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AGRICULTURAL LAND USE REGULATION IS IMPROVED

On July 10, 2018 the Verkhovna Rada of Ukraine adopted the Law of Ukraine On Amendments to Certain Legislative Acts of Ukraine on the Issue of Collective Ownership of Land, Improving the Land Use Rules in Agricultural Land Massifs, Preventing Raidering and Stimulating Irrigation in Ukraine (hereinafter – the “Law”) introducing the following novelties:

COLLECTIVE OWNERSHIP OF LAND

The Law defines the legal status of collective ownership of land, which remained after sharing.

Since January 1, 2019 the land previously owned by terminated collective agricultural enterprises (CAE) will become the property of territorial communities where they are located (except for the land plots that were privately owned on this date).

The owners of unclaimed land shares or their heirs are granted a term to January 1, 2025 to formalize the ownership of the land. If they don’t do this, it`ll be considered that they have refused to obtain a land plot.

The land remaining in the collective ownership of the reorganized CAE can be shared by the members of such enterprises. It`s possible under the following conditions:

- the collective enterprise was not terminated as a legal entity;

- such land is not transferred to someone else;

- the majority of persons who were allocated land plots in the amount of land share agreed.

If the land will not be distributed till January 1, 2019 the relevant local council shall arrange land distribution.

Otherwise, after January 1, 2025, local councils may apply to court for transferring these lands to the communal property by recognizing the unallocated land as an ownerless property.

CONSOLIDATION OF LAND PLOTS

Owners of agricultural land can exchange their land plots. State or communal land plots (private property - within duration of the moratorium) can be exchanged only if their normative monetary value is equal or the difference does not exceed more than 10 percent.

The Law also makes advances to persons who have the right to use (under the lease/emphyteusis) land plots with a total area of not less than 75 percent of all lands in the land area. Particularly to simplify the land use and to consolidate the lands such land users may lease or sublease the neighboring lands by exchanging the lands with the landlords.  

Also the land tenants (subtenants) get the right to exchange their lease rights by entering into lease agreements. The subtenants do not require any landlord’s consent but the tenant shall notify the landlord hereof in writing within 5 days from the date of sublease state registration.

Please note the new Law also limits the term of emphyteusis (land use for agricultural purposes) to 50 years.

SHELTER BELTS AND FIELD ROADS

Land auctions are not held for renting a land plot of state or communal property under field roads by landlords or land tenants of adjacent land plots. Such land plots may be used by landowners (land users) for passage or for cultivation of agricultural products.

The lands under shelter belts may also be leased. In this case the lease agreement shall provide tenant’s mandatory obligation to save the belts and particularly their windbreak functions.

The new Law is aimed to improve the rules of land use in respect of large tracts of agricultural land, to prevent illegal takeovers, and to promote irrigation in Ukraine. Please note the Law will come into force on January 1, 2019.

ENERGY REGULATION IS IMPROVED

On September 4, 2018 the Verkhovna Rada of Ukraine adopted the Law Ukraine On Amendments to Certain Legislative Acts of Ukraine (Regarding Investment Attractiveness of the Construction of Renewable Energy Facilities).

According to the latest draft law, available on the Ukrainian parliament website, a wind farm construction is excluded from the class СС2 and can be classified as СС1 if the positive opinion of the authorized body for the environmental impact assessment is received. Thus commissioning may be greatly simplified as a respective declaration will be enough to commission.

Vladyslav Kysil

Partner  

KPD Consulting

 

 

Mykhailo Semka

Senior Associate

KPD Consulting

 

 

Anastasiia Polishchuk

Associate

KPD Consulting

 

 

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). We will be pleased to assist you.

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.

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