On August 15, 2022, the Verkhovna Rada of Ukraine adopted in the second reading the Law “On Guaranteeing Property Rights to Real Estate Objects to Be Constructed in the Future.”
The main purpose of the draft Law is to establish legal mechanisms for the state to guarantee property rights to unfinished construction projects and future real estate objects, for which the right to carry out construction work was obtained after the effective date of the Law.
The draft Law proposes the following:
- to establish the conditions under which unfinished construction projects and future real estate objects may be considered civil law objects;
- to define the specifics of investing in and financing construction projects carried out using private funds;
- to define the characteristics of agreements on organizing and financing construction projects;
- to outline the key disclosure requirements for developers (construction customers, development managers, or construction financing fund administrators) regarding divisible parts of unfinished construction projects (e.g., multi-apartment buildings);
- to introduce a mechanism for state registration of ownership rights to unfinished and future real estate objects;
- to create the possibility of obtaining construction permits and registering ownership of a construction project and its components (apartments, garage units, other residential/non-residential premises, parking spaces, etc.), based on the “single-window” principle;
- to ensure the commissioning of completed construction projects for which a special property right for an indivisible unfinished project or future real estate object has been entered into the State Register of Property Rights, and their ownership is registered under the “single-window” principle;
- to introduce a guaranteed share of a real estate construction project — a set of future real estate objects within a divisible unfinished building (in each construction phase or complex), the property rights to which are encumbered to guarantee project completion in case of financial insolvency of the developer;
- to define a list of persons entitled to the first right of disposal or transfer into trust ownership as a way of ensuring obligations related to unfinished or future real estate objects, and the moment when such a right arises;
- to determine the specifics of transactions involving unfinished and future real estate objects, including the conclusion, performance, and termination of purchase-sale agreements;
- to define the procedures for notarization of transactions related to unfinished and future real estate objects;
- to regulate the specifics of mortgaging such objects;
- to regulate issues related to the protection of unfinished and future real estate objects where a special property right has been registered for a deceased person in the State Register of Property Rights;
- to improve the procedure for selling future real estate through construction financing funds;
- to define enforcement procedures for unfinished or future real estate objects within debt collection processes;
- to improve legal provisions related to energy efficiency in buildings;
- to establish the amount of the state duty collected by state notaries for certifying contracts for the alienation of indivisible unfinished and future real estate objects.
✅ Experts are advised to review the Opinion of the Main Scientific and Expert Department of the Verkhovna Rada of Ukraine on the draft Law of Ukraine “On Guaranteeing Property Rights to Real Estate Objects to Be Constructed in the Future.”
Ⓒ 2022