SALE OF AGRICULTURAL LAND

At long last, Ukraine has taken a significant step forward in land reform.

For almost thirty years, owners of agricultural land plots (shares) have been unable to legally exercise their right to sell the plots they own, which forced them to lease these plots for a pittance or to look for loopholes in the legislation to sell them, which clearly reduced the value of the plots.

On the one hand, the legislator has provided an opportunity for individuals who wish to sell agricultural land plots they own, whilst on the other hand, it has restricted the circle of persons who may become owners of such plots.

In particular, Ukrainian citizens, amongst others, may acquire ownership of agricultural land plots.

Ownership of agricultural land plots may also be acquired by banks in cases provided for by law.

The law limits the area of agricultural land over which a single person may acquire ownership rights; in particular, as of 1 January 2024, the total area of agricultural land owned by a Ukrainian citizen may not exceed one hundred hectares.

It is worth noting that, as the sale of land shares was prohibited for a long time, most people who held such shares transferred them to long-term lease. Therefore, particular attention should be paid to the sale of leased land plots.

In practice, as before, the tenant has the right of first refusal to purchase the land plot; however, the legislator has slightly amended the sale procedure where a registered lease agreement exists.

Specifically, there are two ways to sell a land plot: at auction (land tender) and by concluding a contract of sale.

The right of first refusal to purchase agricultural land is exercised provided that the tenant (the holder of the right of first refusal) pays the price at which the land is being sold and also fulfils all other conditions of the sale and purchase agreement set by the seller.

Where a right of first refusal to purchase an agricultural land plot exists, the holder of such right is obliged to register their intention to sell the land plot in the State Register of Rights to Immovable Property no later than two months prior to the date of conclusion of the contract of sale for the land plot.

If the sale of an agricultural land plot is not conducted through a land auction, an application for state registration of such an intention must be submitted to a notary no later than two months before the date of conclusion of the contract of sale for the land plot.

The tenant’s rights to a right of first refusal to purchase the agricultural land are established by obtaining information from the State Land Cadastre and the State Register of Rights to Real Estate.

A tenant wishing to exercise such a right of first refusal is obliged to notify the notary of this in the manner prescribed by law.

Failure to comply with this sales procedure may result, at the very least, in a claim by the tenant for the transfer to them of the buyer’s rights and obligations (including the assumption of all associated risks).

The specialists at our law firm have significant practical experience in matters relating to the sale of leased land plots and can assist you both in drawing up a step-by-step action plan and in providing full support for the relevant agreements.

Furthermore, we have a successful track record in terminating lease agreements with tenants who abuse their rights