The Parliament of Ukraine Adopted the Law on Food Security During Martial Law

On 24th March Verkhovna Rada of Ukraine adopted the Law of Ukraine "On Amendments to Certain Legislative Acts of Ukraine Concerning the Creation of Conditions for Ensuring Food Security during Martial Law" ("The Law on Food Security During Martial Law"). The law will come into force once signed by the President of Ukraine and officially published. The Martial Law has been announced in Ukraine on 24th February 2022 in response to the russian military aggression against Ukraine.

The Law on Food Security during the Martial Law simplifies the procedure of the lease of farmlands that should be used for agricultural production. The simplified procedure is deployed for the period of Martial Law.

Automatic renewal of lease agreements concluded before the 24th of February 2022

The agricultural land lease agreements, expiring after the 24th of February 2022, will be automatically renewed for one year. It concerns: 

(a). state- and municipal-owned lands plots; 

(b). unclaimed, unallocated lands plots;

(c). land plots that remained in collective ownership and have been leased by local state administrations;

(d). land plots in private ownership. 

In such a case, the lease right is not subject to registration in the State Register of Property Rights to Immovable Property ("Register").

The lease of state/municipal and unclaimed land plots 

District military administrations ("DMA") will lease for commodity agricultural production for one year:

(a). state and municipal agricultural land plots (except for those that are in the permanent use of persons who do not belong to the state, municipal enterprises, institutions, organizations),

(b). plots that remain in the collective ownership of a collective agricultural enterprise, agricultural cooperative, agricultural joint-stock company,

(c). unallocated unclaimed land plots and unclaimed land shares.

In this case, the land lease fee may not exceed 8% of the normative monetary value of the land plot which is determined by the average normative monetary value of a unit of arable land area in the region.

The formation of plots for their lease is carried out based on technical documentation on land management for land inventory, without lodging the information to the State Land Cadastre and assigning the land plot with the cadastral number. Technical documentation is developed based on the decision of the relevant DMA and is approved by it.

A land plot is considered to be formed once the land lease agreement is concluded; such land plot ceases to exist as an object of civil rights after the termination of the lease agreement for the conclusion of which such land plot has been formed.

The land lease agreement is concluded only in electronic form, certified by qualified electronic signatures, based on qualified electronic signature certificates of the lessee and the lessor.

The prohibition of free transfer of the land to the ownership

The free transfer of the state and municipal lands to private ownership, granting permits for the development of land management documentation for such free transfer, the development of the respective land management documentation is prohibited.

The allowed transfer of land use rights 

Land users, using the agricultural land plots of state or municipal ownership based on the: 

(a). permanent use right (except for the state, municipal enterprises, establishments, and organizations), or

(b).  emphyteusis,

may lease such land plots for the period not exceeding one year to third parties for use of such land plots according to their designated purpose. After the expiration of the relevant term, the lease contract may not be renewed or concluded for a new term, and expires.

In the case of a lease of land by a permanent user, the right of permanent use is preserved. Restrictions (both statutory and contractual) on the lease of land by the permanent user and emphyteusis holder shall not apply. 

Land users, using the agricultural land plots, of any type of ownership, based on:

(a).  lease right, or

(b).  sublease right

may transfer their right to use these land plots (transfer lease right or sublease right) for the period not exceeding one year to third persons for use of such land plots according to their designated purpose. 

The transfer of the right to use these land plots (transfer lease right or sublease right) does not require the consent of the landowner. The person who transferred the lease right shall notify the lessor in writing (and in the case of a sublease right - the lessee) within five days from the date of state registration of the land use right transfer agreement.

State registration of lease 

The right to lease is not subject to state registration, instead, the information on the lease agreement shall be recorded in the Book of Registration of land ownership and land use during the effect of the Martial Law. The state registration shall be performed concerning the following agreements:

(a).  Land lease agreements concluded with DMA. Such agreements are registered by the respective DMA simultaneously with the conclusion of these agreements. 

(b).  Agreements on the transfer of land use right (agreements concluded with persons using land on the right of permanent use or emphyteusis, or lease right, or sublease right). The application for state registration of such agreements is submitted by a permanent user, emphyteusis holder, lessee, or sublessee.

Agreements on amendment of relevant agreements or their termination are also subject to state registration in the Book of Registration of land ownership and land use during the effect of the Martial Law.