Attorney
Lawyer with many years of experience in the field of real estate and land law. Support for construction, registration of land plots, obtaining permitted documentation and protection of property rights. Also has successful cases of labor law and mobbing at work.
Privatization of municipal property
The process of privatization of municipal property involves the transfer of ownership of the specified property to the private ownership of both individuals and legal entities. In this article, we will consider the features and nuances that need to be taken into account in the process of privatization of municipal property.
Legislative basis of the issue
In order to significantly simplify and accelerate privatization processes, in July 2022, the Law of Ukraine “On Amendments to Certain Legislative Acts of Ukraine on Promoting the Processes of Relocation of Enterprises under Martial Law and Economic Recovery of the State” No. 2468-IX was adopted. This document allowed amendments to the previous version of the Law “On Privatization of State and Communal Property” and a number of other legislative acts related to the property privatization procedure.
At the legislative level, it is clearly established that the process of transferring municipal property is carried out by local governments (city, village councils, etc.). The Law also defines the sequence of the procedure for transferring municipal property to private property.
The initiators of the privatization process may be:
- Authorized municipal property management bodies.
- Buyers.
- Privatization bodies.
Privatization can be carried out on the basis of one of the methods: sale of municipal property at auction or redemption of objects subject to the privatization process. These two methods can be implemented:
- With additional conditions/without conditions.
- By the method of gradual reduction of the price of the object.
- By the method of analysis of price offers.
Please note: the following cannot be buyers of municipal property:
- Local/state authorities.
- State enterprises, economic associations owned by the state.
- Employees of state bodies responsible for privatization.
- Buyers registered in offshore zones with an opaque ownership structure.
- Legal entities/individuals, representatives of states that are recognized as aggressors or against which sanctions have been applied.
Changes in the procedure for concluding a contract of sale of municipal property
Concluding a contract of sale is possible after the winner of the electronic auction has paid the entire cost of the municipal property object. The terms are 25 and 35 business days (for small and large privatization objects, respectively). If the winner of the auction announces the need to begin preparing documents for notarial registration, a preliminary contract of sale may be concluded. Please note: all costs are borne by the winner. In the future, this document is approved by the State Property Fund of Ukraine.
Control over whether all privatization conditions are met is carried out directly by the privatization body that concluded the specified contract. The term of execution is no more than 5 years. Special control is established for objects whose privatization had its own specifics.
Control is carried out on a planned or unplanned basis. An option with unscheduled control is possible based on the owner’s or government authorities’ requests by:
- Conducting an inspection at the privatization facility.
- Analysis of documents received from the competent authorities or the owner.
- The result of the inspection is the preparation of an Act.
If during the inspection it was established that all the terms of the purchase and sale agreement have been fully fulfilled, an appropriate act is drawn up. If there are violations, an act of the current inspection is drawn up.
In case of violations of the terms of the purchase and sale agreement, administrative liability arises (clause 5 of Article 29 of the Law of Ukraine “On Privatization of State and Communal Property”). At the initial stage, the privatization authority makes efforts to resolve the dispute without going to court. If an agreement cannot be reached at the pre-trial stage, the following sanctions may be applied to the buyer:
- Fine and penalty.
- Termination of the agreement.
- Recognition of the agreement as invalid.
- Return of the real estate object to municipal ownership.
All funds received from the buyer as a result of the consideration of the case in court are transferred to the State Budget of Ukraine.
It is quite difficult to independently understand all the intricacies of the process of privatization of municipal property. It is better to entrust this matter to professionals. Real estate specialists of our law firm Prykhodko and Partners will analyze the situation and identify possible risks in the issue of purchasing a specific object of municipal property. We guarantee to obtain the desired result for each client. Our real estate lawyers have extensive practical experience in privatization of objects of various categories and types of property. We will save you from bureaucratic red tape and the risk of buying a pig in a poke.
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In which regions of Ukraine do you work?
The department of real estate and land law, as a rule, works in Kyiv and the Kyiv region.
- We provide our services in all regions of the Kyiv region, for example:
- Bilotserkiv district (towns of Skvira, Tarasha, Bila Tserkva, Uzyn, Tetiiv).
- Boryspil district (the cities of Boryspil, Pereyaslav, Yagotyn).
- Brovary district (the cities of Brovary, Berezan).
- Buchansky district (towns of Bucha, Irpin, Vyshneve).
- Vyshhorod district (the cities of Vyshhorod, Slavutych).
- Obukhiv district (towns of Obukhiv, Boguslav,
- Vasylkiv, Kagarlyk, Myronivka, Rzhyshchiv, Ukrainka).
- Fastiv district (the cities of Fastiv, Boyarka).
It is worth noting that on some issues (services) we work throughout Ukraine, contact and clarify information by phone!
Do you provide consultations online or over the phone?
Yes! If you do not have the opportunity to come to the office in Kyiv, then you can pay and receive a consultation by phone or in one of the applications for conducting calls/conferences.
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