Appraisal (evaluation) of property (including the real estate) in Ukraine


Appraisal of property (including the real estate) in Ukraine is the important issue due to two main reasons:

- sometimes it is required by Ukrainian laws and bylaws;

- it could be rather helpful to realize the actual value of the real estate in the issue (however for this purpose it would be more effective, fast and cheaper to get an opinion from an experienced, independent and credible Ukrainian (and even better the local one, who works on the territory where the real estate is located) realtor).

The main legal regulations covering appraisal of property in Ukraine are the Law of Ukraine "On appraisal of property, property rights and professional appraisal activities in Ukraine" effective as of September 07, 2001 and the Law of Ukraine "On forensic expertise" effective as of April 21, 1994.

Clause 3 of the Law of Ukraine "On appraisal of property, property rights and professional appraisal activities in Ukraine" defines appraisal of property (including the real estate) and property rights as the process of value determination as on date of the expertise using the procedures stipulated by appropriate Ukrainian standards and legislative regulations and is recognized to be the result of practical activity of appropriate subject of the appraisal activity.

Clause 5 of the Law of Ukraine "On appraisal of property, property rights and professional appraisal activities in Ukraine" provides that the appraisal activity in Ukraine can be carried out by:

- private entrepreneurs of Ukraine and Ukrainian corporate entities, who have got appropriate certificate for the right to carry out appraisal activity in Ukraine;

- state and local authorities, who have been granted the right to carry out appraisal activities in the process of fulfilling their functions as concerning management and disposal of the state or municipal property.

In accordance with clause 10 of the Law of Ukraine "On appraisal of property, property rights and professional appraisal activities in Ukraine" appraisal (evaluation) of property in Ukraine (including the real estate) can be carried out on the grounds of:

- an agreement between appraiser and customer;
- a court decree (writ) prescribing carrying out of appropriate property appraisal expertise.

Clause 7 of the Law of Ukraine "On appraisal of property, property rights and professional appraisal activities in Ukraine" provides that appraisal of property is required:

- at establishment of enterprises (business entities) on base of the sate or municipal property;

- at reorganization, bankruptcy, termination of state or municipal enterprise (business entities) and at the same as concerning companies having the state or municipal share in their authorized capital;

- at separation or identification of the part in the jointly owned property if the same has the state or municipal share;

- at evaluation of property, which is contributed into the authorized capital of a corporate entity, if state or municipality participates in such corporate entity;

- at privatization and other alienation of state and/or municipal property;

- at revaluation of property for accounting purpose;

- for taxation of property;

- in order to evaluate losses or amount of compensation if the same is provided by Ukrainian legislation;

- in other events on the grounds of a court writ or if the same required in order to protect interests of the society.

Independent appraisal (evaluation) of property is also required in order to mortgage the state or municipal property and in event of alienation of state and/or municipal property if procedure of such alienation does not provide competition procedures.

Clause 11 of the Law of Ukraine "On appraisal of property, property rights and professional appraisal activities in Ukraine" provides that the appraisal contract is to be made in the written form. The essential terms and conditions of the appraisal contract include:

- designation of property, which is to be appraised (evaluated);

- purpose of appraisal (evaluation);

- type of property value, which is to be evaluated;

- date of appraisal (evaluation);

- duration of appraisal (evaluation) works;

- amount and terms of payment for the appraisal (evaluation) services;

- rights and obligations of parties of the appraisal (evaluation) contract;

- provisions about confidentiality of results of appraisal (evaluation) and information used for such evaluation;

- responsibility of parties for poor fulfillment or non-fulfillment of their contractual obligations;

- procedures to settle the possible contractual disputes.

Clause 30 of the Law of Ukraine "On appraisal of property, property rights and professional appraisal activities in Ukraine" provides the following rights of apprising entities (persons):

- to have access to the property, which is to be apprised as well as to documents and other information required in order to make the appraisal (evaluation);

- to receive explanations and additional data, which are required in order to apprise (evaluate) the property, the property rights and to compose appropriate appraisal (evaluation) report;

- to waive of making the appraisal (evaluation) if there are any type of circumstances baring the appraisal (evaluation) appeared, including any forms of pressure;

- to ensure their responsibility, which is connected with appraisal activity, before the third parties;

- to attract other specialists for appraisal (evaluation) of property if required;

- to appeal decrees of state and/or municipal authorities to the court.

Clause 31 of the Law of Ukraine "On appraisal of property, property rights and professional appraisal activities in Ukraine" provides the following obligations of apprising entities (persons):

- to abide strictly requirements provided by this law and other bylaws while carrying out the appraisal (evaluation) activities;

- to ensure the unprejudiced appraisal (evaluation) of property and if the same is impossible to inform the customer accordingly indicating the circumstances baring to do so;

- to ensure safe custody of documents, which were received in the process of evaluation (appraisal) from the customer or third parties;

- to ensure confidentiality of information, which was received in the process of evaluation (appraisal).

The above information is provided herein in educational and informative purposes only. It is provided that you have to get appropriate legal advice as regarding the legal and other issues of your interest in Ukraine in order to have the exact, extensive and up-to-date legal and other related information.

Do not hesitate to contact us if you have any questions or issues of legal nature, our Law Firm is working for you and our experienced legal specialists are always ready to help providing the client with appropriate legal consultations, legal reports and summaries, reasonable legal advices and all the other required legal support, assistance, coverage and protection.

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