Friday, November 24
Укр Eng
Log In Register
PoliticsNeighboursEconomicsSocietyCultureHistoryOpinionsArchivePhoto Gallery
7 April, 2011  ▪  Volodimir Kuznetskiy

Back to The Land

Neither owners nor tenants can rest assured their land in Ukraine is safe

The protection of property rights is fundamental for any investment decision. In Ukraine, no one’s land is safe from expropriation given the country's vague legislation and the confusing evolvement of its land ownership system. Add useless and corrupt public land record procedures and there is only one piece of advice to give foreign investors not linked to the government: measure your land seven times before buying, or risk losing it even if you are careful and have ownership certificates for a plot of land for construction – the only kind of land that can be sold legitimately in Ukraine.

Risk 1: Purely legal

Measure twice, cut once…

Norms; beliefs

Ukraine's Land Code has two universal foundations for forcing the termination of land ownership or use for any category of land – public need and misuse. A local or central government authority can decide to expropriate land in permanent use based on any of these two reasons (under Articles 144 and 149 of the Land Code). According to Article 143, compulsory termination of ownership or a rental agreement is only possible if there is a relevant court decision. Public authorities rarely expropriate land plots for social needs, such as developing infrastructure; in cases in which they do, the government in some form or another reimburses owners in part or in full for their losses.

In contrast, the norm “misuse of land” is a big luck for any would-be raider. Lawyers claim that officials often become irritated by land owners after some third party - a legal or an individual entity - converses with the authorities. Ukraine’s legislation offers no clear definition of “proper use,” or any criteria to qualify misuse. When deciding what will happen to any plot of land, courts tend to follow their own beliefs, rather than any established norms. Owners who do not work on their land or who use it improperly simply risk losing it.

Risk 2: Profoundly legal

Keep your eye on the money!

Ironically, even using land for the purposes specified in the ownership certificate, such as building a house or infrastructure – a logistics center, for instance – does not guarantee that officials will not prove the opposite – on their own or with a little help from raiders. The purpose of a plot written in the ownership certificate does not necessarily match one in the decision of a local authority, especially if the purpose is changed after it is issued. Before deciding to buy land in Ukraine, the customer should take time to study all seller's documents and be certain a notary checks them, and carefully read the protocol of the local council meeting regarding the acreage, and the results of any land management examination concerning an intended change of utility.

Risk 3: Administratively legal

Many dark stories…

History of Land Privatization in Ukraine

Even studying all the title documents and proper use decisions by local governments for any acreage with the utmost attention does not guarantee a prudent investor will not run into ownership or rent related troubles. In theory, the court can recognize a buy or sell contract or a rental agreement invalid thus qualifying any switch of land ownership, including the results of allocating a plot of land, illegitimate.

This is no exaggeration. After the Presidential Decree aimed at spurring agricultural reform was implemented on December 3, 1999, Ukraine found its collective farm lands distributed and sold with near wild abandon. Furthermore, the April 3 deadline made it nigh impossible to allocate all plots of land in a civilized manner. The heads of technical land departments at local State Administrations worked in haste and under immense pressure. Eye witnesses claim no one really cared about the boundaries of individual plots of land. Legal entities that were the legal successors of collective farms and their land changed almost every day. The market actively traded land plot certificates confirming that the owners were eligible to owning, using and disposing of land. These certificates could be bought for peanuts. Clearly, this background of land privatization ruins its investment attractiveness and boosts risks.

Risk 4: Administratively geographical

One, two, three, four… Land register, here we go!

Evidence of how uncivilized land allocation was can be found in cases in which a plot of land either has several owners – legal entities or individuals – or does not even legally exist at all. This is not the result of forged ownership certificates, but rather the work of careless officials allocating land, unfair territorial conflicts among various local authorities, and – to a greater extent – the lack of a land cadastre matching the register of land owners. So far, legislation has not specified who will supervise land records – the Ministry of Justice or the State Land Committee. By contrast, the available system of ownership record and registration involves numerous organizations and authorities at village, district or municipal levels, endless corruption and vague liability. In 2005, signing a buy or sell contract for a land plot for construction took six months on top of confirmation of ownership by public authorities at all levels. Later, investors' nerves were somewhat soothed when notaries were allowed to change entries about land ownership in public acts when handling deals. Still, a civilized land market is impossible without changing the current registration and record procedures for land ownership.

Related publications:

  • November 21, the 4th anniversary of the Maidan, begins in Kyiv with a prayer for the Heavenly Hundred, the protesters killed at Instytutska Street in February 2014, and the victims of earlier shootings, police violence throughout the revolution
    21 November, Stanislav Kozliuk
  • Ukraine’s Parliament has started to change the electoral system. Will they be able to finish the job and what will change if the reform goes through?
    20 November, Andriy Holub
  • What political ambitions do Yulia Tymoshenko and her party hope to achieve before the 2019 elections?
    20 November, Roman Malko
  • According to recent sociological studies, there have been no significant changes in the mood of Ukrainians over the last three years. The scarcity of demonstrations cannot be attributed to loyalty to the current government, but rather to the fact that the opposition is equally far away from understanding what the citizens need and how these needs can be met
    20 November, Andriy Holub
  • Mostly discussed for its regulation of the language of instruction in schools, the new law offers more overlooked important innovations intended to change the quality and the content of education in Ukraine
    7 November, Hanna Trehub
  • The new law on the reintegration of the occupied parts of the Donbas qualifies them as such and names Russia as the occupier. Yet, it does not launch the process of deoccupation or change the mechanism envisaged in the Minsk Agreement
    20 October, Maksym Vikhrov
Copyright © Ukrainian Week LLC. All rights reserved.
Reprint or other commercial use of the site materials is allowed only with the editorial board permission.
Legal disclaimer Accessibility Privacy policy Terms of use Contact us