Land lease and Land Lease Contract in Ukraine


Rental of land in Ukraine it's rather complicated from the legal point of view relations, which are governed by various laws and bylaws of Ukraine. Thus such relations are regulated by provisions of the Civil Code of Ukraine, the Commercial Code of Ukraine and in much more degree by appropriate provisions of the Land Code of Ukraine, the Law of Ukraine "On Land Lease" and numerous specialized Ukrainian bylaws, regulations and numerous judicial precedents of course.

Clause 792 of the Civil Code of Ukraine provides that on the ground of the land rental contract the renter undertakes to transfer the land lot for tenement and enjoyment of the tenant for the specified period of time against payment. The land lot can be rented together with plants, constructions, buildings, water reservoirs, which are located on the land lot or without it. However this clause provides only common regulations for the land rental for private purposes.

Clause 290 of the Commercial Code of Ukraine contains mostly the reference rules to the Land Code of Ukraine, the Civil Code of Ukraine, but mainly to the Land Code of Ukraine and to the Law of Ukraine "On Land Lease". Therewith it also provides that the land rental contract is to be made in written form with required notarization and state registration.

And finally the main provisions of the Land Code of Ukraine, which describe in general what is the land rental, from one hand, and from the other hand divides all Ukrainian lands onto lands with various designation. Each Ukrainian plot of land has its own designation, which stipulates the allowed methods of use of the same or, in other worlds, the legal regime of the land plot of each separate designation and, accordingly, scope of rights and obligations of the land user. However, more detailed information on the land legal issues is provided in special section of our internet-site devoted to the land affairs in Ukraine.

Clause 93 of the Land Code of Ukraine provides that the rental right for a plot of land recognized as the based on the contract term and paid holding and enjoyment of the land plot, which is required for the tenant in order to conduct business and other activity.

The land plots can be given into rental to citizens of Ukraine and corporate entities of Ukraine, to foreign citizens and persons destitute of nationality, to foreign corporate entities, international associations and unions and to the foreign states as well.

A land plot can be rented for the short term – up to five years – and for the long term – up to 50 years.

The rented land plot can be sub-rented if there is appropriate consent of the initial renter of the same to do so (i.e. a land plot can be rented by the initial tenant to the other tenant).

The renters are the landlords of the land plots or other entities, which are duly powered for this by the landlords.

And obviously the main regulations for the land legal relations in Ukraine are provided by the Law of Ukraine "On Land Lease" effective as of October 22, 1998 with numerous amendments.

Clause 1 of the Law of Ukraine "On Land Lease" provides definition of the land rental and stipulates that the land rental is the based on the contract term and paid holding and enjoyment of the land plot, which is required for the tenant in order to conduct business and other activity. In fact, the same definition is provided in clause 93 of the Land Code of Ukraine.

In understanding of clause 3 of the Law of Ukraine "On Land Lease" the rented property is considered to be the land plots, which are legally owned by citizens, corporate entities, owned by municipality or the state.

The land plot can be rented together with plants, constructions, buildings, water reservoirs, which are located on the land plot or without it (the same rule is given in clause 792 of the Civil Code of Ukraine as well).

Possible land renters are listed in clause 4 of the Law of Ukraine "On Land Lease" repeating some provisions of clause 93 of the Land Code of Ukraine. Thus, the land renters are citizens and corporate entities, owning the land plots or other entities, which are duly powered for this by the landlords.

The land renters of the land plots, which are owned by municipality, are the village, the township and the city councils within the frameworks of powers granted to them by the law.

The land renters of the land plots, which are jointly owned by the territorial communities, are the district, the regional councils and the Supreme Council of the Autonomous Republic of Crimea (the Verkhovna Rada of the Autonomous Republic of Crimea) within the frameworks of powers granted to them by the law.

The land renters of the land plots, which are owned by the State, are the district, the regional, Kiev and Sevastopol state city administrations, the Council of Ministers of the Autonomous Republic of Crimea and the Cabinet of Ministers of Ukraine within the frameworks of powers granted to them by the law.

In accordance with clause 5 of the Law of Ukraine "On Land Lease", the land tenants can be corporate or natural (private) persons, who hold and enjoy the land on the grounds of a rental contract.

This clause also provides the following list of the land tenants:

a) the district, the regional, Kiev and Sevastopol state city administrations, the Council of Ministers of the Autonomous Republic of Crimea and the Cabinet of Ministers of Ukraine within the frameworks of powers granted to them by the law;

b) the district, the regional councils and the Supreme Council of the Autonomous Republic of Crimea (the Verkhovna Rada of the Autonomous Republic of Crimea) within the frameworks of powers granted to them by the law;

c) citizens and corporate entities of Ukraine, foreigners and persons destitute of nationality, foreign corporate entities, international associations and unions and the foreign states as well.

Clause 8 of the Law of Ukraine "On Land Lease" regulates issues of the land sub-rental and provides, that the rented plot of land or a part of the same can be sub-rented without changing the designation of such land plot, if this right is directly stipulated in the land rental contract or if there is the written consent of the renter available. However if the renter will not submit his written consent or objection, the rented land plot or a part of the same can be sub-rented by the initial tenant.

Terms and conditions of sub-rental contract should be in accordance and not contradicting with terms and conditions of the principal land rental contract.

Duration of sub-rental cannot exceed duration of the principal land rental. If the principal land rental contract is terminated, then the sub-rental contract considered to be terminated too. The sub-rental contract for a land plot also requires the state registration and can be notarized if parties of the same are desirous to do so.

Clause 9 of the Law of Ukraine "On Land Lease" stipulates the preferential right of the tenant to acquire the land plot.

Clause 24 of the Law of Ukraine "On Land Lease" provides the list of rights and duties of the renter as follows:

a) the renter has the right to require from the tenant:
- to use the land plot in accordance with its designation and the land rental contract;
- to observe requirements as concerning the ecological safety of the land and retaining fecundity of the land, to follow the state standards, norms and rules;
- to pay the rental payments timely;

b) the renter is obligated:
- to transfer the land plot for enjoyment of the tenant in condition, which meets terms and conditions of the land rental contract;
- to ensure and protect the third-parties rights as concerning the land plot;
- to make no obstacles for the tenant to use the land plot;
- to warn the tenant about the special characteristics and defects of the land plot, etc.

Clause 25 of the Law of Ukraine "On Land Lease" provides the list of rights and duties of the tenant as follows:

a) the tenant of the land plot has the right:
- to use the land plot on its own discretion however in accordance with terms and conditions of the land rental contract;
- to construct residential, production, household, leisure and other buildings and constructions and to grow perennial plant on the land if appropriate written consent of the renter is available.
- to get fruits and income;
- to construct water and reclamation constructions on condition that appropriate written consent of the renter is available.

b) the tenant is obligated:
- to start using the land plot within terms provided by the land rental contract, which is duly registered;
- to honor the existing restrictions as concerning the land plot;
- to honor designation of the land lot;
- to submit a copy of the land rental contract to appropriate state tax body within five calendar days starting from the moment of state registration of the same, when such submission is required.

Requirements as concerning the required form of the land rental contract are provided by clause 14, 18 and 20 of the Law of Ukraine "On Land Lease". The land rental contract is to be made in the written form with subsequent state registration and notarization (the last one is to the discretion of the parties). The land rental contract becomes valid at the moment of state registration of the same.

There is the standard form of land rental contract adopted by the Cabinet of Ministers of Ukraine as well, however clause 15 of the Law of Ukraine "On Land Lease" also provides the essential terms and conditions of the land rental contract as follows:

- the rented property (dislocation and area of the land plot);
- duration of the land rental contract;
- the rental payments (also honoring appropriate provisions of the Law of Ukraine "About the land fee"): amount, indexation, methods of payment, terms of payments, etc.
- designation of the land plot and terms of use of the same;
- terms of the state continuance of the rented property;
- terms and conditions of transferring the land plot to the tenant;
- terms of returning the land plot to the renter;
- the existing restrictions (encumbrances) as concerning use of the land plot;
- liability of the parties.

The following documents are considered to be a part of the land rental contract and to be attached to the same:

- a plan or a layout of the land plot, which is rented;
- a cadastral plan of the land lot with indication of restrictions (encumbrances);
- an act of identification of boundaries of the land plot;
- a statement of transfer and acceptance of the land plot;
- a project of land allocation, when it is required by the law.

The land plots, which are owned by the State or municipality are to be rented using the public action procedures. This rule is provided by clause 16 of the Law of Ukraine "On Land Lease". However this rule is not applied to the land plots, whereon located the real estate objects belonging to citizens or corporate entities.

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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