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 for a month in Ukraine (the President’s Decree as of 17 May, 2022, No. 341/2022 martial law in Ukraine was extended until 23 August, 2022).
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:
– business entities renting the property for relocation will pay rent on preferential terms (UAH 1 per 1 sq. m.) during the first 6 months of the lease;
– by the end of 2022, tenants are relieved of the obligation to pay rent for the property located on the territory of administrative-territorial units, where users’ access to the unified and state registers held by the Ministry of Justice is suspended. These are the following regions: Donetsk, Luhansk, Kherson regions, Crimea and Sevastopol and parts of Mykolayiv, Kharkiv and Zaporizhia regions;
– exemption from paying rent for state property located on the territory of the regions where hostilities took place by the end of September 2022: Kyiv, Chernihiv, Sumy, Kharkiv, Zaporizhia, Mykolaiv regions and the city of Kyiv (outside the administrative-territorial units mentioned above);
– exemption from paying rent for the lease of state property is granted to tenants in Kirovohrad, Dnipropetrovsk, Zhytomyr and Odessa regions, but not longer than until 30 May 2022;
– 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;
– according to lease contracts of state property, concluded as a result of auctions held on or before 24 February 2022, tenants who are port operators and use property located in the seaports of Odesa, Chornomorsk, Pivdenny, Mykolaiv, Olvia, Bilhorod- Dnistrovskyi are exempt from rent payments starting from 24 February 2022 and until the time of full restoration of commercial shipping or the establishment by the Cabinet of Ministers of Ukraine of a level of security in the specified seaports lower than level 3 in each of the specified seaports;
– according to lease contracts of state property concluded as a result of the auctions held on 24 February 2022 or earlier, tenants who use property located in state-owned airports are exempt from rent, starting from 24 February 2022 and until the resumption of aviation activities of such airports;
– 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;
– transfer of farmland, which is in the permanent use of state and municipal enterprises, institutions, organizations, and on which there are no crops, is carried out with the written consent of the head of the state, municipal enterprise, institution, organization, and the right of permanent use of land is not terminated;
– 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 noted that detailed plans of territories located outside cities, villages, towns, for which comprehensive spatial development plans have not been approved, may be developed and approved in accordance with the planning plans of the territory (part of the territory) of the district and/or region.
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 17.06.2020 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
Since the beginning of the Russian military aggression against Ukraine, the work of the registers held by the Ministry of Justice of Ukraine has been suspended, including the work of the State Register of Real Property Rights. As a result, it was impossible to perform notarial and registration actions in the real estate sector.
As of June 2022, the functioning of some registers in a certain territory of Ukraine has been restored, however, with certain peculiarities. Currently, the territory where access to the registers has been suspended is determined by a special list approved by the order of the Ministry of Justice of Ukraine as of 1 April, 2022 No. 1307/5 (as amended). Currently, access to the registers is suspended in the following regions: Donetsk, part of Zaporizhia, Luhansk, part of Mykolaiv, part of Kharkiv, Kherson, as well as Crimea and Sevastopol.
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.