Ukraine holds one of the leading roles in the world agricultural exports and serves as one of the guarantors of global food security.
However, because of Russia’s war of aggression against Ukraine, protection, and support of agricultural production is extremely important to prevent the failure of the 2022 sowing campaign.
The current situation requires the efficient and immediate use of all available agricultural land to ensure intensive agricultural production.
Procedures established in peacetime for the transfer of agricultural lands are too complex and cannot be implemented under martial law.
That’s why the Law of Ukraine “On Amendments to Certain Legislative Acts of Ukraine Concerning the Creation of Conditions for Ensuring Food Security in Martial Law” (hereinafter – the Law), which entered into force on April 7, 2022.
The Law is aimed to simplify the circulation of agricultural land for their rational use during the war and establishes the following.
Automatic renewal of contracts for the use of agricultural lands of all types of ownership
This provision is aimed at ensuring the sustainability and predictability of already existing land relations for 2022.
Thus, if after the imposition of martial law (i. e. after February 24, 2022) the term of agreements on agricultural land (lease, sublease, emphyteusis, superficies, land easement) expires, they are automatically renewed for one year with no necessary the will of the parties and without additional registration in the State Register of Real Property Rights.
Renewal of such agreements happens automatically on the grounds of said Law.
Simplified procedure for leasing land for commercial agricultural production
The Land Code of Ukraine stipulates, that rights to land plots of state and communal property may be acquired only on a competitive basis through land auctions.
However, the Law repeals this rule during martial law. In order to ensure the fastest possible transfer of land for use, land auctions shall not be held.
Contracts will be concluded only in electronic form and certified by electronic signatures of the parties.
In conditions of war, the state registration of such agreements will be carried out by district military administrations in the Book of Registration of Land Tenure and Land Use.
Under one contract, the landlord may provide the use of several land plots at once.
New land lease conditions
Not only the procedure for leasing state and communal land changes, but also the rights and obligations of the parties, the terms of the lease of land.
Thus, the lease agreement for agricultural land can be concluded only for one year. The requirement of a minimum lease term of 7 years does not apply to such an agreement. However, if this agreement expires before the harvest sown by the lessee on the land, the lessee has the right to harvest such a crop with compensation for damages caused to the lessor by the temporary occupation of the land.
Such an agreement may not be renewed, concluded for a new term, and shall be terminated upon the expiration of one year.
The amount of rent may not exceed 8 percent of the normative monetary value of the land plot, which is determined from the average normative monetary value of a unit of arable land area in the region.
The law significantly restricts the rights of tenants. Particularly, the tenant of the land plot is not entitled to reimbursement of costs for land improvement, its sublease, establishment of land easement, construction of real estate, division of land, change of its purpose, as well as use of existing minerals.
Formation of land for lease
If a land plot does not have a cadastral number, how is it formed?
During the martial law, the procedure for forming a land plot has also been simplified. Information on the plot is not added into the State Land Cadastre, the cadastral number is not assigned. Before concluding the contract, technical documentation on land management for land inventory is developed.
Such technical documentation is a mandatory annex to the land lease agreement.
The plot is considered to be formed from the moment of concluding the land lease agreement and ceases to be an object of civil rights from the moment of termination of such lease agreement.
Temporary transfer of land lease right
Because of the Russian aggression, some farms, agricultural societies, and individuals were forced to suspend their activities and temporarily stopped using agricultural land that they had previously leased or subleased.
The law provides an opportunity for such tenants and subtenants to temporarily transfer their land rights to those farmers who continue their production activities and need to increase the area of agricultural land.
Thus, for a period of up to one year, the rights to use land plots of all forms of ownership for their intended purpose may be transferred.
The transfer of land lease and sublease rights is carried out without the consent of the landowner on the basis of an agreement on the transfer of land use rights between the land user and the person to whom the land use right is transferred. Such an agreement is concluded in electronic form and must contain information about the parties, the transferred right and the term for which it was concluded.
The lessee must notify the landowner of the transfer of the lease, and the subtenant must notify the lessee in writing within five days from the date of state registration of the contract by the district military administration.
During the period of martial law, permanent users of agricultural land of state and communal property (except state and municipal enterprises, institutions, organizations) and emphyteutists also received the right to transfer their land on lease for agricultural production. The term of such lease shall not exceed one year.
Thus, during the war, ensuring the food security of the state is critical.
We hope that the simplified mechanism for acquiring rights to agricultural land, provided by law, will facilitate the rapid transfer of land and intensify agricultural production in 2022, and Ukraine will continue to maintain its position among world leaders in agricultural production.
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