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Land acquisition in Ukraine - legal regulation (2013)

Article for UBR.UA about provision of land into ownership or for use in 2013.

Andriy Buzynnyi, lawyer of law firm “Pravova Dopomoga”, wrote an article about ways of allotment of land in Ukraine in 2013 for UBR.UA.

The article was published under the name “Allotment of land in 2013: when the legislation can’t find its way out of the dead end”.

Unabridged text of the article is available below:

Many individuals and legal entities wonder why local authorities don’t make decisions about provision of land plots into their ownership or for use even despite the fact that they have developed projects of land use planning and obtained all the required permissions.

On the 1st of January 2013 a Law of Ukraine “On amendments to some regulatory acts of Ukraine related to separation of state owned lands and municipally owned ones” entered into force. Subsection 9 of the Transitional and Final provisions of the law provides that ownership rights to state owned lands and municipally owned lands can be fulfilled only upon completion of state registration of ownership rights to a specific land plot.

Such registration of absolute majority of unoccupied state and municipally owned land plots has not been performed. And therefore local authorities are not entitled to manage land plots (the prohibition includes allotment). Moreover neither the state budged nor local ones have money for completion of this kind of state registration. This serves as a legal ground for government bodies and local authorities refusing to conduct privatization or sell land as well as to provide it for use. Of course such refusals can be appealed against but the chance of this lawsuits satisfaction is quite small. And the possibility of enforcement of such decisions seems even smaller.

Besides, on the 1st of January 2013 Section 3 of Article 24 of the Law of Ukraine “On urban planning” entered into force. This regulation forbids provision of state owned and municipally owned lands into ownership or for use of individuals and legal entities for the urban planning on condition that approved zoning plan or detailed plan of the territory is absent. Majority of localities have neither zoning plans nor detailed territory plans. Resources for their development seem unavailable too.

It is possible to omit these prohibitions legally only by means of conduction of land plot registration and registration of state’s or local community’s rights at expense of a person that is interested in its obtainment. Also such person would have to pay for development of zoning plan or detailed territory plan. Moreover, Section 4 of Article 10 of the Law of Ukraine “On urban planning” directly provides the possibility of development of zoning plan and detailed territory plan not only at expense of state or local budgets but also by means of money obtained from other sources that are not prohibited by law. But such mechanism has a number of drawbacks.

First of all it is quite an expensive procedure which takes a long time and is unacceptable for many of those who seek to obtain land. Thus, in order to register state’s or community’s rights to land it is required to complete inventory of land plots in compliance with the procedure that is set by the resolution of the Cabinet of Ministers of Ukraine number 513 dated 23.05.2012. To do so a customer that is represented by governmental body, owner or land user must order development of technical documentation by means of entering into contract with persons who have a license for conduction of land use planning works with further payment for these services. After this the documents must be approved in accordance with the procedure that is set for approval of land use planning projects related to provision of land plots. Development of zoning plan or detailed territory plan is also quite costly.

Secondly, the procedure of inventory conduction completely depends on the will and wish of local authorities (local authority within limits of a locality or state administration outside the territory of it). It is the body that makes the decision about conduction of inventory and approves the results of such inventory conduction upon which transfers inventory data into the State land cadaster and registers state’s or local community’s rights to these land plots. Similarly the outcome of zoning plan or detailed territory plan obtainment completely depends on the will and wish of local authorities which act not only as customers that order such plans but also approve them during their plenary sessions.

Thirdly, it does not guaranty obtainment of rights to a land plot by a person. Upon registration of state’s or local community’s rights to land which belongs to it and development of zoning plan and/or detailed territory plan an interested person still has to undergo the complete procedure of provision of land into ownership or for use which starts with obtainment of permit for land use planning project development and ends with obtainment of consent of local authorities for transfer of land into ownership or for use. One cannot guaranty that “mood” of authorities or the authorities themselves will not change and therefore this plan seems to be very risky.

These risks can be reduced by means of entry into agreement with local authorities or a state administration which would include their obligation to provide a particular land plot into ownership of an interested party in exchange for development of zoning plan or detailed territory plan and/or for the registration of land and state’s or local community’s rights to it. But in order to enter into such agreement a local body must agree on it and an interested party has to have sufficient funds for development of these documents and undergoing of related procedures.

Also it is possible to pull a few strings in order for a local council or state administration to make decisions you need. But such steps may result in lawsuits from public prosecutor’s office. Thus, the Administrative court of the Autonomous republic of Crimea in its resolution number 801/2765/13-а dated 19.04.2013 and based on the provisions of the abovementioned law ruled to cancel the decision of local council dated 31.01.2013 about provision of a land plot into ownership. Similar decision was made by the Commercial Court of Lugansk region on the 3rd of April 2013 in case number 913/394/13-g.

The most optimal way out of the current situation is to wait for regulatory amendments which will be aimed at cancellation of the mentioned prohibitions. Such bills have already been registered. Moreover they have been registered by a couple of MPs so there are grounds to suppose that at least one of them will become a law shortly. And if one has to obtain the land as soon as possible without the need to wait for regulatory amendments he can use one of the abovementioned risky means.

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