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Publication date: 23.05.2024
lawyer, 23 years of experience in enforcement.
The procedure for renewing land lease contracts
The Law of Ukraine "On Amendments to Certain Legislative Acts of Ukraine on Countering Raiding" dated 05.12.2019 No. 340-IX amended the Land Code of Ukraine, the Law of Ukraine "On Land Leasing", the Law of Ukraine "On State Registration of Real Property Rights" and their encumbrances" regarding the procedure for renewing the land lease agreement.
In accordance with Law No. 340-IX, the Land Code of Ukraine was supplemented by Art. 126-1, according to which the condition for renewal of the land lease agreement must be established in the agreement itself.
If there is such a condition in the contract, after its expiration it will be extended for the same period and under the same conditions. The contract is considered renewed without the parties to the contract making a written document about its renewal and in the absence of a statement from one of the parties about the exclusion of information about the renewal of the contract from the State Register of Property Rights to immovable property. The parties are not required to take other actions of the contract for its renewal.
If it is a land plot of communal or state property, then the parties are prohibited from setting a condition for the renewal of the contract, except for the cases where buildings or structures owned by the user or acquirer of the right to use the land plot are located on such land plots.
However, when concluding such a lease agreement, for example, for the purpose of development, as of the moment of concluding the lease agreement, there will be no buildings yet, and therefore there is no reason to conclude a lease agreement with such a condition.
According to Art. 288 of the Tax Code of Ukraine, the contract for the lease of state or communal land is concluded according to the standard form approved by Resolution No. 220 of the Cabinet of Ministers of Ukraine dated March 3, 2004. And in accordance with Art. 179 of the Economic Code of Ukraine, the parties cannot deviate from the content of the standard contract, but have the right to specify its terms.
If there is no provision in the contract for its renewal, then according to the rules of Art. 33 of the Law of Ukraine "On Land Lease" after the expiration of the term for which the land lease agreement was concluded, the lessee, who properly fulfilled the obligations under the terms of the agreement, has a priority right over other persons to conclude a land lease agreement for a new term.
In order to take advantage of the preferential right to conclude a contract for a new term, the lessee is obliged to notify the lessor (or the heir of the land plot) within the period established by the contract, but no later than 1 month before the expiration of the lease contract.
The lessee shall attach a draft of the contract to the notification letter on the conclusion of the land lease agreement for a new term.
Part 3 of Art. 126-1 of the Land Code establishes the possibility of refusal of any of the parties to renew the contract no later than 1 month before the date of expiry of such contract.
The party wishing to use its right to refuse the renewal of the contract may submit to the State Register of Real Property Rights an application to exclude from this register information about the renewal of the contract.
If the lessor did not exercise his right to submit an application for exclusion from the register of such information, the state registration of the property right is automatically extended for the same period.
If none of the parties used the right to submit an application for exclusion from the register of information about the renewal of the lease agreement, and the condition for the renewal of the agreement, in accordance with Art. 126-1 of the Land Code of Ukraine, absent, the lessor receives a message from the lessee with a proposal to extend the term of the contract.
In accordance with the provisions of Art. 33 of the Law of Ukraine "On Land Leasing" within a month, the lessor reviews the notice letter sent by the lessee with the draft lease agreement, checks it for compliance with the requirements of the law, agrees with the lessee (if necessary) on the essential terms of the agreement and, if there are no objections, concludes the lease agreement.
When concluding a land lease agreement for a new term, its conditions may be changed by agreement of the parties. In the event of failure to reach an agreement on the rent and other essential terms of the contract, the tenant's preemptive right to enter into a land lease agreement is terminated.
In the case of lease of state and communal land, the contract is concluded on the basis of a decision of the body authorized to transfer land plots into ownership or use in accordance with Art. 122 of the Land Code of Ukraine.
If the lessor objects to the conclusion of the land lease agreement for a new term, the lessee is sent a letter of notification of the lessor's decision.
It should be noted that the refusal, as well as the existing delay in concluding a new land lease agreement, can be challenged in court.
In accordance with the provisions of Art. 26 of the Law of Ukraine "On State Registration of Property Rights to Immovable Property and Their Encumbrances" a party may apply for refusal at any time before the end of the land lease agreement.
Therefore, there is a risk of a situation where the lessee, exercising the right of pre-emption, turns to the lessor with a letter of notification about the renewal of the land lease agreement, the lessor at this time submits an application to the State Register of Property Rights to immovable property to exclude information about the renewal of the agreement and the pre-emptive right is not will be implemented.
After agreeing on the draft agreement, in the absence of mutual objections, the parties sign the lease agreement.
It should be noted that the rules of Art. 126-1 of the Land Code of Ukraine regarding the renewal of land lease agreements shall apply to land lease agreements entered into or amended after the entry into force of the Law of Ukraine "On Amendments to Certain Legislative Acts of Ukraine on Countering Raiding" No. 340-IX, and the renewal of land lease agreements concluded before the entry into force of the said Law, is carried out under the conditions defined by such contracts, according to the rules in force at the time of their conclusion.
Legal service "Consultant" will select appropriate specialists who will form a legal analysis of the situation and help quickly and efficiently privatize the land plot. A lawyer or an attorney will provide legal services quickly and efficiently, and if it is not possible to meet the relevant specialist in person, Court proceedings, they will provide legal services online.
