Buying land faster

The Law of Ukraine No. 1066-VI of March 5, 2009 On Amendments to Certain Legislative Acts of Ukraine Certifying the Right of Ownership of a Land Plot and the Procedure of Division and Merger of Land Plots took effect in May. Last month, a land buyer had to pay for the state act and the land plot. In practice, one had to go through the bureaucratic red tape that lasted for months and even years to obtain this document. Over this period of time the rights of the new owner were limited. Indeed, they could not sell land plot or build a home. “Swindlers often took advantage of the situation and would sell one and the same land plot while the new owners were involved registering their rights,” says Oleksandr Subbotin, a partner of the law firm Tarasov & Partners. He said the shortage of state act forms created an entire corruption syndicate for their sale. In 2009, the situation got even worse. “Today these forms cannot be found,” said a representative of a land use organization, who requested anonymity. “The issuing of new state acts has basically been suspended.” Today, the rules of purchase/sale of land (exchange, gifting and other) do not require registration of a new state act for each deal, provided that the borders and the intended purpose of the land plot are preserved. The state act becomes an integral part of the agreement and is transferred to every new owner. “Nonetheless, the paperwork related to ownership rights to the land, unlike other real estate, still has to be done in two stages,” says legal consultant of UkrLand Mykhailo Prosekin. Initially, a purchase/sale agreement is concluded and the notary public certifies it. The notary public makes a note about the transfer of ownership right to the existing state act and attaches it to the agreement. This means, according to legislators, that the new forms of state acts are not required in such cases. Then, bypassing the procedure of technical documentation for obtaining a new state act (as it was done previously), the agreement is registered with a special organization. Which organization this will be has yet to be determined, presumably it will be the state cadastre. After two notes are made in the state act (of the notary public and registration organization), the new owner can freely dispose of land, i.e. sell, exchange or convey it as a gift and begin construction on it, provided that the project is ready and approved by an architect authority. The term of registration is limited to 14 calendar days after the documents are submitted. Demanding any “documents that are lacking” is prohibited. Another bonus is that the new rules also apply to the signed deals for which state acts were not issued. “If a state act was not submitted at the moment this law took effect the notary public makes an inquiry with the State Land Cadastre Center (SLC). If the document was not issued, the notary public takes the old state act from the archive and attaches it to the original agreement and makes a corresponding note, while the buyer registers the agreement according to the set procedure,” says Maksym Kopeichikov, a senior partner of the Ilyashev & Partners law firm. The aforementioned rules also apply to foreigners. “As earlier, foreigners can purchase non-agricultural land within city and village limits. They also have the right to purchase land plots within these limits that are under construction (including adjacent territory – KW),” says Mykola Kalyuzhniy, Chairman of the Council of Associations of the Land Union of Ukraine. Other amendments to the legislation apply to cases in which one land plot is divided into parts or several plots are merged. Earlier, this procedure was not documented and lawyers interpreted it differently. “The new law clearly states that the projects of division (merger) are executed on the basis of a clearly defined set of technical documentation. This procedure is shorter and simpler,” says Kalyuzhniy. Kopeichikov says the owners of several land plots that have a state act confirming their right of ownership do not have the right to sell, convey as a gift or exchange a land plot until they are issued such a deed for each plot separately. In short, the lawmakers introduced a simple rule: one land plot – one state act; and for each new land plot, the owners will have to obtain a new act. In order for the new land acquisition rules to start working, the Cabinet of Ministers must approve the procedure for a notary public and a registration body making notes on the state deed. The State Land Committee must develop the procedure of registration of civil-legal agreements. At the moment, the Cabinet has only developed a draft of the resolution, according to which notes about the change of owners of a land plot will be included in the appendix to the state deed (two columns will be added to it: for the notes of the notary public and the registration body). Although the appendix will be attached to the old act, experts recommend not closing any deals until the government approves the explanations to the bill.