Specially for Agropolit.com
The Verkhovna Rada of Ukraine adopted the draft law No. 7636 “On Amending Certain Legislative Acts on Recovery of the System of Registration of the Rights to Lease the Agricultural Land Plots and Improving the Land Protection Legislation” in the second hearing.
This law sets out some material amendments to the agricultural land lease rules in returning the previous conditions and imposing the new ones.
Thus, we decided to figure out the material changes for the agricultural businesses after the law becomes valid.
1. Restoration of the right to buy out the land plots for permanent use with a 10-year increment payment
Peculiarities:
• this right applies not only to citizens but also to legal entities which permanently used those land plots when that law became valid yet since 1/1/2024;
• this right also applies to the lessees who changed their right to permanent use to the lease before that law became valid;
• this right applies not only for agricultural (farm) production lands but also for other lands, both agricultural and non-agricultural;
• the cost of buying out the agricultural land plots shall equal the area regulatory monetary valuation, and in case of non-agricultural lands – the expert valuation cost;
• if the payment is affected in increments, the term shall be defined by the buyer but it cannot exceed 10 years for agricultural lands and 30 years for non-agricultural ones;
• the cost of the land plot shall be presented as annual payment divided into equal parts considering the inflation rate, with the right for early payment;
• the buyer shall acquire the ownership right after it affects the first payment yet it will have limited right to the sale of the land plot until the payment is affected in full;
• the citizens of Ukraine inheriting the right to permanent use of the agricultural land plots for farm production shall also have the right to buy out the land plot (except for the cases where these land plots were transferred into ownership or use by the individuals or legal entities); and
• the buyers shall comply with the general requirements for the owners (buyers) of agricultural land plots.
2. Automatic renewal of the lease, sublease, and emphyteusis agreements during the martial law shall cease from the day the law is adopted.
Peculiarities: considering this cessation of automatic renewal of the agreements, the agreements which were renewed after the imposition of the martial law shall remain valid for a year since the cessation and shall not be terminated. At that, to further renew any agreements from the day the mentioned Law becomes valid, one shall comply with the general procedure of using the primary right of the lessee to conclude the lease agreement for the new term implied by Art. 33 of the Law of Ukraine “On the Land Lease.”
3. Registration of new lease agreements
The military administrations shall cease the registration of any lease, sublease, and emphyteusis agreements on the transfer of rights to land use for land plots with all the peculiarities as soon as the State Land Cadaster resumes its operation. From this moment on, the state registration of the lease right shall resume.
Hence, it will effectively mean the return to the previous rules of the lease right registration.
• A land user under the agreements registered in the military administration shall within two month from the moment the State Land Cadaster resumes its operation submit an application for registration of the relevant lease or emphyteusis right. If this right is not registered within three months, the agreement shall be deemed terminated.
• If the agreement for land use is terminated due to failure to submit the relevant application within three months, the user shall be entitled to harvest the sown land plot, paying the owner the proportionate amount for land usage. This rule shall cover the cases of harvesting by the lessee, sublessee, and emphyteusis holder whose right to land use stems from the land plot lease, sublease, and emphyteusis agreement if the term of the use of the land plot expired within two months since the provisions in this paragraph became valid.
• The procedure for state registration of the lease, sublease, and emphyteusis agreements on the transfer of rights for land use in the military administrations can be resumed within 30 days from the moment of adopting the decision on suspension of the State Land Cadaster operations throughout Ukraine.
• The conclusion of lease, emphyteusis, and superficies agreements for agricultural lands of the state and communal ownership form without the tender shall be canceled.
Hence, generally, the Law is aimed at eliminating the loopholes for abuse of the state and communal lands, resumption of the majority of the lease right registration procedures, and at the same time providing for certain protection in quite feasible cases, considering the continuation of the full-scale war with the northern aggressor.