The Government again sought to «poregulirovat» land auctions

28.09.2010 00:09
Articles about real estate | The Government again sought to «poregulirovat» land auctions September 13 this year, began operating procedure for the sale in 2010 of non-agricultural land use. The procedure is approved by the Cabinet of Ministers of Ukraine № 805 of September 2, 2010 (hereinafter - the "Order № 805").

From the history of the issue.

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This is not the first time the government tries to set rules for land auctions. In particular, in the year 2008 the Cabinet took the decision on this matter twice. For the first time - February 22, 2008. Then, by its Resolution № 90 Cabinet approved the procedure for conducting land auctions. The second time - April 17, the same year, the Cabinet adopted Resolution № 394, which was approved by order of the 2008 land auction. Both actions had been taken for a short period of time on the same subject. The effect of both decrees were almost immediately suspended by Presidential Decree. Both of these rulings were the subject of the constitutional President of the Constitutional Court of Ukraine in 2008 (the last even twice).

The result of this "law-making contest," Government and the President was the decision of the Constitutional Court of Ukraine № 25-rp/2008 on November 11, 2008 in the case № 1-46/2008 (hereinafter - "Decision LCP). Without going into details and motives, we can describe the essence of the Constitutional Court as follows: Resolution of the Government contrary to the provisions of the Constitution and the Land Code, as the procedures for land auctions could be approved only by the law (ie it is the prerogative of the Verkhovna Rada).

What's next?

It is obvious that now repeats the same situation as in 2008. The Cabinet of Ministers approves regulations for land auctions, although to do so he has no right. However, the resolution was adopted, the rules are in force and effect. While his action is not suspended by the President, or it is not canceled by the Cabinet, or not recognized by the Constitutional Court as unconstitutional, or the law, regulation will operate. It should be noted that while we know nothing about whether the ruling appealed to the President of the Constitutional Court.

In this context, fair questions can ask the investor: what if the illegality of orders will be recognized by the Constitutional Court? If land is purchased at an auction conducted by the rules, later declared illegal? What will happen to the ownership of the land in this case?

There is reason to assume that the investor is still able to maintain such land for themselves. The courts, in analyzing such situations, based on the following principle: if the contract is concluded on the basis of a normative act, which operated at the time of signing the contract, the contract is valid. In addition, laws and regulations that are deemed to be unconstitutional, lose their effect only since the decision by the Constitutional Court.

In addition, by itself, the assertion of the Order № 805 does not mean that on this basis will be carried out land auctions. The order number 805 requires that an auction organized person who has a special license to conduct land auctions. In accordance with the same order number 805, the rules for licensing (licensing terms) for this purpose has yet to be developed Goskomzem in consultation with the State Committee.

September 13 this year at the site of the State Committee made public a draft "License conditions of carrying out economic activities by land sales." Discussion will continue until October 13. Further, if the license terms will be accepted in October, how much time this year will act order number 805? Here it should be recalled that in accordance with Art. 137 of the Land Code, land auctions are held not earlier than 30 days after publication in the press announcement about the property. Thus, even if this October (1) will be approved license conditions, and (2) will be issued a license to companies that will conduct auctions, and (3) will be held between the bid to host the auction (as required by Order № 805), and (4) will be selected areas to form lots and prepared a package of documentation for each lot and will be given the announcement of the auction, then in that case, the time the auction will be very small. In fact, at the disposal of the organizers will be only one month of December. A further order of number 805 will cease to operate. After all, it sets the order of sales in 2010 of non-agricultural land use. Consequently, in 2011 it will no longer operate. Then, market participants will only have to wonder - when will the new rules?

Local Rules

Despite the fact that a special law on land auctions do not have time to time in the press there are reports about the land auction. Local councils make local rules for land sales and management of the sale of plots. In Kiev, Sevastopol, Zaporozhye, Khmelnytsky, Zhytomyr and other regional centers of city councils by their decisions address this gap in the legislation. In our opinion, as soon as local councils will face the need to cancel these decisions in connection with the entry into effect of Decree of the Cabinet, which approved the Order № 805.
Content tags: land Legislation
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