Chapter 53. Property Trust.

Article 1012. The contract of trust management of property.
1. Under a contract of trust management of property, one party (the founder of management) transfers to the other party (trust manager) for a fixed term the property in trust management, and the other party undertakes to manage this property in the interests of the founder of management or the person (beneficiary) specified by him. The transfer of property to trust management does not entail the transfer of ownership of it to the trustee. 2. By carrying out trust management of property, the trustee is entitled to take in respect of this property in accordance with the trust management agreement any legal and factual actions in the interests of the beneficiary. Restrictions may be provided for by a law or contract in respect of certain actions on trust management of property. 3. The trustee administers transactions with the property transferred to the trust management on his own behalf, indicating that he acts as such trustee. This condition is deemed to be met if, when committing actions that do not require written registration, the other party is informed of the trust manager in their capacity as they were performed, and in written documents after the name or the name of the trustee manager, the note “D.U.” is made. In the absence of an indication of the action of the trustee in this capacity, the trustee undertakes personally to third parties and is liable to them only with the property belonging to him.

Article 1013. Object of trust management.
1. Objects of trust management may be enterprises and other property complexes, certain objects relating to real estate, securities, rights certified by non-documentary securities, exclusive rights and other property. 2. Money may not be an independent object of trust management, with the exception of cases provided by law. 3. Property under economic management or operational management cannot be transferred to trust management. Transfer to trust management of property that was in economic management or operational management is possible only after liquidation of a legal entity in whose economic management or operational management of which property was located, or termination of the right of economic management or operational management of property and receipt of it into the ownership of the owner otherwise specified by law grounds.

Article 1014. The founder of management.
The founder of trust management is the owner of the property, and in the cases provided for in Article 1026 of this Code, another person.

Article 1015. Trustee.
1. The trustee may be an individual entrepreneur or a commercial organization, with the exception of a unitary enterprise. In cases when the trust management of property is carried out on the grounds provided by law, the trust manager may be a citizen who is not an entrepreneur, or a non-profit organization, with the exception of an institution. 2. The property shall not be transferred to the trust management of the state body or local self-government body. 3. The trustee may not be a beneficiary under a contract of trust management of property.

Article 1016. The essential terms of the contract of trust management of property.
1. The following shall be indicated in the contract of trust management of property: the composition of the property transferred in trust management; the name of the legal entity or the name of the citizen, in whose interests the property is managed (founder of management or beneficiary); the size and form of remuneration of the manager, if the payment of remuneration is provided for by the contract; contract time. 2. A contract of trust management of property shall be concluded for a period not exceeding five years. For certain types of property transferred into trust management, the law may establish other deadlines for which a contract may be concluded. In the absence of a statement by one of the parties to terminate the contract at the end of its term, it is considered extended for the same period and on the same conditions as were provided by the contract.

Article 1017. The form of the contract of trust management of property.
1. A contract of trust management of property must be concluded in writing. 2. The contract of trust management of real estate must be concluded in the form provided for the contract of sale of real estate. The transfer of real estate in trust management is subject to state registration in the same manner as the transfer of ownership of this property. 3. Non-observance of the form of a contract of trust management of property or a requirement to register the transfer of real estate into trust management shall entail the invalidity of the contract.

Article 1018. Segregation of property held in trust.
1. Property transferred in trust management shall be separated from other property of the founder of management, as well as from property of the trustee. This property is reflected in the trustee on a separate balance sheet, and it maintains independent records. A separate bank account is opened for settlements on activities related to trust management. 2. Levy of execution on debts of the founder of the management of the property transferred to them in trust is not allowed, except for the insolvency (bankruptcy) of this person. In the event of the bankruptcy of the founder of the management, the trust management of this property is terminated and it is included in the bankruptcy estate.

Article 1019. The transfer to trust management of property encumbered by a pledge.
1. The transfer of the pledged property into trust management shall not deprive the mortgagee of the right to foreclose on this property. 2. The trustee must be warned that the property transferred to him in trust is burdened with a pledge. If the trust manager did not know and should not have known about the encumbrance of the property transferred to him in trust, he is entitled to demand in court that the trust agreement be terminated and that he be paid a remuneration for one year.

Article 1020. Rights and obligations of a trustee.
1. The trustee shall, within the limits provided for by the law and the contract of trust management of property, exercise the powers of the owner with respect to the property transferred to trust management. The trust manager shall dispose of the immovable property in the cases provided for by the trust management agreement. 2. The rights acquired by the trustee as a result of actions for the trust management of the property shall be included in the composition of the property transferred to the trust management. The obligations arising from such actions of the trustee are performed at the expense of this property. 3. In order to protect the rights to property held in trust, the trustee has the right to demand any elimination of the violation of his rights (Articles 301, 302, 304, 305). 4. The trustee submits to the founder of the management and the beneficiary a report on its activities within the time limits and in accordance with the procedure established by the contract of trust management of property.

Article 1021. Transfer of trust management of property.
1. The trustee manages the trust management of the property personally, except as provided for in paragraph 2 of this article. 2. The trustee may instruct another person to perform on behalf of the trustee the actions necessary to manage the property, if he is authorized to do so by the contract of trust management of the property, or received the founder’s consent in writing, or is forced to do so due to circumstances the founder of the management or beneficiary and does not have the opportunity to receive instructions from the founder of the management within a reasonable time. The trustee is responsible for the actions of his chosen attorney as for his own.

Article 1022. Responsibility of the trustee.
1. The trustee, who did not show due care in the interests of the beneficiary or the founder of the management, reimburses to the beneficiary the loss of profit for the time of the trust management of the property, and the founder of the management of losses caused by loss of or damage to property, taking into account its normal wear and tear, as well as loss of property benefit. The trustee is liable for the losses incurred if he does not prove that these losses occurred as a result of force majeure or the actions of the beneficiary or the founder of the management. 2. Obligations under a transaction made by the trustee in excess of the powers granted to him or in violation of the restrictions established for him shall be borne by the trustee personally. If the third parties involved in the transaction did not know and should not have known about the excess of powers or about the established restrictions, the obligations arising are subject to execution in the manner prescribed by paragraph 3 of this article. In this case, the founder of the management may demand compensation from the trustee for losses incurred by him. 3. Debts on obligations arising in connection with the trust management of property shall be repaid at the expense of this property. In the event of insufficiency of this property, a penalty may be levied on the property of the trustee, and in case of insufficiency of its property, on the property of the founder of management, not transferred to trust management. 4. The contract of trust management of property may provide for the provision by the trustee of a pledge to secure compensation for damages that may be caused to the founder of the management or beneficiary by the improper performance of the agreement of trust management.

Article 1023. Remuneration to the Trustee.
The trustee has the right to remuneration provided for by the contract of trust management of property, as well as to reimbursement of necessary expenses incurred by him during the trust management of property, at the expense of income from the use of this property.

Article 1024. Termination of the contract of trust management of property.
1. A contract of trust management of property shall be terminated due to: death of a citizen who is a beneficiary, or liquidation of a legal entity beneficiary, unless otherwise provided by the contract; refusal of the beneficiary to receive benefits under the contract, unless the contract provides otherwise; the death of a citizen who is a trustee, recognition of his incapacitated, partially capable or missing, as well as recognition of an individual entrepreneur as insolvent (bankrupt); the refusal of the trustee or the founder of management of the implementation of trust management in connection with the impossibility for the trustee manager to personally carry out trust management of the property; refusal of the founder of management of the contract for reasons other than that specified in paragraph five of this paragraph, subject to payment of the remuneration to the trust manager; recognition as insolvent (bankrupt) of a citizen-entrepreneur who is the founder of the management. 2. If one party rejects the contract of trust management of property, the other party must be notified about this three months before the termination of the contract, unless a different notice period is provided by the contract. 3. Upon termination of the contract of trust management, the property in trust management shall be transferred to the founder of the management, unless otherwise provided by the agreement.

Article 1025. Transfer of securities to trust management.
When transferring to trust management of securities, it may be possible to provide for the consolidation of securities transferred to trust management by different persons. The powers of the trustee to dispose of the securities are determined in the trust management agreement. Features of trust management of securities are determined by law. The rules of this article apply accordingly to the rights certified by non-documentary securities (article 149).

Article 1026. Trust management of property on the grounds provided by law.
1. Trust management of property may also be established: due to the need for permanent management of the property of the ward in cases provided for in Article 38 of this Code; on the basis of a will, in which a testament executor (executor) is appointed; for other reasons provided by law. 2. The rules provided for by this chapter shall apply accordingly to the relations of trust management of property established on the grounds specified in paragraph 1 of this article, unless otherwise provided by law and does not follow from the substance of such relations. In cases when trust management of property is established on the grounds specified in paragraph 1 of this article, the rights of the founder of management, as provided for by the rules of this chapter, belong to the guardianship authority, the executor (executor) or another person specified in the law.

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