Analysis of the Draft Law “On Amendments to Certain Legislative Acts of Ukraine Concerning the Creation of Conditions for Ensuring Food Security during Martial Law”

Providing both the civilian population and the armed forces with food is an extremely important challenge for a state at war.  In order to improve the conditions for agricultural production, the Parliament adopted the Draft Law “On Amendments to Certain Legislative Acts of Ukraine on Creating Conditions for Ensuring Food Security in Martial Law” (No. 7178 of March 19, 2022). The Draft Law supplemented Section XX of the “Transitional Provisions” of the Land Code of Ukraine with norms which, in particular, provide for the following features of the regulation of land relations during martial law:

1. 1. Regarding the renewal of agreements on rights to agricultural land

1) lease, sublease, emphyteusis, superficies, land easement agreements are considered renewed for one year without the expression of will of the parties to the relevant agreements and without entering information on renewal of the agreement in the State Register of Real Property Rights. This applies to the agreements where the term of land use has expired after the imposition of martial law. By form of ownership, this applies to land:

– of state, communal property, unclaimed, unallocated land plots, as well as land plots that remained in collective ownership and were leased by local governments;

– of private property.

2. 2. Military administrations have been granted the right to lease agricultural land

District military administrations may lease land by concluding an agreement, which has the following features:

– subject – land for commercial agricultural production;

– term – up to one year;

– procedure – without land auctions. The state registration of the agreement is entered into the Book of Registration of Land Tenure and Land Use in Martial Law. Registration is carried out by the military administration at the same time as the conclusion of the agreement. At the same time, the right to lease land in the State Register of Real Rights to Immovable Property and their Encumbrances is not subject to state registration.

– signing – is concluded only in electronic form, certified by qualified electronic signatures of the tenant and the landlord;

– termination – terminates with the expiration of the term for which it was concluded, can not be renewed, extended, concluded for a new term. At the same time, the termination of the powers of the military administration, which leased the land plot, is not a ground for termination, change of the land lease agreement.

– which plots are covered – by the form of ownership, they can be plots of state and communal property (except those that are in the permanent use of persons and do not belong to state, municipal enterprises, institutions, organizations), as well as plots that remain in collective ownership collective agricultural enterprise, agricultural cooperative, agricultural joint-stock company, unallocated and unclaimed land plots and land shares (units);

– possible transfer of land plots of enterprises – transfer of agricultural land plots by military administrations, which are in constant use of state and communal enterprises, institutions, organizations, is allowed for rent. The lease of such land plots is carried out with the written consent of the head of the relevant state, municipal enterprise, institution, organization.

The Law establishes the conditions for the transfer of the plot, in particular:

– the amount of rent may not exceed 8 percent of the normative monetary value of the land plot, which is determined from the average normative monetary value of a unit of arable land area in the region;

–  the rights of the tenant are limited, in particular: the tenant of the land plot is not entitled to: compensation of own expenses for the improvement of the land plot; renewal of the land lease agreement, conclusion of a land lease agreement for a new term using the tenant’s preemptive right; sublease of land; establishment of land easement; land exchange; construction of real estate (buildings, structures) on the land plot; establishment of perennial plantations on the land plot; preemptive right to purchase the leased land in case of its sale; alienation, transfer of the right to use the land plot as collateral (mortgage); division of a land plot, its merging with another land plot; use for own needs of common minerals, peat, forests, water bodies, as well as other useful properties of land available on the land plot; change of purpose of the land plot;

– the formation of a land plot is carried out in a simplified manner without entering information about such land plot into the State Land Cadastre (state registration) and assigning it a cadastral number. Technical documentation on land management for land inventory is developed following the decision of the military administration and approved by it. The procedure for forming a land plot is regulated in detail by law.

3. 3. Prohibition of free transfer of state and communal lands to private ownership

Free transfer of state and communal lands to private ownership, granting permits for the production of land management documentation for the purpose of such free transfer, development of such documentation are prohibited.

4. 4. Land auctions for agricultural land are not held

Land auctions for lease rights, emphyteusis, superficies for agricultural land of state and communal ownership are not held. Auctions started and not completed before the entry into force of the Law are considered canceled.

5. 5. Right of land users of agricultural land of state and communal property to lease it

Land users who use agricultural land plots of state and communal ownership on the right of permanent use (except for state, municipal enterprises, institutions, organizations), emphyteusis, may lease the following land plots:

– for the term of up to one year;

– for intended use;

– in case of transfer by the permanent user of the land plot for lease, the right of permanent use is preserved;

– the lease agreement is concluded in electronic form. Such an agreement, as well as changes to it, the agreement on the termination of such a lease agreement are subject to state registration, carried out by the district military administration in the Book of Registration of Land Tenure and Land Use during Martial Law. The procedure for maintaining such Book is determined by this Law.

– the right to lease land is not subject to state registration in the State Register of Real Property Rights and Encumbrances. The right to lease land arises from the date of state registration of the land lease agreement.

– such an agreement may not be renewed or concluded for a new term and shall be terminated upon the expiration of the term for which it was concluded;

– restrictions on the rights of the tenant are similar to those covered in section 2 of this article.

6. 6. Right of tenants, subtenants of agricultural land to transfer their rights:

– applies to land plots of all forms of ownership;

– term is up to one year;

– purpose is intended use;

– the consent of the owner is not required, but they shall be notified in writing of the contract concluded;

– basis is a written agreement on the transfer of land use rights between the land user and the person to whom the right to use the land is transferred, concluded in electronic form. The Law defines its essential conditions;

– registration – the agreement is subject to state registration, which is carried out by the district military administration in the Book of Registration of Land Tenure and Land Use during Martial Law;

– transfer of the right to lease, sublease of land under the agreement on the transfer of land use is not subject to state registration in the State Register of Real Rights to Immovable Property and Their Encumbrances. The right of lease, sublease is considered transferred from the date of state registration of the agreement.

– time limit – the agreement on the transfer of land use rights may not be renewed or concluded for a new term and shall be terminated upon the expiration of the term for which it was concluded;

– restrictions on the rights of the new tenant (subtenant) are similar to those covered in section 2 of this article.

The Law states that the termination or abolition of martial law in Ukraine or in its respective localities does not entail termination, modification of the agreements described above, in particular: lease agreements, sublease of land, emphyteusis, superficies, land easement, renewed for one year without the expression of the will of the parties on the basis of this law; lease agreements concluded by district military administrations; agreements on lease of land by land users; lease (sublease) transfer agreements.

In case of termination of martial law, the powers of the military administration, which concluded the land agreement, are transferred to the executive body, local government, which disposes of the land, without amending the lease agreement.