1. Property rights in Ukraine
Completed:
FES-2, Finance student
Andrii Datskiv
2. What exactly will we look at?
1. Basic
overview of
property
rights in
Ukraine
2. Judicial protection of
property rights and its
guarantees:
2.1) Registration of real estate
ownership rights
2.2) Guarantees of judicial
protection of property rights
2.3) Failure to comply with court
decisions
2.4) Problem in the realization of
property rights in the field of
construction
2.5) Ownership rights in
temporarily occupied territories
3. Restriction of
property rights by
authorities:
3.1) Purchase of
private property for
public use
3.2) Moratorium on
the sale of
agricultural land
3.3) Violation of
property rights by law
enforcement
agencies
4.
Recommendations
for improving the
status of
implementation
and respect for
property rights in
Ukraine
3. 1. Basic overview of property rights in Ukraine
- In the International Rating of Rights Protection for
2018, Ukraine scored 4.3 points out of 10, which
ranked it 110th in the overall rating of the countries.
- The need to improve the judicial protection of property
rights and the enforcement of judgments, which are
often violated due to the corruption of the judicial
system and the often too long time to hear cases, is of
great urgency.
- Poor protection of property rights discourages foreign
investors and diminishes the desire of Ukrainian
citizens to start a business, as the risk of it is partially or
completely unpaid because of the possible threat of
corruption thresholds such as granting the necessary
permits or licenses.
5. 1) Registration of real property rights
- Currently, two authorities have the right to register real estate property rights -
the State Registration Office and notary offices, but these bodies work poorly, and
the registration procedure itself allows for several different owners and
documents to be inconsistent. Notaries go through too little procedure to control
the qualifications and legality of the services they provide and are often involved
in corrupt schemes.
- In Ukraine, many are not afraid to break the law, because the punishment for
this is minimal - often it is a fine of a small amount, a small one so often that
citizens intentionally break the law, pay a fine, but for example, illegal
construction will not be taken away. Often, such actions are caused by the higher
"price" of processing all the necessary documents for construction through
corruption.
- Excessive bureaucracy, poor coordination and poor transparency of transactions
in real estate registers create another complication. Establishing a system of
issuing real estate documents by three bodies for complete registration of the
necessary documents creates additional difficulties and opportunity for
corruption.
6. 2) Guarantees of judicial protection
of property rights
- Violation of private property law is quite common in Ukraine. There are
many similar examples in the Unified State Register of Judgments. Often, the
timeframe for a case exceeds the optimum or maximum, and sentences are
rendered even when private property could be completely misappropriated.
Ukraine was ranked 10th in the ranking of the Rule of Law Index for the
protection of property rights.
- The main problem of judicial protection of property rights is the massive
corruption of judges and prosecutors. According to the Global Corruption
Barometer, the Ukrainian judicial system remains one of the most corrupt
among the existing judicial systems along with the judicial systems of
Moldova, Azerbaijan and Afghanistan.
- The problem is also the slow and unlikely response of the courts to the
plaintiff's appeal during the case not to take certain actions with his property
on the part of the defendant or third parties, such as not to build a real estate
on the disputed plot, to cut down trees or to demolish the structures despite
the procedural law remain without proper court response.
7. 3) Failure to comply with court decisions
- The biggest violator of court rulings are state authorities, which
almost always fail to enforce decisions on citizens' claims - it is often
easier to obtain a court decision from a non-state company or
individuals than from state authorities since for a long time there was
no mechanism for effective state accountability. the mechanism is still
rather imperfect.
- The amount budgeted for in the 2019 state budget to cover court
decisions is UAH 1,184010356 billion. Although this amount shows
the ability of the state to recover damages to citizens, the full amount
to cover court decisions against the state in the previous 6 years
varied from 4 to 8 billion hryvnias, showing that the allocated funds
are at least four times less than the real amount of debt.
- According to statistics, only every third court decision is enforced. As
a result, more and more people are turning to the European Court of
Human Rights for complaints before national courts.
8. 4) Problem in the realization of property rights in the
field of construction
- When attracting funds from individuals, namely the purchase of future apartments in
multi-apartment real estate under construction, the rights of depositors are often violated -
cases of "frozen" construction are quite common because many buyers of future
apartments do not receive an apartment at all or receive living space without electricity and
water supply.
- Another problem in the realization of property rights is "long-term construction" - delaying
the visit of the object, because of which a large number of depositors for a considerable
period can not begin to live in the purchased apartment - often the waiting period is 7
years.
- Also, the problem of unrealizing real estate ownership is the risk of the artificial or natural
bankruptcy of the developer, as well as the lack of insurance risks for both the developer
and the investor, which although provided for in the law of Ukraine "On Insurance", but do
not create conditions for control by the insurer of the insured entity - most often the
developer, which often leads to the wrongful receipt of the insurance policy or not receiving
it at all, in particular, due to frauds to artificially identify themselves bankrupt, both
investors and insurance will suffer many.
9. 5) Ownership of temporarily occupied territories
- On the territory of hostilities in eastern Ukraine and temporarily
uncontrolled territory of the Crimea, it is almost impossible to ensure the
protection of the rights of the authorities, since the jurisdiction of the
Ukrainian legislation does not extend to the territory not under the
control of the state. Residents of such territories cannot count on the
protection of any of their rights either from the state that previously
controlled the data of the territory or from the attacker since formally this
territory is not part of the territory of the aggressor state.
- It is only possible to obtain compensation for damage caused by
hostilities by establishing the party causing damage, proving such
damage, proving the fact of causing such damage by the party and
assessing the damage caused by money. It is almost impossible to make a
proper assessment of the inhabitants, so it is not a matter of protecting
the right of authority but of violating it without further Human Rights
Action.
11. 1) Purchase of private property for public use
In Ukraine, the Law on the “Alienation of Land Plots and Other
Real Estate Objects Placed in Private Property, for Public
Purposes or Motive Purposes, is in force”, so there is one
danger of property rights violations, namely fixed by law, the
expropriation of land and all property thereon. The land
alienation procedure can only be used in special cases, such as
the construction of transport routes, pipelines, high-voltage
power lines, the development of mineral deposits, or other
similar cases related to public infrastructure. In such cases, the
law provides for preliminary and complete compensation of
land and property on them and only with the consent of the
parties. However, due to widespread corruption, lack of or
little punishment, laws are often violated by the state
authorities themselves - often the problem is incomplete or
complete lack of redress and without the prior consent of the
parties.
Such a problem arises because of the imperfect
valuation of the land and property on them that
are subject to alienation. A well-known case is that
when alienating land for the construction of the
Kyiv-Chop section, their owners were offered
compensation of UAH 5 per square meter, and this
price is very far from the market price. Due to
factual indifference to the parties' prior consent to
the amount of compensation - conflicts often arise
on this basis, but the plaintiffs (landowners)
almost always remain with nothing - the courts
often ignore the refusal of the proposed amount
of compensation, in addition to the consent of the
landowner. Plots are often not even expected,
listing the compensation in advance, immediately
after determining its size.
12. 2) Moratorium on the sale of agricultural land
- The moratorium on agricultural land sales ran from 2001 until March 30, 2020. The moratorium provided for
a ban on the sale of land to legal entities and foreign nationals or companies. Initially, the moratorium was
adopted as temporary, but the Verkhovna Rada of Ukraine extended the moratorium every year for several
more years, which subsequently led to a 19-year moratorium. The effect of the moratorium was a high level
of corruption, as legal services were often rendered dishonest and issued contracts for the so-called "life-
long" lease of land, "shadowing" the land market and monopolizing this market by agro holdings, which used
this situation to prevent other market players from accessing information. about the sale of plots.
- There have been several attempts to "push" the bill on the use of agricultural land, which was extremely
contradictory - except for the previous effect of the moratorium conditions, it was now envisaged to
introduce priority in the possibility of acquisition of land for sale - the first priority was a state-owned state, a
small state, only the third priority is citizens of Ukraine. Also, for Ukrainian citizens there were strict
requirements for the possibility of acquiring the land plot - the area should not exceed 100 hectares (for the
State and the Land Bank such a restriction was not foreseen), the citizen had to live for not more than 20
kilometres from the land for sale within 3 years, to know the basics farming and commodity production.
13. 3) Violation of property rights by law enforcement
agencies
- Before and after the police reform, the abuse of powers by law enforcement officials in Ukraine was
frequent and often unpunished. The most common causes of the abuse of authority and violation of
property rights are the unlawful seizure of private property or money during searches, such as the
seizure of more than Ukrsobank computers, the misappropriation of printing products in Kharkiv
during the search, the disappearance of UAH 100,000, the return of a purse after a robbery from
which money and other similar cases have been previously seized. One of them was even the illegal
seizure of a car in Kamianka-Podilsky, which not only did not return but also stated in plain text that
they thought of its former legal owner and did not intend to return the car.
- The situation of police relations with mobile coffee shops in Kyiv is also acute. Police have repeatedly
taken out such vans on evacuators without prior warning and reporting the reasons for the
evacuation of private property. The organization of this network operates legally, with all the
necessary documentation, but other establishments often work without licenses and documents,
but police officers do not search or remove the property of the cafes because they pay bribes to its
employees.
14. 4. Recommendations for improving the status of
implementation and respect for property rights in Ukraine
1) Strengthen the control of the
legality of actions of employees of
internal bodies to prevent the
intentional use of official position
2) Improvement of the provisions of the
functioning of the land market in Ukraine,
strengthen the protection of property rights of
landowners to prevent forced expropriation of
land and finalize the appropriate mechanism
5) Improve the
existing system of
registration of real
estate rights
3) Improve the mechanism of control and
the body of enforcement of court
decisions itself, allocate sufficient money
from the budget of Ukraine to repay the
debt to the citizens
4) Strengthen the protection of investors' property rights
future housing of multi-family homes and facilitate the
creation of a state resource that reflects reliability,
documentation and other important factors when choosing a
future housing. Although such a service already exists (lun.ua),
it is not widespread
and government support.
Despite all the simplification of registration of real estate rights, the real registration process remains quite complicated, as declared electronic registration does not work, which is not the best result for even relatively underdeveloped countries. Although the registration period is officially reduced to 5 days and up to 14 days in the case of an enterprise, there are often problems with the poor functioning of the application services and the subsequent issuance of documents, which increases the period of registration of real estate documents, which reflects the unavailability of the state registration system to significant acceleration granting property rights and conducting the necessary expertise, partly due to poor administration and red tape, and partly due to the corruption of the registration and reluctance departments illegal source of income. Also, the redistribution of powers and bodies responsible for the registration of property rights and simplification of these procedures eliminated the Act of Technical Inventory, which was an ambiguous decision: on the one hand, the Monopoly of the Bureau of Technical Inventory for carrying out such processes was eliminated and the disadvantages associated with low productivity and overcoming were eliminated the Bureau, and on the other hand, the Act prevented uncontrolled construction and redevelopment. There are also difficulties in the field of land rights registration - the initial registration is through the State Registration Service, but the documents must be submitted to the State Land Agency. Initially, the rights to the land plot are registered in the State Land Cadastre, the information is transferred to the State Registration Service, where the land rights certificate is registered, however, the documents required for the last procedure are issued by the State Land Agency. Secondary registration is carried out by notaries or the State Registration Service. Such a complicated registration process and the presence of two, still unbundled registers, significantly reduce the transparency of the procedure and its efficiency, in particular, such unrecorded transactions refused to register land, known cases in Lviv and other, less publicized, situations. However, the positive trends are still being followed, given the ongoing reform of the document registration system, the simplification of procedures and the effort to transact transparently.
Court decisions are also often questionable - many judges often have a one-sided position in cases where an individual issuing a company, keeping the post-Soviet type of thinking pre-set against an individual, considering only the number of persons on both sides and not the real rule of law.
One of the reasons for this frequent failure to adhere to the decisions of judges, in addition to corruption, is the adherence of the State Judicial Service to the jurisdiction of the Ministry of Justice, and not to the judiciary. Such poor coordination between disparate bodies and the poor remuneration of court decision-makers, though not least, depends on the paradigm of thinking of its employees, who, by post-Soviet attitudes, work hours rather than work.
However, there are positive developments in this regard in the form of a draft law of Ukraine “On strengthening the protection of investor rights when investing (financing) housing” or other draft laws underway.
The method of remittance is horrendous: a certain amount is transferred to a deposit account of a local notary's office, often without even notifying the person, because of this, even the small amount of compensation is not received by landowners due to the poor or lack of control over the transfer of such notarial landlords. Even when appealing to the court for a preliminary disagreement on the amount of compensation and subsequent non-receipt of even these funds, the court does not respond and the person remains with nothing. The problem can be large-scale, such a case occurs in the construction of transport connections through a large number of private land plots, the construction of airports or the planned development of minerals in the territories of the same private land - a known case with the planned development of shale oil fields. several villages should be alienated or in the case of sports infrastructure construction, such as the construction of infrastructure facilities for, Also, dishonest lawyers often circumvent the moratorium on land sales by designing the situation as alienation of land for public use.
Such conditions would not only lead to the monopolization of land in the hands of the state, but would also create a considerable field for corruption since the requirements to know the basics of farming, commodity production and living within 20km of the land could be interpreted extremely widely, the first two points were solved because of dishonest lawyers, and the third point does not indicate whether it is the place of actual residence or the place of registration of the place of residence, and the term would be managed through the same dishonest lawyers. Fortunately, such bills were never adopted by the votes of the Verkhovna Rada. Since March 30, 2020, the moratorium has ceased to be valid by a majority of the Verkhovna Rada of Ukraine votes. This opens up a huge field for action, but there are many risks as well, so it is important to maximize the conditions of the land market to prevent usurpation of land in one hand or to avoid the conditions of medium prices that are too low or too high.
Frequent are the attempts by the police to seize real estate by illegally seizing it from the rightful owners. Attempts to evict single elderly people are most frequent, as they will not be able to assert their right to legal housing. There have been instances where unlawful acts by police officers have been punished but of the total mass so small that it is more an exception than a rule. The situation of police relations with mobile coffee shops in Kyiv is also acute. Police have repeatedly taken out such vans on evacuators without prior warning and reporting the reasons for the evacuation of private property. The organization of this network operates legally, with all the necessary documentation, but other establishments often work without licenses and documents, but police officers do not search or remove the property of the cafes because they pay bribes to its employees.
