On 16 April 2014, the Parliament adopted a law, which extended notaries’ powers to issue extracts from the State Registry of Proprietary Rights to Immovable Property (the “Law”). The Law was recently signed by the President of Ukraine and became effective on 08 May 2014.
The Law aims to: (i) simplify access to the State Registry of Proprietary Rights to Immovable Property (the “Registry”); and (ii) reduce the burden on state registrars, who are constantly overloaded with a large number of requests on registration of rights to immovable property and provision of information from the Registry. During 2013, state registering authorities received more than 1 million requests from state officials to access information from the Registry, constituting 1/3 of the scope of their work.
Under the Law, notaries, alongside state registrars, are entitled to issue extracts (in Ukrainian “vytiag”) from the Registry. Previously, notaries could only perform a search of the Registry and issue extracts from the Registry if he/she carried out notarial actions with respect to property (such as, certifying a property sale and purchase agreement), whereas they are now able to do so even if notarial certifications are not involved. We constantly face difficulties in the course of legal due diligence when attempting to obtain extracts from our clients and their counterparts in order to verify title to property. Our clients and their counterparts always complained that obtaining extracts from the state registrars is a time-consuming process. Hopefully, the Law will resolve this issue and immovable property owners/users will be able to receive extracts evidencing their ownership, lease and other rights to the property.
The Registry includes information regarding: (i) immovable property (buildings, structures, premises, land plots, etc.); (ii) their owners and users (lessees, servitude holders, etc.); and (iii) encumbrances over immovable property (mortgages, bans on disposal, etc.). The Registry became effective on 1 January 2013, and was empty prior to this date (which means that it did not include any information regarding any immovable property in Ukraine). Therefore, the Registry includes the information listed above in case either owners or users voluntarily applied to register their rights to property or there were any transactions with respect to the property since January 2013, e.g. sale, mortgaging, etc.
Notwithstanding these positive changes, the Law does contain some contradicting provisions. Namely, the Law of Ukraine “On Notaries” (certain provisions of which were changed by the Law) was not amended to empower the notaries to access the Registry and issue the extracts without being required to carry out notarial actions with the property. We hope that this will not represent an obstacle to the implementation of the Law. According to information provided by the notaries, they have not yet issued the extracts according to the Law as they are waiting for further clarifications from the Ministry of Justice regarding practical and technical issues of implementation of the provisions of the Law.
Despite some progress towards the simplification of access to the Registry, the Law does not resolve a longstanding issue regarding free public access to the Registry. According to current legislation, information contained in the Registry (except information on registration of encumbrances provided to any individuals and entities) may only be provided to:
- owners or users of immovable property (as well as their successors and authorised representatives); and
- state and municipal authorities (such as court, prosecutor officers, enforcement agencies etc.).
The draft law No. 4728, dated 16 April 2014, addressing the above issue is currently being processed in the Verkhovna Rada of Ukraine. If adopted, information from the State Registry would become publicly accessible, which would represent a further milestone in improving transparency and certainty in property relationships.
Legislation: the Law of Ukraine “On Amendments to certain Legislative Acts Regarding Provision of Information on State Registration of Rights and their Encumbrances from the State Registry of Proprietary Rights to Immovable Property” No. 1219-VI, dated 16 April 2014.