Avinyan's Office Provides Clarification on the Sale of Real Estate at 30/1 Republic Street

The office of Deputy Prime Minister Tigran Avinyan has issued a statement regarding the sale of real estate located at 30/1 Republic Street in Yerevan.

"The state property located at 30/1 Republic Street has been sold on the basis of a decision made by the Armenian government in March 2018, as an exceptional area recognized for public interest, not based on the letter of Deputy Prime Minister Tigran Avinyan.

1. The sale was conducted in accordance with Armenian legislation, not through the so-called direct auction.

2. The price of the sale contract was determined based on the cadastral value of the land.

3. The buyer(s) of the sold property are defined again by the Armenian government’s 2018 decision, and are not acquaintances of Deputy Prime Minister Tigran Avinyan.

More specifically, the legal processes related to the sale of the real estate at 30/1 Republic Street and adjacent areas began back in 2008, by the decision No. 1405 of the Armenian government recognizing certain areas within Yerevan’s administrative boundaries as exceptional and of public interest. However, the sale process was not implemented then.

Subsequently, the sale process of the property at the specified address entered a new phase when the area was included in the decision made by the Armenian government on March 22, 2018, recognizing the 33rd district (Firdusi) as exceptional and of public interest. This decision also authorized the Mayor of Yerevan to act on behalf of the Republic of Armenia in matters related to the sale of state property in the area.

Preceding the adoption of the government’s 2018 decision was the contract signed on March 19, 2018, between the Mayor of Yerevan and the buyers. This contract is annexed to the government’s decision recognizing exceptional public interest and came into force after the adoption of the decision. It set out the rights, obligations, and responsibilities of the state and the buyer during the property sale process, specifically requiring that the buyer must acquire state or community-owned land in the area before the completion of any urban development plan, with the cadastral value at the time of the contract signing serving as the basis for this calculation.

Thus, the legal decisions regarding the sale of the real estate were made prior to the 2018 revolution by the previous government. Later, in July 2020, the contract for the sale of real estate at 30/1 Republic Street was signed, based on the aforementioned government decision from March 2018; the sale was made in accordance with the specified procedure, rather than through this so-called direct auction.

It should be noted that such a method of sale, a direct auction, is not recognized by Armenian legislation, as property can only be sold through direct sale or public auction, but not through a method of direct auction that is unknown to legal regulations.

As for the price of the sale contract for the real estate, the difference in the price mentioned in yesterday’s publication is due solely to the difference existing between the market value of the land and its cadastral value. This issue is fully regulated by point 5.6 of the contract signed between the authorized body and the buyer on March 19, 2018, which states literally:

"The authorized body is obliged to sign a contract with the buyer for the sale of state or community-owned land within seven days after receiving notification from the buyer (...) The amount to be paid to the authorized body for that land, including applicable taxes, will be calculated based on the cadastral value in force on the date of signing this contract (the cadastral value in effect at that time)."

Thus, the value of the property sale was determined based on an assessment carried out by the appraising organization in accordance with the methodology established by Armenian legislation, which included the market price of the property plus 15% of the assessed market value of the property to ensure adequate compensation under the law on the mandatory compensation for the sale of property for ensuring public interest.

It is reminded that Deputy Prime Minister Tigran Avinyan's letter to the Yerevan municipality concerned exclusively the necessity of implementing the functions delegated to the mayor by the government’s decision, and it naturally did not contain any provisions regarding the value of the property sale or its calculation procedure.

It should also be noted that in this area, investors are effectively returning around 65% of the purchased area to the community (30% for roads, 35% for community-designated areas).

The claim that the buyer of the area is a friend of Deputy Prime Minister Tigran Avinyan is also unfounded, as the Armenian government established the buyers of all areas recognized as exceptional and of public interest by its decision made on March 22, 2018," the clarification stated.