Simplified Procedures for Acquiring Uncultivated Agricultural Land

On 7 April 2022, the Draft Law of Ukraine On Amendments to Certain Legislative Acts of Ukraine Regarding Establishing Conditions to Ensure Food Security Under Martial Law,No. 2145-IX, dated 24 March 2022, became effective. The law aims to secure crop production for the country during martial law. For this purpose, it sets out a legal framework for agricultural producers to have easy and quick access to agricultural land that is not used or to that whose users are currently unable to cultivate the land.

It should be noted that this law deals only with urgent issues, andnot all the land–use problems caused by the Russian military invasion have been addressed. Although justified in terms of security, the main obstacle to land turnover is the temporarily closed State Land Cadastre and State Registry of Proprietary Rights. With no access to these registers, it is currently impossible, e.g. to form a new land plot, conduct a change of designated purpose of a land plot, complete a transfer of state-owned land plots to amalgamated communities, or obtain a normative monetary valuation of a land plot. However, the government is working hard on further amendments to legislation, which should introduce alternative or temporary rules enablingland relations close to normal, even if the land and property registers remain inoperative for some time.

Particularities of transferring non-private agricultural land plots into leases

Law No. 2145-IX defines special temporary conditions of agrarian land lease agreements for:

• state and municipal land plots, including those that are in permanent use by state and municipal entities;

• land plots that were contemplated for privatisation, but were for some reason left unclaimed or unallocated;

• land plots of collective ownership, i.e., former post-soviet collective enterprises, leased by local authorities.

During martial law, authorities are exempted from auction procedures when leasing these land plots. The plots may be transferred into a lease for one year for agricultural production considering the following exceptions from the standard terms:

1. a land lease agreement should be executed in electronic form and signed with electronic signatures;

2. the rent must not exceed 8% of the normative monetary evaluation of the land plot;

3. the lessee will have no rights to: carry out construction;renew the land lease agreement or enter into a new land lease agreement determining a new term; change thedesignated purpose of a land plot; grant sublease; andestablish servitudes.

Simplified land management documentation for leasing agricultural land plots

Formation of an agricultural land plot on state-owned or municipal land for a lease during martial law is simplified. The procedure will only require drafting “technical documentation on land management regarding land inventory”. The authority granting the lease should approve this documentation. No registration of the land plot in the State Land Cadastre and no assignment of a cadastral number is required. This documentation on land inventory is used as an obligatory annex to the land–lease agreement.

Registration of agricultural land lease

According to the new law, a lease title granted during martial law is not subject to registration with the State Registry of Proprietary Rights. However, a military administration should register agreements in a Book of Land Use Agreements, which format the Ministry of Agrarian Policy and Food should approve soon. It is the granting party that applies to register the agreement, and this application should be made via email.

These leases cannot be extended and they will terminate when the one-year term expires. Therefore, a seven-year period, as de minimis for land lease agreements for agricultural land plots stipulated by Ukrainian legislation during peace, does not apply. If the lease agreement expires before harvesting, however, the lessee has a right to harvest the crops, paying the landlord rent for the period of the temporary land–plot occupation.

Automatic extension and assignment of currently effective use rights

Under the law, all leases, subleases, emphyteusis, and easementsfor agricultural land plots (private and state/municipal) that expire during martial law are automatically extended for one year without an expression of will by the parties. The parties cannot reject this extension.

To make these use rights and permanent use rights transferable (if the latter are held by a private company), the law also stipulates that users of agricultural land plots are entitled to assign their land rights to third parties for one year. The landowner’s consent in such case is not required.

As with the leases, an assignment agreement: (i) does not require changes to the State Registry of Proprietary Rights to be made; (ii) should be made in electronic form; and (iii) submitted via email to the relevant military administration for registration.

By Mykhaylo Soroka, counsel at the Kyiv office of CMS Cameron McKenna Nabarro Olswang

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