REAL ESTATE LAW IN FOCUS
- Date: 05.02.2018
- Author: Vladyslav Kysil
- Practice: Real Estate and Construction
- Industries: Banks, insurance, leasing and financial companies, The participants of the real estate market, Industrial and Production Companies, Agricultural Companies
LAND LEASE E-REGISTRATION
Agricultural land lease may be registered online on https://online.minjust.gov.ua/. The Ministry of Justice, Ministry of Agrarian Policy and Food, State Agency for E-Government and the Eastern Europe Foundation have launched the new online service to make registration of agricultural land lease agreements easy and quick. Thus, to register the lease one should download a scanned agreement and add the digital signature. As soon as submitted information is automatically verified with the State Land Cadaster it is to be registered in the Public Title Register within 5 business day.
The new option will reduce the burden on state registrars and save parties’ time.
LAND MORATORIUM
We are sad to say that moratorium on sale of agricultural land was extended until January 1, 2019 once again. As commented by the parliament members the renewal shall remove social tension that has arisen in the society amid political speculations on this issue and will provide some time to introduce a transparent market of agricultural land. Due to another opinion prolongation of moratorium puts the national economy growth on hold.
OVER 300 REGULATORY ACTS WERE CANCELLED
The Ministry of Economic Development and Trade of Ukraine rejects regulation clamp on business, particularly over 300 obsolete legal acts were cancelled. Moreover the number of orders to support Ukrainian business was adopted. Particularly the foreign representative offices in Ukraine do not require approvals from the Directorate-General for Rendering Service to Diplomatic Mission (so called GDIP) to acquire or lease real property anymore.
REGISTRARS’ REJECTIONS MAY BE EFFECTIVELY APPEALED
On January 4, 2018 the new order of the Cabinet of Ministers of Ukraine regulating mechanism to appeal state registrars’ decision re real estate titles came into force. According to it the Ministry of Justice and its territorial bodies shall cancel its negative decision by adopting the relevant order within 5 business days after the relevant decision was challenged in court. The appeal shall be considered again on the next day after adopting such an order.
In case any other information has been registered while the negative decision was appealed, the state register shall cancel such registration and register the one specified in court decision.
ESCROW IN REAL ESTATE
The National Bank of Ukraine has finally introduced the rules on banking escrow services by adopting the Order No. 133 dated 18.12.2017 which particularly governs and provides:
- opening and closing of escrow accounts;
- the list of documents to be submitted by the clients;
- the exhaustive list of escrow operations;
Banks being the escrow agents have the right:
- to execute escrow agreements;
- to credit funds to an escrow account; and transfer them to the beneficiary account or pay in cash;
- to identify the beneficiary and his right to get the funds;
- to pass the funds to the beneficiary within three years.
Particular attention is paid to the foreign investors who may now use escrow accounts by investing in Ukraine (acquiring or selling real property, corporate rights, shares etc.).
WHAT WOULD BE CONSTRUCTED WITHOUT URBAN PLANNING CONDITIONS AND RESTRICTIONS?
The Ministry of Regional Development and Construction has approved the list of construction objects to be constructed without the need to obtain urban planning conditions and restrictions (the order No. 289 dated 06.11.2017). Among them are the following:
• mining and enrichment plant and wells outside the city;
• artesian wells, pumping wells and complexes;
• systems (including accounting devices) of heating, ventilation, water supply, drainage, gas supply (including special), power and low-current systems, to maintain buildings, as well as roof solar power plants (mini-power plants);
• reconstruction of production facilities and engineering networks, including auxiliary buildings of the enterprise, that doesn’t affect its function or space;
• transport equipment or auxiliary constructions (automobile, underground, railway transport) within land plots and their functional purpose;
• temporary constructions under the Procedure for placement of temporary constructions for business purposes;
• reconstruction of underground, above ground and air engineering networks.
• replacement of air lines by cables;
• small architectural forms, outdoor advertising, fencing, and its reconstruction;
• playgrounds constructed under urban-planning documentation and any other accomplishment;
• construction of mobile communications and their external engineering networks complying with sanitary and building rules, architectural and planning requirements;
• construction of two-storied cottages, summer and garden houses with a total area of up to 300 sq.m., with outbuildings and garages;
• reconstruction of residential and non-residential premises keeping their external functional purpose. Construction of in-built premises in public buildings;
• external fitting (antennas, air conditioners, etc.).
THE NEW FORM OF CONSTRUCTION PASSPORT
On January 2, 2018 the order of Ministry of Regional Development and Construction No. 298 came into force introducing the new form of construction passport. Particularly it shall contain information on the survey results to be complied with technical regalements, construction and safety requirements. Please kindly note that constructions of medium and high class of consequences buildings (CC2 – CC3 categories) are subject to mandatory repeating technical inspection after its commissioning.
VACANT APARTMENT: HOW TO CHECK, Form No.3 IS NOT REQUIRED ANYMORE?
On December 04, 2017 the Ministry of Justice of Ukraine amended the Notary Order. Now the seller’s/mortgagor’s written statement on absence of minors, incapacitated or limited-capacitated persons registered in the apartment is enough to register the transfer of titles to the apartment. Thus a notary does not request any relevant statement issued by housing department or any other body authorized to register persons’ residence (called Form No.3).
To mitigate possible risks related to the issue the notaries will have access to the Register of City Territorial Community (now operated in Kyiv and some other regions) to be launched all over Ukraine.
Also please note the vendors may provide valuation report to a notary to make copies only. The original hardcopy shall remain in vendors’ files.
ENVIRONMENTAL IMPACT ASSESSMENT
In December 2017 the Cabinet of Ministers of Ukraine adopted the number of regulations to execute the Law of Ukraine On Environmental Impact Assessment namely the Public Hearings Order and the Order On Environmental Impact Assessment Register. Thus according to the Order the relevant register will be launched soon.
Please note that according to the Law reconstruction, overhaul and renovation are not subject to environmental impact assessment.
LAND & REAL PROPERTY TAX
According to amended item 126.3 and item 266.10.2 of the Tax Code of Ukraine in case tax authorities have not handed the tax notice-decision on real estate tax within the terms specified in the Tax Code a tax payer (individual) shall be exempt from any liability.
Now it is clearly stipulated that the real estate tax may be charged for the period of no more than 1095 days (item 102.1 of the Tax Code).
SQUEEZE-OUT/SELL-OUT REGISTRATION ISSUES
The Cabinet of Minister of Ukraine amended the Order On Register of Encumbrances over Movable Property with Art. 161 according to which the encumbrance related to squeeze-out/sell-out will be registered in the above Register under the relevant shareholders’ statement according to Art. 65-2 of the Law of Ukraine On Joint Stock Companies.
ELECTRONIC TRUST SERVICES
This year the Law of Ukraine On Electronic Trust Services will come into force. The new Law was adopted to harmonize Ukrainian legislation with Regulation (EC) No. 910/2014 of the European Parliament and Council of July 23, 2014 on electronic identification and trust services in order to carry out electronic transactions in the internal market.
The new legislation will positively affect business processes; moreover it shall make public services more transparent and quick. The new Law will come into effect in November 2018.
Should you have any questions with respect to above or require any additional information, please do not hesitate to contact Mr. Vladyslav Kysil (v.kysil@kpdconsulting.com.ua) or Mr. Mykhailo Semka (m.semka@kpdconsulting.com.ua). We will be pleased to assist You. The information contained in this overview is not intended to provide legal advice and should not be relied on or treated as a substitute for specific advice concerning individual situations.