Commercial Leases in Russia: B2B Rules for Non-Residential Premises

The rental of commercial real estate (offices, warehouses, retail spaces) in Russia is regulated by Chapter 34 of the Civil Code of the Russian Federation (CC RF). The legal term for commercial tenancy is "Lease Contract" (Договор аренды), whereas "Tenancy" (Наем) is strictly used for housing for individuals. The main difference between Russian commercial versus residential leasing is the maximal freedom of contract in B2B relations. The law is primarily oriented toward protecting the interests of the landlord (business owner) and provides both parties the opportunity to agree on practically any terms.

Key Rules for Commercial Leases (B2B)

1. Registration in Rosreestr (Term of Contract)

Contracts for the lease of a non-residential premise concluded for a term of at least one year (1+ years) are subject to mandatory state registration and are considered concluded from the moment of such registration (Article 651 CC RF).

In the B2B commercial sector, many landlords and tenants choose to sign contracts for a term of 11 months. This practice is used to avoid the administrative burden and costs of state registration in Rosreestr, while allowing the parties to renew the contract upon expiration. However, for significant, long-term investments where tenants require stability, commercial contracts are registered in Rosreestr (5, 7, or 10-year contracts create solid encumbrances on the building).

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2. Security Measures (Deposit / Bank Guarantee / Surety)

Corporate landlords in Russia possess a wide array of tools to protect their multi-million ruble investments. The "freedom of contract" (Art. 421 CC RF) allows them to demand far more than just a standard Security Deposit in the amount of 1 to 3 months.

In the large-scale logistics business and Class-A warehouses, landlords frequently add requirements for an Independent (Bank) Guarantee (Art. 368 CC RF) or personal Surety (Art. 361 CC RF) from the founders/directors of the tenant company. This guarantees that if the legal entity (LLC) goes bankrupt and abandons the premises, the rent debt can be legally collected through the bank or out of the director's personal pocket via court order.

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3. Rent Indexation (Commercial)

Article 614 of the Civil Code permits the amount of rent to be changed by agreement of the parties within the terms provided by the contract, but no more frequently than once a year, unless the contract provides otherwise.

In the B2B segment (Moscow, St. Petersburg), contracts are rigidly tied to indexation. Retail landlords (Shopping Centers/Malls) might tie the rate to the size of inflation (Rosstat data), a percentage of the store's revenue (turnover rent), or simply fix a hard percentage, for example, a planned rent increase of 5-10% every calendar year for a 10-year term. Foreign currency clauses are still encountered when renting elite warehouses (e.g., tying the rent to the USD Central Bank exchange rate).

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4. Capital Repairs and Renovations

The general rule (Art. 616 CC RF) states that the landlord is responsible for capital repairs, and the tenant is responsible for current repairs. In the commercial sphere, landlords actively exploit the legal loophole "unless otherwise provided by the contract."

As a result, a landlord might lease "bare concrete walls" (Shell & Core), completely shifting the burden to the business tenant for both the fit-out (at the tenant's expense without reimbursement) and the obligation to conduct all current and cosmetic repairs at their own expense over the 5-year life of the store. An important feature of Russia is Inseparable Improvements. If a tenant installs an expensive ventilation system with the owner's consent (without a clause regarding its dismantling or reimbursement), upon move-out, it will pass into the ownership of the building owner free of charge.

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