Perspectives of Ukrainian Real Estate Laws for 2013

→ Dmytro Biryuk

Ukraine is constantly improving its legal basis for real estate transactions. A new system of state registration of real estate rights will make the Ukrainian real estate framework more integrated, coherent and efficient.

New registration system

One of the main advance­ments for 2013 is a new sys­tem of state reg­is­tra­tion of real estate rights, based on the Law of Ukraine on State Reg­is­tra­tion of Prop­er­ty Rights to Real Estate and their Encum­brances, dat­ed 1 July 2004 (Reg­is­tra­tion Law). While the Reg­is­tra­tion Law was adopt­ed over eight years ago and then under­went numer­ous amend­ments, it is only now actu­al­ly going to find its imple­men­ta­tion.

The Reg­is­tra­tion Law brings a new approach to state reg­is­tra­tion of real estate rights. To date, real estate rights are sub­ject to two dif­fer­ent reg­is­ters: (i) the State Reg­is­ter of Lands regard­ing rights to land and (ii) the Reg­is­ter of Titles to Real Estate regard­ing rights to build­ings and oth­er struc­tures. These reg­is­ters are run by two dif­fer­ent author­i­ties: the local depart­ments of land resources and the bureaus of tech­ni­cal inven­to­ry, respec­tive­ly.

Single register of real estate rights

Start­ing from 2013, one reg­is­ter cov­ers both land and build­ings: the State Reg­is­ter of Prop­er­ty Rights to Real Estate. There is also just one author­i­ty to run the state reg­is­tra­tion of real estate rights: the State Reg­is­tra­tion Ser­vice of Ukraine, along with local depart­ments of the Min­istry of Jus­tice of Ukraine.

The Reg­is­tra­tion Law autho­ris­es notaries to act as spe­cial state reg­is­trars. When notaries cer­ti­fy agree­ments, they will also reg­is­ter cor­re­spond­ing real estate rights. It will no longer be nec­es­sary to reg­is­ter a real estate trans­fer agree­ment in the State Reg­is­ter of Trans­ac­tions and then to reg­is­ter the rel­e­vant real estate right in either of the two old reg­is­ters. Rather, it will only be nec­es­sary to reg­is­ter the real estate right in the new reg­is­ter.

The new reg­is­tra­tion sys­tem goes a long way to bind­ing land and its build­ings. For exam­ple, if a right to build­ing aris­es or trans­fers along with the cor­re­spond­ing right to under­ly­ing land, then, for an enti­ty to reg­is­ter such rights, it need file only one appli­ca­tion.

In view of these and oth­er devel­op­ments, the new sys­tem should con­sid­er­ably sim­pli­fy the reg­is­tra­tion of real estate rights in Ukraine. This should, in turn, boost real estate trans­ac­tions.

Transparency of land data

One more impor­tant act to become effec­tive from 1 Jan­u­ary 2013 is the Law of Ukraine on State Land Cadas­tre, dat­ed 7 July 2011 (Land Cadas­tre Law). Post­poned from 2012 to 2013, the Land Cadas­tre Law is about to bring a num­ber of changes. One is a prin­ci­ple of trans­paren­cy of land cadas­tre data.

The Land Cadas­tre Law envis­ages pub­li­ca­tion of cer­tain cadas­tre data on the offi­cial web­site of the State Agency of Land Resources of Ukraine. The data includes bound­aries of admin­is­tra­tive ter­ri­to­r­i­al units and land plots, cadas­tre num­bers and pur­pose des­ig­na­tion of land plots, lim­i­ta­tions in use of lands, nor­ma­tive mon­e­tary val­ue of lands, parts of land plots sub­ject to servi­tude or sub­lease, etc.

The trans­paren­cy prin­ci­ple should facil­i­tate access of indi­vid­u­als and com­pa­nies to avail­able land plots. It should thus cre­ate the con­di­tions for the devel­op­ment of a trans­par­ent land mar­ket in Ukraine. Open­ness of land data will make it more attrac­tive to invest in Ukrain­ian lands.

Fate of moratorium on transfer of agro-land

A vital law Ukraine has yet to adopt is one on the agri­cul­tur­al land turnover. Such a law is pri­mar­i­ly nec­es­sary to abol­ish the mora­to­ri­um on alien­ation of agri­cul­tur­al land. In any case, though, the mora­to­ri­um will like­ly last until 1 Jan­u­ary 2016. It large­ly depends on polit­i­cal will of Ukrain­ian par­lia­men­tar­i­ans.

On a final note, the Ukrain­ian Par­lia­ment occa­sion­al­ly defers impor­tant laws very late. So it is always pos­si­ble that the Par­lia­ment will sud­den­ly post­pone the expect­ed changes.

The land transparency principle should create the conditions for the development of a transparent land market in Ukraine.