Capital and Current Repairs in Commercial Premises (RF)

The law in Russia distributes repair duties between parties, governed primarily by the Civil Code of the Russian Federation (CC RF) and the Town Planning Code. Under Article 616 CC RF: The Lessor (Landlord) is obliged to perform capital repairs at their own expense, while the Lessee (Tenant) is obliged to maintain the property in proper condition and perform current repairs at their own expense, unless otherwise provided by the lease agreement. In commercial B2B leasing, these duties are frequently redistributed via "Freedom of Contract."

1. Capital Repairs: Responsibility of the Landlord (Lessor)

If the lease agreement for a store (or warehouse) contains no special notes, the default laws of the RF apply. According to Art. 1, Pt. 14.2 of the Town Planning Code RF, capital repair includes the replacement and/or restoration of building structures (including non-load-bearing structures), the replacement and/or restoration of engineering systems and utilities, or the replacement of individual elements of load-bearing structures with similar or improved elements.

• The landlord must: replace or restore building structures, repair or replace engineering systems (heating, sewer, water), and handle individual load-bearing elements.
• In the event that a landlord fails to perform their duty to carry out capital repairs, the Tenant has the legal right under Art. 616 CC RF to:
  • (A) Carry out the capital repair themselves and recover the costs from the owner or set them off against the rent;
  • (B) Demand a reduction in the rent amount;
  • (C) Demand the termination of the contract and the payment of damages.

B2B Exception: Logistics Warehouses

When leasing a giant Logistics Hub to a marketplace, developers (Landlords) frequently write in a harsh contractual clause that dumps the entire capital repair burden of the building entirely onto the Tenant themselves (including repaving the asphalt outside for trucks).

2. Current Repairs and Shell & Core: Responsibility of the Tenant

The tenant (store, company) bears the full burden of daily premises maintenance: changing light bulbs, painting walls, fixing their own shop windows, sinks, cleaning the premises, and servicing their own server systems and installed air conditioners.

Shell & Core (Without Finishes): The standard for modern premium commercial construction in the RF is delivering raw concrete. The landlord hands the tenant keys to an empty concrete box (no sockets, floor screed, or toilets). In this case, the tenant is granted a "Rent Holiday" (e.g., 2–3 months of free occupancy) so they can fully equip the space: pouring the floor screed, building ceilings, erecting partitions, and installing ventilation using millions in investments.

3. Separable and Inseparable Improvements (The Key Move-Out Dispute)

The moment a tenant moves out of a space, disputes often arise regarding the improvements made to the property:

• Separable Improvements: Sofas, bar counters (unbolted), TVs, projectors, expensive paintings, portable decorative lamps. By law (Art. 623 CC RF): These are the property of the Lessee (Tenant) unless the contract states otherwise.
• Inseparable Improvements: Floor screed, tiles, erected concrete partition walls, integrated ventilation systems. These cannot be removed without physically destroying the premises.
• By RF Law (Art. 623 CC RF): If made with the Lessor's consent, the Lessee is entitled to reimbursement for the cost of these improvements upon termination of the lease, unless the lease agreement explicitly provides otherwise. If they were made without the Lessor's consent, the cost is not subject to reimbursement unless otherwise provided by law.
• RF Practice (B2B): Most commercial landlords insert a clause to override the legal default: "All inseparable improvements made by the Tenant, including approved ones, pass free of charge into the ownership of the Landlord upon expiration of the contract without any compensation." As a result, a company that invested heavily into a mall fit-out may end up gifting that renovation to the building upon exit.

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