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COUNTERING RAIDING

On July 15, 2020 all the provisions of the Law of Ukraine On Amendments to Certain Legislative Acts of Ukraine to Combat Raiding (the “Law”) came into force, implementing a set of amendments for farmers and owners of land plots. The key points related to introduced amendments are the following.

RENEWAL OF AGREEMENTS

From now on, it is necessary that two options be distinguished in land lease relations: (i) renewal of a land lease and (ii) priority right to enter a new land lease agreement by the tenant who has duly fulfilled his obligations.

The issue on automatic renewal of a land lease agreement has been considered by courts for a long time but no single position has been formulated yet. Now the Law provides opportunity for the parties to set forth condition to automatically renew land lease, servitude, emphyteusis or superficies agreements. In case the parties set forth such condition, the term of this property right will be automatically extended upon the expiration date.

Each of the parties may refuse from renewal of the agreement by submitting application on excluding the relevant information on agreement renewal from the Register of Titles to Real Property one month before the agreement expiration date. Thus, the Law approved the principle of tacit consent of the parties to renew an agreement.

Please kindly note these amendments are applied only to agreements, executed or amended after the Law comes into force.

The parties may not implement such condition in an agreement in respect of communal or state land plots. The exception to this rule is the case when a building owned by a user or other title holder to the land plot is located on such a plot.

In case of absence of the renewal condition, the land tenant, having duly fulfilled his obligations within the term of the land lease agreement, gets the priority right to conclude the new one. The tenant shall inform the landlord of his intention to exercise his priority right one month before the expiration date of the lease agreement.

In case the land lease agreement is executed in respect of a communal or state land plot, the land lease agreement may be concluded only under the decision of the authorized body.

In addition to the specified condition on renewal or non-renewal of the agreement, the date of conclusion of the land lease agreement and its term will be also the mandatory attributes of information, providing for state registration,.

The dispute over the expiration date of a land lease agreement is settled as follows: the expiration date of a lease agreement is calculated from the date of its conclusion. The lease title passes to a tenant at the moment of his lease title state registration.

REQUIREMENT FOR NOTARIZING LEGAL ACTS

Law introduces the requirement for notary certification. The owner of the land plots may set the requirement of agreement notary certification. Such requirement may be established for notary certification of: land lease agreements, servitude agreements, emphyteusis or superficies agreements.

Establishing this requirement must be notarized. By its nature, the requirement is an encumbrance of title to land and is subject to state registration as well. Setting this requirement is the landlord’s right, that’s why only he may initiate it.

In case of establishing such requirement, any amendments to the above agreement must be notarized. This procedure shall protect landlord’s rights, but may result in appearing difficulties for land tenants.

MORTAGAGE = ENCUMBRANCE

Now the mortgage is assigned to encumbrance of real right to immovable property (it. 2 of Art. 4 of the Law of Ukraine On state registration of Real Rights to Immovable Property and Their Encumbrances). As a result, a mortgage can be registered regardless of property location.

PRICE OF REAL ESTATE PROPERTY OR PROPERTY RIGHTS

Now the Register of Titles to Real Property shall include information on the price of real property or property rights or the amount of rent under the relevant agreements.

If the documents, submitted for state registration of property rights, do not specify such information, it will not be specified in the Register of Titles to Real Property and the state registrar may not require any additional documents.

This information may be provided only upon the request of the owner or authorized bodies.

There is no obligation to update such information in case it will be changed (for example, the rent amount).

At the same time, the Law stipulates the rent for state and communal lands leased at land auctions may not be reduced by an additional agreement within the term of the lease agreement, as well as in case of its renewal.

WHAT SHALL TENANT DO IN CASE OF LANDLORD`S DEATH

If the land lease agreement, which does not contain conditions for its renewal, expires on the day or after the death of the landlord, the agreement shall be renewed at the tenant’s request for the same period and on the same terms until the successor’s title to the land plot is registered.

The tenant shall apply for renewal of the land lease agreement within one month after he become aware of fact of landlord`s death.

TENANT`S RIGHTS TO HARVEST

The Law establishes the new guarantees for tenants of unclaimed (undistributed) land plots and collectively owned land.

The land lease agreement is terminated automatically from the moment of state registration of title to such land plots, but the tenant has the right to crops, sown on the land. The new owner shall get compensation for using his land plots.

LEGAL EFFECTS OF CANCELLATION OF TITLE

If the court adopts decision on cancellation of state registration of title to a land plot, the court must simultaneously cancel the title to all property rights and encumbrances registered in respect of the land plot.

The court decision on invalidation of the decision of the authorized body to issue a permit for the development of land documentation must also include the information on invalidation of the decision on approval of such documentation and must terminate such rights.

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), Mr. Mykhailo Semka (m.semka@kpdconsulting.com.ua) or Ms. Anastasiia Polishchuk (a.polishchuk @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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