Trans­parency comes to Ukraine’s real es­tate, land trans­ac­tions

Kyiv Post Legal Quarterly - - Contents - By Iso­bel Koshiw Pub­lic reg­istries

The gov­ern­ment took a gi­ant step to­ward trans­parency this year by open­ing up data­bases for land ti­tles and real es­tate property to the pub­lic. Do­ing busi­ness also got eas­ier: most pow­ers of the cor­rupt State Ar­chi­tec­tural and Con­struc­tion In­spec­torate – which is­sues build­ing per­mits – were stripped.

Pri­vate no­taries now have the rights to com­pete on equal foot­ing with their state coun­ter­parts.

A property tax was in­tro­duced and the min­i­mum lease term on agri­cul­tural land was ex­tended to seven years, and 10 for ir­ri­gated land.

It will take the next year to pro­vide a proper as­sess­ment of th­ese mea­sures, par­tic­u­larly those laws passed in line with de­cen­tral­iza­tion. Making the land and real es­tate data­bases open to the pub­lic in July also in­tro­duced a sig­nif­i­cant law en­force­ment tool. It helps iden­tify the mis­ap­pro­pri­a­tion of state funds and pro­ceeds of bribery among state of­fi­cials.

Pub­lic in­for­ma­tion on real es­tate trans­ac­tions is also a nor­mal part of a mar­ket econ­omy, help­ing gov­ern­ment of­fi­cials as­sess the val­ues of as­sets for tax­a­tion.

“A few years ago it was con­sid­ered dan­ger­ous or im­pos­si­ble to build a registry and open it to the pub­lic. But that turned out to be po­lit­i­cal color,” said Oleg Boichuk, coun­sel at Egorov, Pu­g­in­sky, Afanasiev & Part­ners.

Searches can be made by in­di­vid­u­als as well as property and is more trans­par­ent than data­bases in many Western coun­tries, such as the Bri­tish Land Registry where searches are lim­ited to prop­er­ties.

“It’s good for pros­e­cu­tion. It’s good for trans­parency,” said Ro­man Drobot­skiy, a se­nior as­so­ciate at Asters law firm. “I understand there might be pri­vacy is­sues but right now maybe it's nec­es­sary. Maybe in some time when we have change, it can be re­duced.”

lo­cal of­fi­cials and make them more ac­count­able.

How­ever, not all lo­cal coun­cils have ap­plied for the rights to be trans­ferred from Kyiv.

"We only ex­pect to see (the ef­fects) in the next year. Each city will be in­di­vid­ual,” Boichuk said. “There are some con­cerns that it might in­crease cor­rup­tion…but I think we should try this be­cause the pre­vi­ous sys­tem was definitely not ef­fec­tive."

Law­mak­ers also granted pri­vate no­taries the same rights as state no­taries this year. In the past only the Min­istry of Jus­tice could reg­is­ter land plots and build­ings. This highly cen­tral­ized sys­tem made it a “slow and cor­rupt process” and busi­nesses usu­ally paid “a lot of money,” ac­cord­ing to Alek­san­dra Fe­do­tova, head of real es­tate at Spenser & Kauf­mann law firm. The in­tro­duc­tion of property tax in Jan­uary was sup­posed to fill the bud­gets of lo­cal gov­ern­ments, but many have failed to in­tro­duce the tax and it doesn't seem to have af­fected many property own­ers. Lo­cal au­thor­i­ties only saw a 0.3 per­cent in­crease in their bud­gets from the mea­sure by

Ukraine’s Econ­omy Min­istry has am­bi­tions to place the na­tion in the top 50 of the World Bank’s list of coun­tries where it is eas­i­est to do busi­ness by next year.

A woman walks over a bridge painted in the colors of the Ukrainian flag with a new apart­ment com­plex in the back­ground on Dec. 16 in Kyiv. Af­ter years of se­crecy, real es­tate own­er­ship and trans­ac­tions are now pub­lic records. (Volodymyr Petrov)

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