According to Article 14 of the Constitution of Ukraine, Article 1 of the Land Code of Ukraine (hereinafter – the Land Code of Ukraine) land is the main national wealth, which is under the special protection of the state. Land ownership is guaranteed.
Land relations are public relations concerning the possession, use, and disposal of land. The subjects of land relations are citizens, legal entities, local governments, and public authorities. Objects of land relations are lands within the territory of Ukraine, land plots, and rights to them, including land shares (units).
According to Article 134 of the Land Code of Ukraine, land plots of state or communal property is sold or transferred for use (lease, superficies, emphyteusis) in separate lots on a competitive basis (at land auctions), except as provided in part two of this article.
As defined in Article 135 of the Land Code of Ukraine, the procedure for conducting land auctions, defined by this Code, is mandatory if the land auctions are:
a) sale of land plots of state and communal property, their transfer for use by the decision of the Verkhovna Rada of the Autonomous Republic of Crimea, the Council of Ministers of the Autonomous Republic of Crimea, relevant executive bodies, local governments;
b) sale of agricultural land of all forms of ownership;
c) sale of land plots, emphyteusis rights, superficies on them by a state executor, private executor during the execution of decisions subject to enforcement by the procedure established by the Law of Ukraine “On Enforcement Proceedings”.
The sale of privately owned land plots, their transfer for use, the sale of emphyteusis rights, and the superficies on them, except in the case of the above, may be carried out at land auctions only on the initiative of landowners.
Land auctions are held in the form of an electronic auction in real-time on the Internet, the results of which enter into a contract of sale, lease, superficies, emphyteusis of land with the winner of the land auction, who offered the highest price for land for sale or the highest the price for the acquisition of emphyteusis rights, superficies, or the highest amount of rent, recorded during the land auction.
Land auctions are conducted in a state-owned electronic trading system. The procedure for the functioning and administration of the electronic trading system is approved by the Cabinet of Ministers of Ukraine.
The protocol on the results of land auctions and the agreement concluded on the results of land auctions (except for the land purchase and sale agreement) shall be signed with the help of a qualified electronic signature taking into account the requirements of the Law of Ukraine “On Electronic Trust Services”.
The organizer of land auctions is:
- in case of sale of land – the owner of the land, the Verkhovna Rada of the Autonomous Republic of Crimea, the Council of Ministers of the Autonomous Republic of Crimea, the executive body, local government exercising the right of state or communal ownership of land by Article 122 of the Civil Code ;
- in the case of concluding a land lease agreement – a person who, by the law, may act as a lessor of such land;
- in case of concluding a superficies or emphyteusis agreement – the owner of the land plot, the Verkhovna Rada of the Autonomous Republic of Crimea, the Council of Ministers of the Autonomous Republic of Crimea, the executive body, the local self-government body exercising state or communal property rights by Article 122 Civil Code of Ukraine, or a person who has the right to emphyteusis, superficies;
- in case of execution of the decisions which are subject to compulsory execution in the order established by the Law of Ukraine “About executive proceedings”, – the state, private executor.
To conduct land auctions, the organizer of land auctions agrees with the operator of the electronic platform connected to the electronic trading system on the organization and conducts land auctions.
The organizer of land auctions for the sale of land is obliged to notify in writing of such auctions to the subject of the preemptive right to purchase it no later than 30 calendar days before the day of the land auction. The authenticity of the signature on the message is notarized.
The subject of the preemptive right has the preemptive right to acquire land in the property in case of its sale, provided that he pays the price at which such land is sold, and in the case of sale through an electronic auction – provided that he has fulfilled the requirements to participate in the land auction and agrees to pay an equal price offer, which is the largest offered by the auction participants. To exercise the preemptive right, the lessee or other subject of the preemptive right agrees to pay the sale price of the lot, which is equal to the price offer of the bidder who submitted the highest price offer for the lot. In case of refusal to pay such price of sale of the lot, he may give prior consent to pay the price of sale of the lot, which is equal to the price offer of the participant with the next largest price offer.
It is considered that the subject of preemptive right has waived his preemptive right to purchase land at the relevant land auction:
- if he did not fulfill the requirements established by paragraph 2 part 3 of Article 135 of the Civil Code of Ukraine;
- if it has not fulfilled or does not meet the requirements of the auction of Ukraine to the participants of the auction;
- in case of occurrence of the case established by part 17 of Article 137 of the Civil Code of Ukraine.
The Cabinet of Ministers of Ukraine shall establish technical requirements for the exercise of the preemptive right to purchase land in the event of its sale through an electronic auction.
Land auctions are conducted by the agreement between the organizer of land auctions and the operator of the electronic platform. The amount, procedure for payment, and refund of remuneration paid by the winner of the land auction to the operator of the electronic platform shall be established by the Cabinet of Ministers of Ukraine.
The registration fee for the lot is set at 0.1 of the minimum wage, determined by the law on the State Budget of Ukraine on January 1 of the year in which the announcement of the land auction is published. The guarantee fee is 30 percent of the starting sale price of land or emphyteusis rights, superficies, or 30 percent of the starting annual rent, but may not exceed 2,500 subsistence minimum established for able-bodied persons by the law on the State Budget of Ukraine on January 1 of the year land auctions.
The conditions announced before the land auction are not subject to change during the conclusion of the contract of sale of land, superficies, emphyteusis, land lease agreements, superficies, emphyteusis.
One lot consists exclusively of one land plot or rights to it. The area of an agricultural land plot of state or communal property, the lease rights of which emphyteusis are put up for land auction, may not exceed 20 hectares. The price of the lot at the land auction is the sale price of the land plot, emphyteusis rights, superficies, and the amount of rent for the use of the land plot.
Land auctions are held no earlier than 30 days and no later than 45 days from the date of publication of the announcement of the land auction.
A person wishing to take part in a land auction submits through a personal account in the electronic trading system:
a) application for participation in land auctions, signed by a qualified electronic signature;
b) for a legal entity – a copy of the extract from the Unified State Register of Legal Entities, Individuals – Entrepreneurs and Public Associations or a copy of the document of registration in the state of its location (extract from the trade, banking, or court register, etc.), certified by law, translated into Ukrainian (for a non-resident legal entity), information on the state in which the founders (participants) of the legal entity are registered or have a permanent residence, in the authorized (composed) capital of which there is a share of foreign capital, information on the ultimate beneficial owner. If the person does not have a final beneficial owner, information on the absence of the final beneficial owner and the reason for his absence shall be indicated;
– for a citizen of Ukraine, a natural person – entrepreneur – a copy of the certificate of assignment of the registration number of the taxpayer’s account card;
– for foreign citizens and stateless persons – information on the surname, first name and patronymic (if any), citizenship (citizenship) of another state, permanent residence in the state of which the person is a citizen, a copy of the document identifies. Copies of these documents are certified by a qualified electronic signature of the person wishing to participate in the auction;
c) documents confirming the payment of registration and guarantee fees (copies of settlement documents, account statements), and in the case of land auctions for the sale of agricultural land – documents confirming the payment of such payments from the account of the person wishing to participate in bidding opened in a Ukrainian or foreign bank (except for banks of states included in the FATF list of states that do not cooperate in the field of combating money laundering).
The application for participation in land auctions and the documents of the participant attached to it may be submitted before the deadline for submission of applications for participation in land auctions, established by the electronic trading system automatically during the day preceding the day of land auctions, taking into account the requirements of the Cabinet of Ministers.
Land auctions are held in the presence of at least two registered participants, except for the cases established by the third paragraph of the fifth part of Article 138 of the Civil Code of Ukraine.
Land auctions are held according to the procedure of determining the winner, during which participants have the opportunity to gradually increase their bids over three rounds of bidding. During one bidding round, the bidder may increase his price offer at least once by the amount of the minimum bidding step (make a bidding step). The size of the minimum bidding step is 1 percent of the starting price of the lot. The size of the maximum bidding step is not limited.
The protocol on the results of land auctions is formed and published by the electronic trading system automatically on the day of completion of the auction in electronic form. The protocol on the results of land auctions and the agreement on the results of land auctions (except for the contract of sale of land) are signed by the organizer and the winner of the auction by applying qualified electronic signatures in the manner prescribed by the Cabinet of Ministers of Ukraine.
The winner of the land auction shall sign the protocol on the results of the land auction within three working days from the day following the day of its formation by the electronic trading system. The organizer of land auctions shall sign the protocol on the results of land auctions within six working days from the day following the day of its formation by the electronic trading system.
At the request of the winner of the auction, the protocol on the results of the land auction and/or the agreement on the results of the land auction concluded by qualified electronic signatures by the organizer and the winner of the auction may also be signed in paper form.
The protocol on the results of land auctions is the basis for concluding a contract of sale of land, the rights of emphyteusis, superficies, land lease agreements, emphyteusis, superficies. The contract of sale of land is concluded in paper form and is subject to notarization. The agreement on the results of land auctions is concluded between the organizer and the winner of land auctions within 20 working days from the day following the day of formation of the protocol on the results of land auctions.
The right to a land plot acquired as a result of land auctions arises from the date of state registration of such a right by the procedure established by law.
According to Article 138 of the Land Code of Ukraine, land auctions for a lot is considered to have taken place after the winner of the auction pays the sale price of the land plot or the corresponding fee for the use of the land plot and pays the costs of preparing the lot for sale.
Department of interaction with subjects of state registration
and advanced training of state registrars
Office of State Registration of the East
Interregional Department of the Ministry of Justice (Kharkiv)
