July 17, 2018

Land cleaning: collective farm land will become municipal

Preparation for the lifting of the ban on the sale of agricultural land is at full speed in Ukraine.

MPs have finally gotten to the issue of the hundreds of thousands of hectares that officially belong to no one, are not included in the state cadastre, with no one paying taxes for this land or bearing responsibility for what takes place there. The Law on the Improvement of Land Use Regulations adopted on July 10 is supposed to address this problem.

Ukraine is "cleaning up" land issues

This million plus hectares of land comes from former collective and state farms that were never divided into shares, or the owners of their shares never claimed their ownership rights. These land plots are collectively owned, but current legislation has no such form of ownership, and there is no mechanism for managing it as well.

The farmers that wish to obtain this land are unable to do so legally. Local budgets are also suffering from it, since this land essentially has no owner, and no one pays for it (it is just used by someone illegally, without having been properly allocated).

This issue has long needed to be regulated at the level of legislation. The adopted law turns the land left after liquidated agricultural enterprises into municipal property. The right to dispose of it will now rest with local authorities.

The few still existing collective agricultural enterprises have been given the opportunity to redistribute the remaining agricultural land by 2020, and to convert non-agricultural land into municipal property. After 2020, local authorities will be able to claim collectively owned land by having it declared ownerless in court.

If it’s inconvenient – swap

Another issue that had to be addressed was the violated integrity of agricultural land. Sometimes parts of land used by different parties are located within a single land array. This causes a number of problems:

- for passage for agricultural machinery over the land,
- for the placement of reclamation systems,
- leaves the land vulnerable to abuse (hostile takeovers) by the user whose plot is located with the land array.

To avoid these unpleasant situations, the law offers land users (lease, emphyteusis of at least 75%) the right to lease/sublease (if the land is already in use by someone else) a land plot within the same array, provided that it is transferred to the owner/user of another plot in the same array for the same period of time and on the same terms. It is possible to exercise this right only if the location of plots creates problems for the rational use of land.

Land users are also granted the right to lease field roads, but only on the condition of easement, to allow other users access to their plots in the array.

By the way, if users decide to exchange land plots by mutual sublease agreements, they don’t even require the owner’s consent – they just need to notify the lessor in writing about the exchange within five days after the state registration of the sublease. Convenient, but on the other hand, this provision of the law contradicts current legislation, since it restricts the owner’s right to manage his property. At the same time, it is the lessee who is responsible before the lessor. In the event of damage, the lessor will demand compensation from the person with whom he entered into the lease, even if said damage was caused by someone else.

The law and all the new rules that it introduces come into force on January 1, 2019.