial real estate, but in a compartment with other negative factors, they force to reduce or completely cease their entrepreneurial activities.
Other models of contractual relations between the lessor and the lessee.
In the practice of business turnover in the relationship between the lessor and the lessee, the concept of "payment" most often involves the calculation of cash in a firm amount.
At the same time, the Civil Code of the Russian Federation contains a broader interpretation of this concept. According to paragraph 2 of Art. 614 of the Civil Code of the Russian Federation, it follows that the parties are entitled to establish various forms of rent, including those not related to the transfer of funds, of which the rent may be set as:
- the established share of products, fruits or income received as a result of the use of leased property;
- the provision of certain services by the lessee;
- transfer of property to property;
- transfer by the lessee to the lessor of the contractual property in the property or in rent;
- the assignment to the lessee of the contracted costs of improving the leased property;
- other types of rent at the discretion of the parties.
Let us briefly consider these types of rent payments, so that their proper application is clear.
- The established share of income received by the lessee from the use of leased real estate.
It is a question of the tenant's monetary obligation, determined as a percentage of the total amount of money received. In practice, this relationship model is used when the lessee obtains income as a result of performing work, rendering services, selling goods using leased real estate or when the lessee receives income as a result of granting leased real estate to sublease. There are also cases of obtaining a share of income derived from the use of several types of leased property, among which may be immovable and movable.
- Lease payment as a share of the production, received fruits and income from the use of leased specialized equipment, commercial real estate used to produce agricultural and livestock products, furniture, processing, weaving, production and other products.
Under the proceeds in this case, civil legislation implies fruits, products and incomes.
Article 606 of the Civil Code of the Russian Federation states that the lessee is the owner of the fruits, products and income received as a result of the use of property. A necessary contractual condition is the agreement by the parties on the volume of output (fruits or income received). In case of poor quality products, the parties should agree on: what characteristics should the products have in order to meet the contractual condition of quality, the procedure for determining this quality, the possibility of checking the lessor, compliance with quality control for compliance with the requirements of National State Standard.
- Rent in the form of the provision of certain services by the lessee.
According to paragraphs 3 p. 2 of Art. 614, art. 779 of the Civil Code of the Russian Federation, the parties can agree that for the right of temporary use of the object of lease, the lessee must provide the lessor with services, so perform certain actions or carry out certain activities. The parties must conclude this lease agreement, specify the services that the lessee must provide as payment.
This model of contractual relations is risky for the lessor in that in the absence of the subsequent need to obtain specific services, the lessor will not be able to require the lessee to pay rent in a different form.
However, this risk can be leveled, initially envisaging in the contract the possibility of changing the form of rent in the event that there is no need at a certain moment to obtain specific services from the lessee.
The principle of freedom of contract allows the parties to agree on any terms and content of the contractб concluded by them, most importantly, that they did not contradict the law and the foundations of law and order.
- Rent in the form of transfer of a thing for rent or ownership of the lessor.
If the lessee possesses the property that the lessor needs to use, the parties are entitled to agree on the rent in the form of transferring to the lessor a certain thing or several things in rent. The parties must agree on a specific thing (individually identify), the scope of the tenant's entitlements related either to temporary possession or temporary use, the lease term, the order of the transfers and the return.
Also in such cases, it is recommended to initially provide for in the contract the possibility of changing the form of the rent in case the interest of the lessor ceases in the subsequent lease of an individually specified item.
Another option for calculating the lease is to transfer the lessor to the ownership of an individually specified item, agreeing in the contract its name, characteristics, quantity, which refers to the essential conditions.
In practice, there are cases of settlements for rent by construction material.
In case of non-payment by the lessee of a fee in the form of transfer of a certain thing to the lessor, the latter has the right to require the lessee to pay in another form.
Undoubtedly, in the lease agreement, it is necessary to agree penalties or other penalties for delay in the transfer of ownership of the property to the lessor, or not at all the ability to transfer for any reason.
- Rent in the form of assigning to the lessee the costs of improving the leased real estate.
Improvement means work of a capital nature, which increases (changes) the qualitative characteristics of the object of lease, in particular, works on its modernization, reconstruction, repair, completion, additional equipment.
The parties must agree in the contract the amount of expenses for improving the leased property that are levied on the tenant as rent, which may include: the performance of work at the expense of the lessee by the tenant or third parties attracted by him; payment by the lessee of the costs of improving the leased real estate by the lessor or third parties attracted by him.
The appendix to the contract must agree on the estimate of work, the list and nature of improvements, timing and procedure for the implementation of work.
- Other types of rent.
It should be noted that the parties have the right to provide in the contract for several types of rent, determining which of the forms is applicable in a particular period, and on the basis of what circumstances.
Example. The parties have the right to agree on the form of the rent during the first year of the repair, reconstruction (improvement) of the leased real estate, within the second year, the receipt of the established share (percent) from the income received by the lessee from the use of the leased property, during the third year, tenant with the use of leased property, or the lease of an individual item with the subsequent transfer of ownership of the dan thing to the landlord.
Summing up the above, under conditions of current negative phenomena in the economy of the country and enterprises, reducing the volume and speed of financial and economic turnover of companies, the lessor who intends to effectively manage his commercial real estate and the lessee - the entrepreneur, should use the full freedom of market relations and the law freedom of contractual relations in order to build financially mutually beneficial and long-term relations, and in case of controversial situations or problems, should seek a compromise that satisfies the interests of both. It seems that such an approach is one of the mechanisms that provide an opportunity to stabilize the situation of small and medium-sized businesses in Russia, and in conjunction with it the economic position of the middle class.
Roman Adilkhanov