Real Estate

Perspectives of Ukrainian Real Estate Laws for 2013

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.