On 18 May 2021, the Ukrainian parliament adopted Draft Law No. 2195, which introduces electronic auctions for the mandatory sale of state and municipal land plots or the sale of rights to land plots (i.e. lease, superficies, emphyteusis).
In addition, the Draft Law states that privately owned land plots and rights can be transferred using this electronic procedure if the owner agrees. By introducing this automatic electronic system, the procedure is expected to ensure more transparency in land auction process.
The Draft Law inter alia provides that:
- land auctions are conducted via an electronic trading system in the form of an online electronic auction;
- land auctions are conducted in accordance with an agreement between the organiser of the auction and the operator of the electronic platform;
- the organiser publishes an announcement of land auctions with all related documents and materials in the electronic-trading system;
- the initial purchase price for state and municipal land plots cannot be lower than the expert monetary valuation;
- the initial amount of the annual rent for state and municipal land plots cannot be lower than the amount of land tax;
- the initial purchase price for state and municipal agricultural land plots cannot be lower than 7% of the normative monetary valuation of state and municipal agricultural land plots;
- the guarantee deposit will be 30% of the initial price but limited at 2,500 times the minimum living wage, which is UAH 5,472,500 (EUR 163,021) as of 1 June 2021. The amount of the guarantee deposit will be deducted from the sale price of the lot payable by the winner of the land auction.
- the area of an agricultural land plot to be transferred under a lease or emphyteusis agreement may not exceed 20 hectares;
- upon closing an auction, the organiser will publish a protocol of the land auction results, and a respective agreement signed with electronic signatures as well as information on the payment of the amount due by the auction winner.
The procedure for operation and administration of the electronic trading system has not yet been adopted by the Cabinet of Ministers of Ukraine. However, the majority of the provisions of the Draft Law will become effective on 6 July 2021 while the Cabinet of Ministers of Ukraine align the by-laws with the Draft Law provisions. (The timeline for this has not been specified).
CMS will continue to monitor land reform news and will keep you updated on any developments.
For more information on this Draft Law, contact your local CMS advisor or local CMS experts: Anna Pogrebna or Natalia Kushniruk.
Legislation:
Draft Law “On Amendments to Certain Laws on the Sale of State and Municipal Land Plots or Rights to Them (Lease, Superficies, Emphyteusis) through Electronic Auctions” No. 2195 dated 01 October 2019 (in Ukrainian).
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