Since the enactment of martial law, Ukraine has introduced several changes to its legislation regulating construction issues. At the same time, the ongoing process of digitalization of the construction permit system continues. Below is a brief description of changes that are most important for business.
April 4, 2024
Since the enactment of martial law, Ukraine has introduced several changes to its legislation regulating construction issues. At the same time, the ongoing process of digitalization of the construction permit system continues. Below is a brief description of changes that are most important for business.
Law of Ukraine “On Guaranteeing Proprietary Rights to Real Estate Objects to be Constructed in the Future” dated 15 August 2022, No. 2518-IX (the “Real Estate Objects Law”)
The Real Estate Objects Law seeks to protect ownership rights to real estate objects under construction. It introduces a new special property right to a future real estate object, subject to state registration.
A future real estate object is defined as a part of a divisible object under construction, as provided for by the construction and design documents, which after construction and commissioning, will become a separate real estate object (e.g. apartment, garage, other residential or non-residential premises, parking lot, etc.).
The Real Estate Objects Law divides objects under construction into:
- Divisible - those containing two or more future real estate objects, and
- Indivisible - those which do not contain any future real estate objects.
The list of the main technical characteristics of a divisible object under construction and information about future real estate objects that have been or are being sold were approved by Resolution of the Cabinet of Ministers of Ukraine dated 21 April 2023 No. 378 "Some Issues of Implementation of the Law of Ukraine "On Guaranteeing Proprietary Rights to Real Estate Objects to be Constructed in the Future". According to the above Resolution, the construction customer (developer) must publish information on the technical characteristics and future real estate objects that have been or and are being sold on its website.
In order to guarantee the rights of buyers of future real estate objects, the Real Estate Objects Law stipulates that divisible objects under construction cannot be put into the stream of commerce, except in cases where they are mortgaged and the developer is replaced. Furthermore, the construction customer is obliged to determine a list of future real estate objects that will constitute a guarantee share, i.e. a set of future real estate objects, which is determined for each divisible object under construction (each stage of construction/each commissioning portion), proprietary rights to which should be encumbered before the commissioning of the finished object of construction (stage of construction / commissioning portion) in order to guarantee the completion of the relevant object by other persons (including due to bankruptcy, financial insolvency of the construction customer/construction developer).
The minimum guarantee share is determined by Resolution no. 8 of the Cabinet of Ministers of Ukraine dated 3 January 2023 "On Determining the Minimum Guarantee Share for the Construction of Real Estate Objects". It is defined as a percentage of the total area of future real estate objects in a divisible object under construction (stage of construction/commissioning portion) in accordance with the design documents for construction when such area should make:
- 10 percent of the area of future real estate object(s)– for the cities of Kyiv, Dnipro, Lviv, Odesa, Kharkiv;
- 5 percent of the area of future real estate objects(s) – for other localities.
Law of Ukraine "On Amendments to Certain Laws of Ukraine on Priority Measures for Reforming the Urban Planning Sphere" dated 12 May 2022 No. 2254-IX (the "Reform Law")
The Reform Law sets out a new special type of urban planning program to ensure the restoration of communities, which have suffered as a result of the armed aggression against Ukraine or of other socioeconomic, infrastructural, or ecological crises. These regional or local restoration programs will determine the key spatial, urban planning and socioeconomic priorities of the restoration policy and will include measures to ensure the restoration of the relevant region. The comprehensive restoration program is not part of urban planning documentation.
The provisions of the approved restoration program are components of the initial data for the development and introduction of changes to the urban planning documentation at the local level.
The Law of Ukraine "On Amendments to Certain Legislative Acts of Ukraine Regarding Land Use Planning" dated 17 June 2020 No. 711-IX (as amended) introduced a new type of urban planning documentation at the local level - a comprehensive plan for spatial development of the territory of a territorial community. It also introduced other changes to the law in terms of regulating the development of urban planning documentation at the local level. Thus, the development plans under this law will have to take into account the relevant comprehensive restoration program.
The Reform Law regulates urban planning issues that are necessary to solve urgent problems caused by the war, in particular:
- Location, including construction, of buildings and structures intended for temporary residence of internally displaced persons who lost their homes as a result of armed hostilities;
- Relocation (evacuation) of production facilities of enterprises from the war zone;
- Simplification of construction of certain objects of engineering and transport infrastructure under the conditions of martial law;
- Creation of prerequisites for comprehensive restoration of settlements (territories) that suffered as a result of the war.
The Law of Ukraine "On Amendments to Certain Legislative Acts of Ukraine Regarding the Simplification of the Procedure for Changing the Designated Purpose of Land to Attract Investments for Rapid Reconstruction of Ukraine" dated 6 February 2024 No. 3563-IX (the "Simplification Law")
On 28 February 2024, the Simplification Law was officially published. The law:
- Allows changes to the designated purpose of land plots without developing urban planning and land management documentation in the absence of the developed urban planning documentation at the local level. This simplified approach will apply to land plots outside of the settlements for locating the following class of buildings and structures:
- Industrial and warehouse buildings;
- Non-residential agricultural buildings;
- Pipelines, lines of electronic communication networks, and power transmission (except for main oil and gas pipelines);
- Complex industrial facilities (except for buildings of enterprises engaged in the extraction, production and processing of nuclear materials, the enrichment and processing of nuclear fuel; the thermal treatment (incineration) of household waste; and nuclear power plants).
The simplified procedure will be in effect for five years from the date of termination of martial law in Ukraine or in the given locality.
- Allows changing the designated purpose of particularly valuable land and forest land plots in order to use them for purposes not related to forestry management, in case of location of power facilities (including technological infrastructure of power facilities).
- Provides for the development of a register of territories contaminated / likely contaminated by explosive objects.
The Simplification Law will enter into force three months after its publication, i.e. from 28 May 2024.
If you have questions about your construction project, please feel free to reach out to our team.
- Volodymyr Monastyrskyy, Partner, Kyiv, D. +380 44 494 47 74, Volodymyr.Monastyrskyy@dentons.com
- Oleg Kuchanskyy, Of Counsel, Kyiv, D. +380 44 494 47 74, Oleg.Kuchanskyy@dentons.com
- Natalia Levchuk, Senior Associate, Kyiv, D. +380 44 494 47 74, Natalia.Levchuk@dentons.com
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