Ukraine Makes Headway with Land Reform

Ukraine Makes Headway with Land Reform

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The long-awaited Law of Ukraine “On amendments to the Land Code of Ukraine and other legislative acts to improve the governance of land relations and their deregulation” No. 1423-IX (“Law”) entered into force (save for certain provisions).

The Law aims to boost the capabilities of local authorities (“Municipalities”) by granting them ownership rights to state-owned lands located outside villages and towns (“Rural Areas”). As a result, the Municipalities will manage the Outside Lands instead of the State Service of Ukraine for Geodesy, Cartography and Cadastre and other state authorities.

According to the Law, the Municipalities will become owners of the Rural Areas either: 

  1. by registering their ownership rights with the State Register of Proprietary Rights to Immovable Property (“Real Estate Register”) if it already contains information on the Rural Areas; or
  2. automatically if the Real Estate Register does not contain information on the Rural Areas.

There will be no need for the Rural Areas’ users to amend their agreements due to the change of the landlord.

Additionally, the Law:

  • allows emphyteuta (a user under emphyteusis agreement) to lease out the land plot without the landlord’s permission;
  • allows tenants of privately owned agricultural land plots to sell their lease rights without the landlord’s permission;
  • allows users of privately owned agricultural lands plots to pledge their land use rights to any third parties;
  • sets the detailed foreclosure procedure on the pledged land use rights;
  • allows owners of the buildings located within the coastal protection zones to reconstruct them; and
  • introduces the rankings of pre-emptive right to purchase agricultural land plots.

We believe that the Law will boost the Municipalities and enable agricultural land users to raise additional funding for their business.

By Maksym Maksymenko, Partner, and Dmytro Radzivon, Associate, Avellum