REAL PROPERTY
Regarding lease of real estate
The President’s Decree as of 24 February 2022, No. 64/2022 “On the Introduction of Martial Law in Ukraine” imposed martial law.
The imposition of martial law because of the military aggression of the Russian Federation against Ukraine is considered force majeure, which occurred in Ukraine on 24 February 2022, as confirmed by the Ukrainian Chamber of Commerce and Industry (UCCI).
In this regard, performing lease agreements is subject to special provisions prescribed in the lease agreement, which determine the order of actions of the lessee and the lessor in case of force majeure.
Nevertheless, the occurrence of force majeure is not an unconditional basis for the release of the parties from their obligations under the lease agreements. A party who has breached the obligations should contact the other party with a notice of force majeure and relevant evidence of inability to fulfill the obligations.
As a practical matter, the party who violated the obligations during the period of force majeure, has the right to apply to the UCCI and its authorized regional CCI for a certificate of force majeure. (For additional information, please contact the UCCI ne and regional CCI: https://ucci.org.ua/naivazhlivishe/contacts-iuridichno-konsultativni-poslugi)
Regarding lease payments
If lease agreements do not contain special provisions regarding lease payments, then in accordance with Article 762 (4) of the Civil Code of Ukraine, a tenant has the right to demand a reduction in payment, if due to circumstances for which he is not responsible, the possibility of using the property has decreased significantly. Moreover, in accordance with Article 762 (6) of the Civil Code of Ukraine, a tenant is relieved of the obligation to pay rent for the period during which the tenant could not use the leased property, where this is due to circumstances for which the tenant is not responsible
Regarding lease of state and communal property
Effective as of 13 April 2022, Law of Ukraine No. 2181-IX “On amendments to the Law of Ukraine on the lease of state and municipal property” authorized the Cabinet of Ministers of Ukraine to determine wartime-specific rules of the lease of state and municipal property regarding, in particular, rent discounts, lease term, automatic lease term extensions, etc.
Therefore, the Cabinet of Ministers adopted a Resolution as of 17 May 2022 No. 634 “On peculiarities of lease of state and municipal property during martial law”, which introduces the following changes in the lease of state and municipal property during martial law in Ukraine, in particular:
– in the rest of the country tenants of state property are given a discount of 50%, tenants of single property complexes are given a discount of 25%;
– persons who were called up or accepted for military service after the declaration of martial law are exempt from paying rent;
– local governments will be able to make additional decisions on dismissals and discounts on leases of communal property;
– lease agreements that are completed during martial law will automatically continue. Lease agreements may be terminated early at the request of a tenant.
Regarding land issues
On 24 March 2022, the Parliament of Ukraine adopted the Law of Ukraine No. 2145-IX “On Amendments to Certain Legislative Acts of Ukraine on Creating Conditions for Ensuring Food Security during Martial Law”, which provides for the following innovations during martial law:
– automatic extension of those farmland lease (sublease, emphyteusis) agreements that expire during martial law for a one-year period;
– farmland will be transferred into the lease by a relevant district military administration without land auction for up to 1 year;
– rent rate must not exceed 8% of the land’s normative monetary value;
– lease agreement will be executed in e-form for a year without land auction;
– free transfer of state and communal lands to private ownership is prohibited;
– land auctions for lease rights, emphyteusis, superficies for farmland of state and communal property are not held;
– formation of a land plot for the purpose of its lease is carried out without entering information about such land plot into the State Land Cadastre (state registration) and assigning it a cadastral number, only on the basis of technical land management documentation for land inventory.
The Law of Ukraine No. 2247-IX provides for simplification of the lease of land of state and communal property – primarily the location of production facilities of enterprises relocated (evacuated) from the war zone, critical infrastructure and accommodation facilities for the temporary stay of internally displaced persons. The process of locating such production facilities, as well as construction of river ports (terminals), railway logistics centers (production and transshipment complexes) will be conducted without development of land management documentation, approved urban planning documentation and without associated costs – only on the basis of motivated conclusion of the authorized body of urban planning and architecture of a village or city council.
On 9 June 2022, the Law of Ukraine № 2254-IX came into force, which is aimed, in particular, at introducing procedures for location of production facilities of enterprises relocated (evacuated) as a result of Russia’s armed aggression against Ukraine.
To locate facilities of enterprises relocated (evacuated) from the combat zone, it is allowed to establish and change the purpose of land under a simplified procedure, which provides special conditions for establishing and changing the purpose of land of state and municipal property. In particular, it is possible not to follow the rules of the relationship between the type of purpose of the land (in case of change of purpose of the land – a new type of its purpose) and the type of functional purpose of the territory defined by relevant urban planning documentation. At the same time, it is mandatory to comply with restrictions on land use (including in the field of construction), the requirements of regulations, building codes and other regulations.
If there is no approved urban planning documentation at the local level in the territory where the relevant land plot is located, the decision to establish or change the purpose of such land is made on the basis of a reasoned opinion of the authorized body of urban planning and architecture of village, town or city council, or in the cases specified Article 13 (2) of the Law of Ukraine “On Architectural Activity” – the authorized body of urban planning and architecture of the local state administration, within 10 working days from the date of receipt of the request for its provision.
It should be added that according to the Law of Ukraine No. 2254-IX the town-planning documentation approved before the entry into force of this Law remains valid, and amendments to such documentation are allowed without considering the requirements of the Law of Ukraine as of 17 June 2020 No. 711 on its composition and content.
The Law of Ukraine No. 2530-IX as of 16 August 2022, provides for the following provisions in order to simplify development and restoration of electronic communication networks:
● during martial law in Ukraine and within six months from the date of its termination or cancellation, placement of electronic communications facilities on state and communal lands up to 0.05 hectares is conducted without the approval of the Cabinet of Ministers of Ukraine;
● the property holder may decide to transfer the property for lease on his own initiative, without the approval of the authorized management body;
● electronic communications operators have the right to lease state and communal property without an auction for placement of technical means and/or electronic communications facilities;
● agreements concluded with electronic communications operators for placement of technical means and/or electronic communications facilities may be extended without an auction;
● the agreement on access to the infrastructure of the object for the purpose of using it or its elements to ensure the possibility of providing telecommunication services is terminated if the respective infrastructure or the technical means of electronic communications are destroyed as a result of military actions;
● the only technical conditions for access to the entire list of infrastructure elements of the access object defined by the customer are developed and issued.
Regarding administrative services in real estate sector
According to the Resolution of the Cabinet of Ministers of Ukraine as of 19 April, 2022 No. 480, the possibility of performing notarial and registration actions in the real estate sector is restored with certain exceptions and restrictions.
As a general rule, state registrars, officials of the Ministry of Justice of Ukraine and notaries (including private ones) included in the list of notaries who perform notarial acts on valuable property during martial law have the right to perform registration actions in the real estate sector.
State registration of rights to immovable property is carried out by notaries within the region at the location of immovable property, and registration of rights to immovable property located in Kyiv or Kyiv region is carried out by notaries whose workplace (office) is located in Kyiv or Kyiv region, except for the state registration of rights as a result of registration of inheritance.
With the entry into force of Law No.3603 on 16 March 2024, it is stipulated that no land payment (land tax and rent for state and municipal land plots) is charged or paid for land plots on which residential and/or non-residential real estate destroyed as a result of hostilities, terrorist acts, sabotage caused by the armed aggression of the russian federation against Ukraine is located, data on the destruction of which and data on the land plots on which the said real estate objects were located are entered in the State Register of Property Damaged and Destroyed as a Result of Hostilities, Terrorist Acts, Sabotage Caused by the Armed Aggression of the russian federation against Ukraine within the areas (land plots) defined by this Law.
In accordance with the Resolution of the Cabinet of Ministers of Ukraine “On Ensuring the Protection of National Interests in Future Claims of the State of Ukraine in Connection with the Military Aggression of the Russian Federation” No. 187 dated 03 March 2022, in order to ensure the protection of national interests in future claims of the state of Ukraine in connection with the military aggression of the Russian Federation, to establish a moratorium (ban) on the following regarding persons associated with the aggressor state:
1) fulfillment, including through enforcement, of monetary and other obligations, the creditors (claimants) of which are the Russian Federation or persons prescribed by the resolution (hereinafter – persons associated with the aggressor state):
2) alienation, pledging, any other actions that result or may result in alienation of real estate, securities, rights of participation in a legal entity (shares, units, stakes in the authorized capital or other objects of civil rights, that certify participation in a legal entity), rights of claim against a debtor in bankruptcy (insolvency) cases, vehicles, aircraft, ships, inland navigation vessels of the Russian Federation or persons associated with the aggressor state, except as provided by the resolution:
3) alienation, pledge, or any other actions that result in or may result in alienation of real estate, securities, participation rights in a legal entity, rights of claim against a debtor in bankruptcy (insolvency) cases, vehicles, aircraft, ships, inland navigation vessels in favor of persons associated with the aggressor state or the Russian Federation, except for their acquisition of ownership of such objects on the basis of a court decision or certificate of inheritance.