The Land Code of Ukraine acknowledges the state, communal and private ownership of land. As a rule, land for celskohozyaystvennogo use, rented from private individuals who have received land rights after the acquisition of Ukraine's independence.
In a situation where an investor intends to use the land for crop production, the latter should distinguish between rent land from the lease of land shares.
There are precedents in Ukraine, where the lease of land shares were invalidated as a result of the above reasons. Despite the fact that this attitude is understandable to a certain extent, each case must be resolved separately, we do not agree with the idea that all leases of land shares (stocks) are de facto void. There are a number of normative legal acts, which include the possibility of signing such a contract, and we believe that up until the court decides that a particular treaty is invalid, a lease of land share can exist and be valid.
In practice, situations arise when the owner of the land share by entering into a lease with respect to a land share, will legalize their right to land and receives a state certificate of title to land. In this case, it is debatable about whether the remains valid lease a land share, and whether the tenant is entitled to use the land. In accordance with the typical lease a land share, approved by the State Committee of Land Resources № 5 dated 17 January 2000: In case of allocation of land share in kind, the obligation of the parties to the contract shall terminate, such provisions are generally observed in all existing contracts lease of the land unit.
Given this contractual provision, the owner of a land share certificate may terminate the lease at any time, by legalizing the right of a specific plot.
In this case, the tenant loses the right to use the land since the issuance of a state act, and the use of land without a properly executed documents expressly prohibited in the Land Code of Ukraine.
In the case above, we believe that the tenant of the land unit should have an overwhelming right to conclude a lease agreement with respect to the land allocated to nature, and this situation must make to lease a land share.
If the landlord refuses to enter into a lease with respect to land, the tenant will be entitled to claim the lease contract through the courts.
Taking into account mentioned above, the conclusion of the lease of the land unit provides certain legal consequences, in order to effectively govern the relationship between the parties, we recommend to legalize the ownership of land and ensure its selection in nature, and subsequently enter into a lease a specified plot.
Dmitry Kiselev, Senior Associate BEITEN BURKHARDT