Prohibition of housing and utilities sector debt recovery by third parties

Assignment of the right or demand on the collection of overdue debts on payment of residential premises and for utility services to third parties is prohibited in Russia from the moment of publication of the Federal Law №214-FZ dated 26.07.2019, which amended the Housing Code of the RF, the laws « On the protection of rights and legal interests of natural persons in cases of debts collection» and «On microfinance activities and microfinance organizations». This prohibition applies to credit organizations and companies engaged in overdue debts’ collection of natural persons.

Otherwise, the contract of assignment of the right or demand for debt recovery to third parties shall be considered as null and void.

Only landlords, management companies or other legal entities (sole entrepreneurs), who receive payments for residential premises and utility services in accordance with the Housing Code of the RF, have the right to enforce overdue debts on payment for residential premise and utility services.

It is possible to give up the right or demand for debt collection only based on an agreement with:

• newly selected management companies;
• established condominium associations, housing cooperatives or specialized consumer cooperatives;
• resource-supplying organizations;
• selected regional operators of municipal solid waste.

In addition, a provision has been enshrined that the owners of premises in multi-family housing must fulfill their obligations under multi-family housing management contracts by themselves, including payments for residential premises and utility services, and are not liable for obligations of other owners in the house.

According to the Information and Analytical system Globas, there are more than 67 000 active business entities for housing management in Russia. Information about them in full is available to subscribers of Globas.