The Law of Ukraine

On Land Lease

Date of Entry into Force:
October 22, 1998

The Law of Ukraine On Land Lease regulates relations which arise between the owner of land plot and other persons due to transfer of land plot into use and ownership. The Law sets that land lease is based on agreement fixed-term paid ownership and use of land plot, which is necessary for the lessee to conduct entrepreneurial and other types of activity.

The objects of lease are land plots which are owned by the citizens, legal entities, municipal economy or state. Land plot may be leased together with plants, buildings, constructions, basins, which are located thereon, or without them.

Lessors may be citizens and legal entities, which own land plots, or authorized by them persons, if land plot is in communal ownership, the lessor shall be village, settlement, city councils within the limits of their competence. Pursuant to the Law, district, oblast, Kyiv and Sevastopol city state administrations, the Council of Ministers of Autonomous Republic of Crimea and the Cabinet of Ministers of Ukraine may operate on behalf of the state as regards to lease of state-owned land plots. The above bodies shall operate within the limits of their authorities.

Pursuant to the Law, the lessees of land plots may be legal entities or natural persons who may own and use land plot on the basis of lease agreement, including:
  • district, oblast, Kyiv and Sevastopol city state administrations, the Council of Ministers of Autonomous Republic of Crimea and the Cabinet of Ministers of Ukraine;
  • village, settlement, city councils and oblast councils, the Supreme Council of Autonomous Republic of Crimea;
  • citizens and legal entities of Ukraine, foreigners and stateless persons, foreign legal entities, international associations of citizens and organizations, as well as foreign states.

Leased land plot or its part may be transferred by the lessee into sub-lease without change of target use, if it is envisaged by lease agreement or with written consent of the lessor. If during one month the lessor does not send written notification regarding its agreement or objection the leased land plot or its part may be transferred into sub-lease.

The lessee, who pursuant to the Law, may own leased land plot, shall have priority right to its acquisition in case of sale, on condition that it pays the price it is sold for, and in case of tender - if its proposal is equal to the one which is the highest out of those offered by the participants of tender.

Pursuant to the Law, lease agreement is the agreement thereof the lessor shall transfer for payment to the lessee land plot into ownership and use for a fixed period, and the lessee shall use land plot according to conditions of agreement and requirements of land legislation.

According to the Law, significant conditions of lease agreement shall be:
  • the object of lease (place of location and size of land plot);
  • term of validity of lease agreement;
  • rent with indication of its amount, indexation, forms of payment, terms, procedure of payment and review, as well as responsibility for non-payment;
  • conditions of use and purposeful use of leased land plot;
  • conditions of preservation of the object of lease;
  • conditions and terms of land plot transfer to the lessee;
  • conditions of return of land plot to the lessor;
  • existing limitations regarding use of land plot;
  • definition of the party which shall bear the risk of accidental damage or destruction of the object of lease or its part;
  • liability of parties.

The object of lease to the lessee shall be transferred by the lessor in the terms and on conditions, which are defined in the land lease agreement by the acceptance act. The concluded lease agreement shall be subject to state registration. Amount, form and terms of land rent shall be set with consent of parties to the lease agreement.

Lease agreement shall be terminated in case of:
  • end of its validity term;
  • redemption of land plot for public needs and forced alienation of land plot on the grounds of public necessity under the procedure set by law;
  • combining of owner of land plot and lessee in one person;
  • death of natural person - the lessee, its conviction to deprivation of liberty and refusal of persons mentioned in Article 7 of this Law from implementation of concluded land lease agreement.;
  • liquidation of legal entity - the lessee.

Land lease agreement shall be also terminated in other cases envisaged by law. Land lease agreement may be broken with consent of parties. On demand of one of the parties land lease agreement may be broken pre-term on the basis of court decision. Unilateral breaking of land lease agreement shall be prohibited.

The Law also sets conditions and limits of responsibility of the lessee and the lessor in case of violation of lease agreement or the laws of Ukraine.
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