Immobilien- und Mietrecht in der Ukraine (Englisch)

Artikel gespeichert unter: Ukraine


INTRODUCTION (Rechtsanwalt Kifak)
This article provides the principal legal issues of Ukrainian real estate law and is focusing on purchasing of land. The information contained in this paper is not intended to be legal advice and should not be considered as the substitute for specific advice concerning certain issue.
There is a lot of heritage of former Soviet Union left in the modern Ukraine and legislation system is not exception. Although a lot of steps were made to harmonize the Ukrainian legislation with its most developed European neighbors there is a lot of work to be done. One of such peculiarities is that there is distinction between legal terms “real estate” and “land” with real estate having priority over the land. The real state owner has the primary right on the land use while in most European and American law systems it is vice versa. 
The impact of the World financial crisis has left its consequences for the Ukrainian markets. Still, as it was at all times, the real estate remains the most valuable and desirable asset. Since the price dropped significantly nowadays maybe the best time to own some valuable property for the fraction of its cost.

1. Legal framework of the land
1.1. Categories of land in Ukraine
Following the Land Code of Ukraine all the land is divided into a nine categories depending on their designative purpose of using (zoning). These categories are:
• Agricultural lands that include agricultural holdings (tillage, perennial plantations, hayfield, pastures) and non-agricultural holdings (tracts, forest shelter-belts, land under the buildings and yards, temporary conserved lands). Agricultural land may be zoned for farm-market (truck) agriculture, individual farming, gardening, or secondary (auxiliary) agriculture of non-agricultural companies.
• Land for industrial, transport, communications, energy, defense, and for other purposes that includes lands zoned for development and operation of main, auxiliary, subsidiary buildings and structures of industrial, mining, transport and other enterprises, as well as for their local railways, engineering networks, office spaces and other structures.
• Land for water resources includes inter alia protective shelterbelts along the seashore. The local authorities define the extension of these protective shelterbelts.
• Lands for residential and public construction.
• Lands for reserves and for other nature-conservative purposes.
• Lands for sanitary purposes.
• Lands for recreational purposes.
• Lands for historic and cultural purposes.
• Lands for forestry.
Some categories have few sub-categories. The State Committee for Land Resources of Ukraine has adopted the Classifier of designative purpose of using  giving to each category and sub-category special numbers. Once designated the zoning may be changed following the certain procedure.
Zoning of the land of state or communal property may be changed by the decision of the respective authority entitled to dispose this land. Changing of zoning of the private property land demands working of allotment plan (ukr. – projekt otwoda). To get a permission to work it out the owner has to apply to the local authority. The allotment plan has to be approved with (1) local land department, (2) local environment department, (3) sanitary-and-epidemiological authority, (4) architecture inspection, and (5) cultural heritage supervision authority, and also (6) is subject of land expertise.
Approved allotment plan is adopted by the local authority, which decision is the legal reason for obtaining of the new title document.
All land in Ukraine is subject to registration with the single system of the State land cadastre. All rights to land listed above are subject to mandatory state registration. Rights to land that have not been duly registered do not become effective. The coming into force of the lease right to land, being a purely contractual right, also depends on state registration of the lease agreement.
1.2. Interests on land
Ukrainian legislation provides for several interests on land. Three of them, namely, freehold, leasehold and permanent using are the most common. Such kinds of interests as heritable building right (Erbbaurecht) or usufruct (Niessbrauch) have been developed only recently and are less common.
Freehold gives the owner an absolute control over the land plot within framework of law. Freehold on land applies to the ground of the plot, water objects and plantations located on it. Freehold also applies to the spaces over and under the land plot necessary for the construction of buildings and other capital structures.
Freehold can belong to the government (state property), to the community (communal property), and to the individual or legal entity (private property). The delimitation of ownership between the state and communities is not finished yet, because this Transitive provision of Land Code of Ukraine provides for state administration to dispose lands outside settlements and land under the state enterprises, and the for local councils to dispose lands in the settlements.
Freehold is usually available for both Ukrainian and foreign individuals or entities, but some restrictions for foreigners exist (agricultural lands, in particular).
In Soviet period the majority of lands belonged to the collective farms. After the reforms collective farms was terminated, and all members of them had got a chance to get a part of their assets, including land. As it was too difficult to allot land plot to every member during short period, the members was satisfied with obtaining of the share in common property. The law allows them to ask for allotting of the personal land plot from the common ownership. This process is not finished yet, so there are a lot of individuals, who holds share in common land, but not the freehold ownership.

Leasehold is the contractual chargeable interest to use the land for the certain period of time (up to 50 years). Leasehold is available for any Ukrainian or foreign person without restrictions.
Permanent using interests is the institute inherited from the Soviet law. Under the actual Land Code of Ukraine (in force since January 2002) permanent using is available for only state and communal enterprises and for disable individuals societies and companies established by those societies. In former Land Code of Ukraine (1991) permanent using was available for wider circle of companies. As the result currently substantial number of private and joint-stock companies hold permanent using. There was a provision in actual Land Code that companies which is not allowed holding permanent using should transform it into one of the allowed interests, either freehold or land hold up to January 1, 2008. But recently the Constitution Court of Ukraine has abolished this provision saying that it limited company’s rights. As the result, there are many private companies holding permanent using interest.
Servitude allows passage and laying of way and communications through the alien land plot. Servitude may be arisen from law, contract, court decision or testament. It survives if the owner of the burden land plot is changed.

1.3. Restriction in interests on land

Ukrainian legislation provides for a number of restrictions in respect to land. The most likely applicable in our case is the moratorium on agricultural land deals and special restrictions for foreign companies or local companies established by them.
Up to January 1, 2010 it is prohibited:
(1) Sale and purchase of agricultural lands of state and communal property;
(2) Sale and purchase changing of zoning of the lands zoned for truck agriculture belonging to the individuals and legal entities, as well as land plots zoned for individual farming obtained by transforming of the share in common land.
This restriction shall be not valid since January 1, 2010 if the State Cadastre Law of Ukraine and Land Market Law of Ukraine will come in force. Currently both laws are not adopted by the Parliament and the approximate date of their approval could be hardly forecasted.
Land under the protective shelterbelts can’t be purchased and can’t be in private property. It can be rented from the local authorities.
The crucial restriction of the Ukrainian land law in respect to the foreign companies and their subsidiaries, daughters, etc. is that those companies are not allowed being owners of the agricultural land.
Another restriction is that foreign companies is allowed purchasing the land plot of non-agricultural purpose:
- In settlements (city, town, or village) (1) in case of purchasing the real estate over the land plot, and (2) for construction of real estate with the purpose of entrepreneurship;
- Outside settlement only (1) in case of purchasing the real estate over the land plot.
The difference between the foreign company and Ukrainian company with the foreign share in capital is that the later one is also allowed purchasing undeveloped land out of the borders of settlement for construction.

1.4. Sale and purchase of the land
1.4.1. Purchasing of the land of private property

Except agricultural lands the land of private property is available for purchasing by two ways. The first one is entering into a sale and purchase agreement, the second one is purchasing of the 100 % of the shares of company established before by the owner by contributing of land into the company’s charter capital.
Direct purchasing is the easiest way to purchase the land. There is no demand to get the prior approval for the authorities. The sale and purchase contract has to be certified by the notary officer to valid against third parties. But unlike other real estate sale and purchase contract on which is the title document itself, sale and purchase contract on land is not enough to become the owner, but only the legal basis for obtaining of the certificate of ownership on land.
Additional expenses for sale and purchases contract is 6 % and is broken dawn as follows:
- 5 % is individual income tax (usually born by the Purchaser);
- 1 % is the state (stamp) duty charge by notary officer (may be paid by both parties in shares).
This is more complicated deal as it demand establishing of company, contributing its charter capital, obtaining new certificate of ownership on company’s name, and selling of the shares. The reason why to do this way is possible saving on taxation. As it was mentioned before, the individual pays 5 % from the value of land. In case of transferring of shares only the difference between the transferring price and the value of contribution is taxable. If the transferring price is equal to the value contribution no taxable income arisen.
One more reason for the share deal instead of land deal is abovementioned restrictions for foreign companies to be the direct owners of the certain kinds of lands.
As there is no guarantee that moratorium on sale and purchase of the agricultural lands would expire in the beginning of year 2010, some ways exists to overcome this moratorium which have already been approbated in Ukraine.
The most common way to get agricultural land into the ownership includes the steps as follows:
- the initial owners relinquish from their ownership to the benefit of the government;
- the local government (state administration of the district where the land is located) accepts the land and take the ownership and put it in land reserve;
- being the owner and the disposer of the land in one person the local government change zoning of the land from the agricultural to such one necessary for the future owner;
- since zoning is change the local administration allots the land to the new owner.
The described scheme demands primary financial resources and reliable contract in the local government. Beside this it can be applied not to all cases. As it was mentioned before, the lands of state or communal property is to be sold only through the auction. It means that in certain cases nobody could give a guarantee that the land will come to that person, who finance primary owner’s refusal.
The alternative option is the redemption for so called public interest. Land Code of Ukraine allows authorities to nationalize lands for the construction of structures of public necessity.  But the Land Code limits cases of public necessity to:
Construction of building and structures of state or communal property;
- allocation of diplomatic missions;
- allocation of reserves or national parks;
- defense and national security needs;
- construction of transport, energy or telecommunication networks.
It means that the authorities can’t nationalize land of private property for the purpose of allocation of industrial capacities of the private company. It has to be considered as well that changing of zoning of agricultural land demands compensation of loses of agriculture. The Cabinet of Ministers of Ukraine has even approved the guidelines of estimation of such loses with table of approximate loses for each region.

1.4.2. Purchasing of the shares in land

The owners of the shares on land are not allowed to sell their shares now. They have to obtain the certificate of ownership before. This, however, doesn’t solve the problem because the land obtained from the share can’t be sold because of the moratorium.

1.4.3. Purchasing of land of state and communal property

Lands of state or communal property are to be sold on the auctions only, except those, where the real estate is located. The competent authority announces the auction by issuing of the advertisement in the mass media not less than 30 days before the day of the auction. In the same time it has to put plot advertisement boards at the land.
There is no national legal act governing land auction procedure in the whole Ukraine, so this procedure may varies from region to region. Procedure of purchasing of lands of state and communal property by foreign companies or their subsidiaries is very complex and demands involvement of Cabinet of Ministers and Parliament. In particular, the seller of state property land is the Cabinet of Ministers who has to get prior Parliament’s approval. The seller of communal property land is the local council (“rada”), who has to get prior Cabinet of Ministers’ approval.
The company that is interesting in purchasing undeveloped land plot at the auction has to submit an application to the auction holder together with the documents demanded by the auction rules. Auction rules vary from region to region, but usually it provides for submitting of company’s registration certificate and confirmation of transferring of secure payment. As practice shows, the Cabinet of Ministers’ approval should be obtained before filing documents to the auction holder.
The company that already rents the land plot of state or communal property, where its real estate is located, and is interesting in purchasing has to submit the application to the local state administration or to the local council respectively. The application is filed together with the copy of rent agreement.
The authority submitted by the application should send it to the Cabinet of Ministers to get the approval. There is no time limit for Cabinet of Ministers to issue the approval. After the approval is got, the authority has 30 days for making decision on selling the land plot.

1.5. Land lease

Land laws of Ukraine allow renting the land for the period up to 50 years, but usually undeveloped land is rented for the period of construction. After the construction is finished the owner of building is able to prolong the rent agreement or to purchase the plot.
The authorities empowered to give rent on land are local councils in respect to the land of communal property and lands inside settlements, and the local state administrations (Regional and District) in respect to the land of state property and lands outside settlements.
The company, who is interesting in renting land plot for the construction, applies to the local council (if the land is in border of city or village) to the local state administration (if the land if outside city). The authority issues a permit for making land allotment planning (project otwoda) within one month after the application is filed.
After getting the permit company orders draft allotment of land in the licensed land survey organization. Timing and costs are subject to Cabinet of Ministers regulations but it has not approved yet, so it has to be specified in the contract with land survey organization.
Allotment has to be agreed with (1) local land department, (2) local environment department, (3) sanitary-and-epidemiological authority, (4) architecture inspection, and (5) cultural heritage supervision authority, and also (6) is subject to land expertise. Timing for getting approvals and expertise report are usually fixed in the local legislation and may vary from region to region. It also depends on complexity of allotment.
After passing abovementioned procedure the company submits the allotment planning to the local council or local administration, which has to make a decision of entering the rent contract with one month. Rent contract is certified by notary and registered in local land department.
Rent payment is regulated. For land of industrial or commercial purpose it constitutes 5 % of monetary appraisal of tillage in the same region. 
To rent from individual it is not necessary to develop allotment because the borders of the plot are already specified in his title documents. The rent payment is subject to agreement as well as other conditions.
Land Code of Ukraine allows withdrawal of land of state or communal property being in leasehold or in use provided that the actual leaseholders or user agree it. The authorities competent to withdraw the lands are Regional State Administration and District State Administration (depending on status of land and purpose of withdrawal). 
The person who is interesting in getting leasehold on land already rented to somebody has to apply to the competent authority. The application should be supported by the actual leaseholder’s written confirmation of his of consent with possible withdrawal.
The further procedure is similar to the procedure of getting leasehold in land described above.

2. Legal framework of real estate
2.1. General provisions
Real estate relations are governed by a system of regulatory Acts pertaining to various branches of law – civil, land and town-planning:
• Civil Code of Ukraine No.435-IV, dated January 16, 2003 ,
• Commercial Code of Ukraine No. 436-IV, dated January 16, 2003,
• Land Code of Ukraine No. 2768-III, dated October 25, 2001.

According to the provisions of the article 181 of the Civil Code of Ukraine as immovable property are considered land plots and objects located on them which cannot be moved without their devaluation and change of their target use. The regime of immovable property can be also extended by the law to aircrafts and sea vessels, inland-navigation vessels, space objects and other things the rights thereto shall be subject to state registration.
Physical and legal entities are the subjects of private property, as well as Ukrainian State, Autonomous Republic of Crimea, territorial communities, foreign states and other subjects of public law.  There are no restrictions in respect of ownership of non-land real estate by non-residents. The Ukrainian Constitution guarantees ownership rights for land and the inviolability of private ownership. Guarantee of an ownership title means that an owner may not be deprived of his ownership rights other than by a court decision.
 The formation of the single state registration system has not been completed in Ukraine. In absence of the unified real estate registration system, a buyer might need to consult a number of registers to verify the “purity” of title to a real estate object.
The State register of mortgages, the Single state register of real estate disposition bans and the Register of encumbrances over movable property are publicly accessible. Extracts from the mentioned registers may be obtained upon submission of a written request in the standard form to the corresponding administering authority. Information contained in the State register of lands and the Register of ownership titles to real estate is of limited access, and may be obtained only at the request of the following entities:
1) Owners (users) of land/owners of non-land real estate objects, inheritors (legal successors), persons in favour of which encumbrances were established as well as the authorised representatives thereof;
2) Courts, law enforcement agencies, prosecutor’s office, state tax authorities, state enforce, notaries, security service of Ukraine and other state authorities (state officials).
 A contract for the sale and purchase of a land plot, an integral property complex, an apartment or other real property must be executed in writing, certified by a notary and registered at the state registry. All agreements related to transfer of the title to real estate, are subject to notarization and state registration. Such agreements are considered to be valid only after their state registration.

2.2. Ownership right registration

Ownership right registration in Ukraine is regulated by Temporary regulations on the registration of ownership of real estate.
State registration of ownership of real estate companies is conducted by Technical Inventory Bureau (hereinafter - BTI) within defined administrative units. Implementation of state registration of ownership of real property within the same locality by several BTI is not allowed.
State registration of ownership of real estate property (hereinafter - the registration rights) - is making entry in the Register of ownership of real estate property in connection with the occurrence, existence or termination of ownership of real estate property by BTI at the location of real estate objects on the basis of documents at cost of person that turned to BTI.
Registration of ownership of real estate property of individuals and entities, including foreigners and stateless persons, foreign legal entities, international organizations, foreign states and local communities is mandatory.
Registration subject to property rights only to objects of real estate, where construction is completed and taken into operation in due course, the availability of technical inventory prepared by BTI, which makes the registration of ownership of these objects. Temporary facilities are unregistrable.
Register of ownership of real property (hereinafter - the register of rights) is an information system that contains information on registered property rights on real estate objects.
Registration of property rights is executed in the following order:
- acceptance and verification of documents submitted for registration of ownership of real estate property;
- setting no grounds for refusal of registration rights;
- decision on registration of property rights or the denial of registration rights;
- entering records to the Register;
- making inscriptions on constitutive documents;
- issuance of extract from the Register of registration rights.
To register occurrence, existence, termination of ownership of real property and registration of ownership of real estate property, constitutive documents should be filed to BTI together with application and notarized copies.
To implement the registration of ownership of the real estate owner (owners) or duly authorized third the person submits an application form.
Consideration of the application and decision on the registration of rights or denial of registration shall be conducted in time that not exceed thirty days without dates of the inventory work, and the term of taking decision by authorized bodies.
Certificate of ownership contains the following information:
- title of real estate  property;
- place of issuance of the certificate;
- date of issuance of the certificate;
- name of the entity that issued the certificate;
- address (location) of real estate property;
- information about the owner (owners);
- ownership;
- type and size of particles of common property;
- date of the decision;
- surname, name the head of the head of the body that took the decision;
- signature of the head of the body that took the decision.
The body that issued the certificate seals certificate.

2.3. Leasing

According to the article 759 of the of the Civil Code of Ukraine under a contract of lease the lessor undertakes to provide the lessee some property for temporary possession and use or for temporary use. The right to transfer property on lease shall be vested with the owner of property or with the person to whom property rights belong. A person authorized to conclude a lease agreement may also be a lesser.
A lessee shall be charged for the use of property; the amount of charge shall be specified by a lease agreement. A lease agreement shall be concluded for the period specified by the very agreement. If a lease period is not specified, a lease agreement shall be considered concluded for an indefinite period. A lease agreement for the building or any other capital structure or a part thereof concluded for the period of three year or more shall be subject to notarization and state registration.
Together with the right to lease a building or any other capital structure or a part thereof the lessee shall be granted the right to use a land plot underneath this structure and the right to use the area adjacent to the building or structure in the size needed to reach the purpose of lease.
The Civil and Commercial Codes provide general rules relating to the lease of real estate held in private ownership.

3. Distinctive features of lease of municipal and state property

The Act on the Lease of State and Municipal Property of April 10, 1992 specifically regulates the lease of real estate held as State or Municipal Property.
The objects of lease under this Law, among others, are integral property complexes of enterprises, their business units and real estate (buildings, facilities). Integral property complexes are financial facilities with complete cycle of production (works, services) with the land on which it is located, autonomous communication networks and power systems.
Lessors are:
State Property Fund of Ukraine, its regional branches and representative offices - on the integral property complexes of enterprises, their business units and real estate.
Bodies authorized by Verkhovna Rada of the Autonomous Republic of Crimea and local governments to manage the property – integral property complexes of enterprises, their business units and real estate, which belongs to the Autonomous Republic of Crimea, or is in municipal ownership.
Enterprises - individually for separate property and estate, with the total area not exceeding 200 square meters for one company, and with the permission of aforementioned authorities - also on its structural divisions (branches, departments, districts) and property that exceeds an area of 200 square meters.
Tenants under this Act may be companies, other legal entities and citizens of Ukraine, the physical and legal persons of foreign states, international organizations and persons without citizenship.
An individual who wishes to enter into a lease of state property to use it for business, before signing of the contract is required to register as a business entity.
Natural and legal persons who wish to sign the lease agreement send the application, draft of lease agreement and other documents according to the list defined by the State Property Fund of Ukraine, to respective Lessor.
Body authorized to manage state property considers the materials submitted to him and within fifteen days after receipt sends the Lessor conclusions about the conditions of the lease or refusal to conclude a lease agreement.
 Essential conditions of the lease agreement are:
- Lease object (composition and value of the property);
- terms of the lease agreement;
- lease payment;
- the use of depreciation deductions;
- restoration of leased property and the conditions for its return;
- execution of obligations;
- enforcement of obligations - penalty (fine), surety, deposit, guarantee, etc.;
- implementation of Lessor’s control of the lease object;
- responsibility of the parties;
 - insurance of leases objects;
-  obligations of the parties to ensure fire safety of leases objects.
The concluded lease agreement must meet the essential conditions of typical lease agreement of respective lease object.
Terms of the lease agreement are valid for the entire term of the contract even if after its conclusion the legislation set the rules, which worsen the position of tenant. Before signing the lease agreement of state or municipal property object the evaluation of the lease object should be made.
Sublease of integrated property complexes is prohibited. Tenant has the right to sublease real estate, unless otherwise provided for the lease agreement. The term of sublease of the real estate can not exceed the term of lease agreement. Fee for sublease of property, which receives tenant, shall not exceed the rent payment of tenant.

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