The residents have now kicked into action and are planting a communal garden in order to make Cheryomushki the idyll that the council planned. Rather than waiting for the government to answer their demands they have decided to be proactive. Barabashkin appears and tries to quell the communal spirit and the magic dancing flowers created by the residents quickly wither and die. However, the group are saved by a magic fountain that causes Barabashkin to lose his voice. Terrified by the power of communal spirit Barabashkin runs away. 

Boris enters triumphantly to tell Lidochka that he has managed to save her flat. He expects her to be impressed that he has managed to talk Vara out of taking the flat for herself but instead she flies into a rage and complains that he is just as corrupt as those in power. It is not the happy ending that Boris had envisioned for them. 

Drebyenetsov enters looking for Baburov and Boris and Lidochka hide in order to observe what is happening. Drebyenetsov reveals that he has been fired from his position and that Baburov has his flat back. Barabashkin too has been demoted to the role of gardener. The citizens complaining has won and good has championed over corruption. In losing his power Vara also decides that Drebyenetsov is not worth being with and instead has risen to the position of floor manger and is making her own way in the world. 

The only piece of the jigsaw puzzle to resolve now is Sergei being able to tell Lucy how much he loves her. The citizens invent a magical bench that makes people tell the truth when they sit on it. Sergei capitalizes upon this and finally is able to tell Lucy how he feels about her. 

The residents gather one last time and sing about how much they love Cheryomushki. Whilst it is not perfect their shared sense of spirit has made it the place they always dreamed it would be. 

In this whimsical comedy the good guys get what they want and the bad guys get what they deserve.