Real estate sale and purchase contract in Ukraine

The Civil Code of Ukraine, namely clauses 2 and 318 of the same, provide that the foreign corporate entities and foreign individuals have the same rights as Ukrainian citizens to purchase, own and dispose of real estate and other property in Ukraine. Earlier the same regulations were provided by the Law of Ukraine "On property", but later on with adoption of the new Civil Code of Ukraine, this law was canceled and instead the same regulations were included into the Civil Code of Ukraine as stated above.

Another very important aspect is the form required for the sale and purchase contract. Clause 657 of the Civil Code of Ukraine provides that sale and purchase contract for land plots, integral property complexes, residential house (flat) and other real estate is to be made in the written form with required notarization and state registration.

Therefore in order to make a real estate sale and purchase contract in Ukraine a foreign natural person is to have the following documents:

- passport (or other passport document) with a valid visa;

- tax payer number on the territory of Ukraine (natural (private) person is to have the personal Ukrainian tax number. This tax number has every Ukrainian citizen of the full age and the number is used to tax income, which is collected in Ukraine. Therefore if it is planed to make in Ukraine a contract or agreement, which requires notarization and state registration in Ukraine, a person (mostly non-residents of Ukraine) have to take care in advance of getting such tax number in Ukraine. Our Law Firm can get this tax number for you in advance.).

And accordingly in order to make a real estate sale and purchase contract a foreign corporate entity has to present the following documents (together with certified translation of the same into Ukrainian language):

- bylaw documents and appropriate references (i.e. charter, memorandum, articles of association, articles of incorporation, etc.) duly legalized for use in Ukraine (apostille or consular legalization is required and translation into Ukrainian language as well);

- a resolution on the appointment of appropriate official, who has the right to sign documents for and on behalf of the foreign corporate entity or appropriate valid power of attorney with the same powers. If the representative acts on the grounds of appropriate resolution his signature on the contract is to be certified with appropriate corporate seal of such foreign corporate entity.

Another one very very important moment is the required state registration of a real estate sale and purchase contract as far as the Civil Code of Ukraine provides, that the title of ownership for the property (including real estate) appears at the moment of state registration of such contract, but not at the moment signing and notarizing the same. Should be mentioned that the state registration of sale and purchase contract is made not at the notary's office, but at the special state bodies (if talking about registration of the real estate sale and purchase contracts in Ukraine, such state body is the Bureau of Technical Inventory (brief name of this body is accordingly BTI, abbreviation is the same even for Ukrainian spelling of its name – "Byuro Tehnichnoyi Inventaryzatsiyi") and accordingly this procedure requires some time to be performed.

And namely the problem in this regard is that an unconscientious seller may still, using duplicate title documents, sell the same real estate to another buyer(s) over a period of several days and arrange it before the first sale appears publicly in the state registry, which is kept by the Bureau of Technical Inventory. Therefore, in order to minimize this risk, a buyer needs to apply for the state registration of his real estate sale and purchase contract immediately after notarization of the same. Of course it’s better to stipulate that full payment is made only after the registration. In this regard rather helpful can be background check-up of the seller and the real estate in the issue as far as this allows refusing many un-honest intentions of the seller at very early stage and therefore escape of most risks related with such transaction for rather small amount of time and money.

One should also pay attention to the state duties stipulated by Ukrainian laws, which are required to be paid at the moment or before notarization of the real estate sale and purchase contract in Ukraine. Such expenses are usually shared equally between the parties of the real estate sale and purchase contract; however, the parties can agree the other principles of slitting such expenses (including appropriate condition into the real estate sale and purchase contract).

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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