Are there any specific regulations and/or laws which apply to leases of particular categories of real estate, such as residential, industrial, offices, retail or hotels and what is their impact?
Under Ukrainian law all specific regulations are agreed on by the parties to the contract but general regulations imposed by Ukrainian law also apply. These include certain essential provisions and dictate the form of the contract.
The leasing of land as opposed to buildings is subject to stricter regulation. Thus, a leased plot of land must be used exclusively in accordance with its designated purpose. Additional restrictions on land use may be imposed by authorized bodies or established by virtue of law. These restrictions depend on the type of land involved, eg protection zones for certain facilities (such as historical monuments, recreational zones or underground utility lines) and areas located near facilities that may cause damage to the environment (such as factories or nuclear power stations), and are subject to special regimes governing their use, eg a prohibition on the construction (total or partial) of specific types of structure), restrictions on carrying out certain kinds of activity etc
Additional restrictions are imposed by Ukrainian law for the use of residential buildings. For example, premises located in residential buildings cannot be used for industrial/production purposes. There are different interpretations of the law as to whether residential buildings may be used for non-residential purposes other than industrial (eg as offices), but the general approach of officials is that any use of residential buildings or premises for purposes other than residential is prohibited. At the same time, there are no substantial penalties or liabilities for using residential premises for other purposes – Ukrainian law provides for only immaterial administrative fines in such cases. It is also possible to change the status of residential premises to non-residential.
There is also specific regulation applied to the lease of state and municipal real estate. As the Law ‘On lease of state and municipal real estate’ came into effect on 01 February 2020, a new procedure for the lease of state and municipal real estate was provided for. Under this procedure state and municipal real estate will be included by a competent authority in two separate lists. The real estate from the first list (as opposed to the real estate from the second list) shall be leased out at an auction.
Leases of real estate (other than land, residential apartments and state or municipal real estate leased out on an auction) for terms over three years are subject to state registration, and must be notarized. Leases of state and municipal real estate are also subject to notarization if granted at an auction for a term more than five years. Leases of land are subject to state registration irrespective of the lease term. Lease of residential apartments is not subject to state registration.