Publication date: 09.06.2024
Legal aspects of leasing land plots: legislative novelties and court practice
Introduction
Leasing of land plots is one of the most common forms of land use in Ukraine. After the opening of the agricultural land market in 2021, the legislation regulating land lease has undergone significant changes. In this article we will consider the main novelties of the legislation in the sphere of land lease and analyze the current court practice.
Main legislative novelties
Land Lease Agreement:
- Form and content: From now on, a lease agreement for a land plot must be concluded in writing and is subject to notarization. It is important that the agreement includes all material terms and conditions, such as the object of the lease, the lease term, the rent and the terms of its payment.
- Lease terms: The maximum lease term for agricultural lands may not exceed 50 years. The minimum lease term for such lands is 7 years.
Rent:
- Determination of the amount: The amount of rent shall be determined by agreement of the parties, but may not be less than the statutory minimum.
- Indexation: The legislation provides for mandatory indexation of rent in accordance with the inflation rate.
Rights and obligations of the parties:
- Landlord: Has the right to demand timely payment of rent, as well as the tenant's compliance with the terms and conditions of the agreement.
- Lessee: Has the right to use the land plot in accordance with its intended purpose, as well as to demand compensation for losses in case of improper fulfillment of obligations by the lessor.
Transfer of Lease Right:
- Sublease: The lessee has the right to sublease the land plot with the consent of the lessor, if it is stipulated by the lease agreement.
- Preemptive right: The lessee has a preferential right to conclude a lease agreement for a new term after the expiration of the previous agreement.
Case law
Analysis of judicial practice shows that the main disputes in the sphere of lease of land plots concern such issues:
Determining the amount of rent:
- Court cases: Disputes often arise as to the reasonableness of the amount of rent and its indexation. Court practice shows that courts usually side with tenants if the rent does not correspond to market conditions or legal requirements.
Breach of contract:
- Default: Legal disputes often arise due to the failure of the lessor or lessee to fulfill the terms of the agreement. In particular, this concerns late payment of rent or use of the land plot not for its intended purpose.
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Termination of Lease:
- Grounds for termination: Courts consider cases on termination of a lease agreement at the initiative of the lessor or the lessee. As a rule, the grounds for termination are substantial violations of the terms of the agreement by one of the parties.
