On 5 April 2015 Law of Ukraine No. 191-VIII "On Amendments to Certain Legislative Acts of Ukraine on Simplification of the Business Environment (Deregulation)" (the "Law") and Resolution of the Cabinet of Ministers of Ukraine No. 137 "Certain Issues of Simplification of the Procedure for Providing Administrative Services on State Registration of Property Rights to Real Estate and Their Encumbrances" (the "Resolution").
The Law improves land lease regulation and sets new fees for the state registration of property rights to real estate whilst simultaneously the Resolution simplifies the procedure for submitting and obtaining documents on the state registration of property rights to real estate in the State Register of Property Rights to Real Estate (the "Register").
Essential terms of a land lease agreement
The Law significantly reduces the list of essential terms of a land lease agreement. A land lease agreement, to be concluded, should contain only the following mandatory conditions:
- the leased object (its cadastral number, location and size);
- the term of the lease agreement;
- the amount of rent, its indexation, revision, terms, means and procedure for payment, liability for failure to pay the rent.
The Law removes provisions on mandatory annexes to a land lease agreement (plan or scheme of a land plot, cadastral plan of a land plot etc.).
At the same time, the current version of the Model Land Lease Agreement approved by Resolution of the Cabinet of Ministers of Ukraine No. 220 dated 3 March 2004 (the "Model Agreement") contains an extended list of the terms of a land lease agreement. To minimize the risk of challenging of a land lease agreement until the introduction of all the relevant amendments to the legislation of Ukraine, it is recommended that a land lease agreement should also comply with the Model Agreement.
Lease of agricultural land
The Law clarifies the uncertainties relating to the lease by legal entities of agricultural land designated for an individual agricultural household. The Law specifically gives Ukrainian legal entities the possibility to lease the agricultural land of an individual agricultural household for the purposes of agricultural commodity and farming household. In this case the designated use of the land plot is not changed.
Moreover, the Law establishes a minimum seven-year term for the lease of agricultural land designated for an individual agricultural household, agricultural commodity and farming household.
Procedure for submitting and obtaining documents on state registration of property rights to real estate
The officials of municipal authorities and administrative service centers (the "Authorized Persons"), and not only state registrars and notaries, are now authorized to accept and issue documents concerning the state registration of property rights to real estate.
The Authorized Persons are not entitled to create state registration documents, because this authority is held only by state registrars and notaries in the cases established by law.
Moreover, the Resolution provides that an ownership certificate, an extract from the Register on registration of rights and a decision of the state registrar can be issued in electronic form. At the applicant's request the state registrar sends such documents to the e-mail address indicated by the applicant. The electronic document has the same legal force as a paper document. If the applicant prefers an electronic registration document, such document is not issued in paper form.
Fees for the state registration of property rights to real estate
The Law establishes new fees for the state registration of property rights to real estate. The administrative fee depends on (i) the type of property right, (ii) the holder of the right (legal entities and individuals, state and local authorities), (iii) the type of real estate and (iv) the object's area.
For example, the administrative fee for the state registration of ownership rights to real estate of legal entities is from 0.3 to 1.4 times the minimum salary (from UAH 366 to UAH 1706), and for individuals – from 0.07 to 0.2 times the minimum salary (from UAH 86 to UAH 244). Earlier the fee for the registration of ownership rights to the real estate of legal entities and individuals was UAH 119 and the fee for the registration of other property rights was UAH 51.