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Resolution of the Constitutional Court of the Russian Federation of May 29, 2026 No. 36-П in the case concerning the review of the constitutionality of Part 4 of Article 16.3 of the Federal Law “On Facilitating the Development of Housing Construction, the Creation of Tourist Infrastructure Facilities and Other Territorial Development” in connection with the complaint of the administration of the Syktyvkar urban district. The provision may not be applied in a manner requiring a local self-government body to accept a land plot of the unified development institution (DOM.RF) without a guarantee that the costs of its development will be compensated from the federal budget.
A land plot designated as “public-use area (roads, passageways, sidewalks)” was carved out of land owned by the unified development institution for comprehensive development. The developer did not create the infrastructure—as a result of a court judgment, several persons were convicted of fraud—and development did not take place. PJSC DOM.RF demanded that the plot be transferred to the Syktyvkar urban district; the commercial courts required the municipality to accept it on the basis of the express provision of Part 4 of Article 16.3 of the Law, and the Supreme Court of the Russian Federation refused to refer the complaint for review.
The Constitutional Court proceeds on the basis that local self-government and state authorities form a unified system of public authority (Article 132, Part 3, of the Constitution of the Russian Federation) and interact to resolve matters effectively in the interests of the population. The socio-economic development of territories, one of whose principal areas is housing construction, is a common task for all levels of government. A substantial portion of land suitable for development is federally owned; accordingly, involving municipalities in the development of such territories is constitutionally permissible.
Therefore, the obligation of a local self-government body to accept a land plot intended for local facilities or classified as a public-use area does not, in itself, conflict with the guarantees of local self-government autonomy. Given municipalities’ powers in road activities and the improvement of public-use areas, accepting such plots falls within their constitutional purpose.
At the same time, the unified development institution (DOM.RF) acts as an agent of the Russian Federation and, by holding auctions, entering into comprehensive development agreements, and monitoring their performance, performs a public function. It may not unilaterally transfer that function to a local self-government body. Applying its previously developed positions on the impermissibility of transferring state-owned property into municipal ownership without taking into account the will and interests of the municipality (Ruling of the Constitutional Court of the Russian Federation of December 4, 2007 No. 828-О-П, Resolution of the Constitutional Court of the Russian Federation of December 4, 2023 No. 55-П), the Court assessed a situation in which the developer had failed to perform its obligation to build the infrastructure and the development institution had taken no measures to develop the land plot.
In this case, a conflict emerges between Parts 3 and 4 of Article 16.3 of the Law: under Part 3, the plot is transferred after the facilities are commissioned, whereas under Part 4, it is transferred regardless of whether the construction obligation has been performed. Mandatory transfer of the plot, resulting in unplanned development costs for the local budget caused by the actions of another level of public authority, in the absence of any compensation, violates the autonomy of local self-government and its right to compensation for additional costs (Articles 12, 130 (Part 1), and 133 of the Constitution of the Russian Federation).
Having held the provision unconstitutional in this respect, the Court did not abolish the transfer mechanism but established an interim procedure: until the legislation is amended, a local self-government body may bring court proceedings to seek compensation from the federal budget for local-budget costs incurred in developing the land plot. The amount of compensation may be determined in proportion to the share of facilities attributable to the activities of the development institution and its developer.
The transfer of land plots for local facilities and public-use areas remains in place, but the federal level must guarantee funding for the creation of the infrastructure facility where the need arose because of the development institution’s actions. The Syktyvkar case is not subject to reconsideration; however, during subsequent development of the land plot, the municipality may seek compensation under the new regulatory framework.
For municipalities, the judgment creates a direct instrument for protecting their budgets: having accepted a land plot under Part 4 of Article 16.3 of the Law and incurred development costs, they may recover those costs from the federal budget through the courts, without waiting for new regulation. Courts of general jurisdiction and commercial courts hearing such claims will rely on the proportional criterion for allocating costs established by the Constitutional Court.
For DOM.RF and developers, the legal position means that failure to fulfil infrastructure-construction obligations does not shift the burden of development to the municipality “free of charge.” This increases the importance of the development institution’s oversight of the performance of comprehensive territorial development agreements.
Since the Constitutional Court extended its legal position to the transfer of land plots to constituent entities of the Russian Federation, the same compensation mechanism applies at the regional level. The federal legislator will have to establish the procedure for and sources of such compensation; until then, the operative part of the judgment serves as the reference point.
This analysis was prepared on the basis of the CasusLegal database (case law of the highest courts of the Russian Federation). The titles of the cited decisions link to their full texts in CasusLegal.