Lease agreement for a house and a plot of land

Article 181 of the Civil Code of Ukraine clearly states that real estate includes plots of land, as well as objects located on it. An actual issue today is the conclusion of a lease agreement for a house and a plot of land. In this article, we will define its features.

Lease agreement: what to consider?

The lease agreement is based on mutual obligations between the lessee and the lessor. In particular, this concerns the transfer to the lessee of a plot of land for use for a clearly defined term for a specific payment in compliance with the norms of current Ukrainian legislation. If we are talking about the lease of a capital structure (for example, a house), this is additionally prescribed in the contract.

A common feature of all contracts related to real estate is their conclusion in writing. In this case, the written contract is considered to be the contract that was signed thanks to the use of an electronic signature or information systems.

In some cases, the lease agreement for a house and a plot of land is executed on the basis of a notarial certificate. This especially applies to cases where the contract is concluded for a period of three or more years. Article 14 of the Law of Ukraine “On Land Leasing” clearly states that the owner of a plot of land can establish a requirement for mandatory notarization of the lease agreement. Also, this requirement belongs to encumbrance of property rights on a plot of land and is subject to mandatory state registration in a specified manner.

A similar situation arose with the need for state registration of transactions. If a building lease agreement is concluded, it must be registered if it is concluded for a period of more than 3 years.

Land lease agreements are registered by special state registrars. Relevant information is entered in the State Register. Currently, under martial law, state registration is carried out by local military administrations. Information about the lease is entered in the Book of Registration of Land Tenures. These books are issued both in paper and electronic form.

Update of the Model Land Lease Agreement

Changes to the Model Land Lease Agreement were introduced by Cabinet Resolution No. 235 dated March 1, 2024. The changes in this Resolution relate, in particular, to the term of operation of the contract. For example, it has been established that when the state plots of land are leased, the term of the contract is half a century.

The requirements related to preparation for real estate auctions also apply to subleasing.

Important terms of the agreement are the subject of the lease, the term of the agreement, as well as the rent. Also, the Law of Ukraine “On Land Leasing” specifies the essential terms of the contract, in particular, the date of its conclusion. If the contract is concluded with respect to the building, the parties to it receive complete freedom.

In the process of concluding a lease agreement, we recommend that you specify the following information:

• Subject and object of the contract.

This item provides a description of the land plot that is leased. The following information is also noted: its location, purpose, availability of real estate, etc.

It is also very important that the contract clearly states the value of the plot of land. The amount of rent will depend on it in the future.

• Purpose of use.

The purpose of use must fully correspond to the purpose of the land plot. In most cases, this is the management of commoditized agriculture.

• Fixed rent.

The minimum rent is no more than 3% of the value of the land share. This guarantee is minimal, and it is specified in the Decree of the President of Ukraine. Every year, the monetary value is indexed.

• Term of validity of the agreement.

As a rule, the contract specifies its validity period. In the process of leasing land, the term of the contract is at least 7 years.

• Determination of the rights and obligations of the parties.

During the validity of the agreement, it is forbidden to change the purpose of the land plot. It is forbidden to allow deterioration of the fertility and ecological potential of the plot of land. The contract also establishes the responsibility of the parties.

There is also a separate category of contract terms, where the terms, form and payment procedure will be specified. In the future, this will greatly simplify your life.

Important: when concluding a lease agreement for the first time, it should first be registered in the State Register of Property Rights. Our real estate lawyers provide a full range of services related to the conclusion of a lease agreement for real estate and land. We work exclusively for the result and ensuring all the interests of our clients. We are trusted by thousands of individuals and legal entities.

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