Comment of associates of agrarian practice of OMP on request from the portal Latifundist.com
- Please share your opinion on the small number of land purchase and sale agreements. Have you felt the excitement among those who want to sell their land?
According to the official statistics of the Ministry of Agrarian Policy and Food of Ukraine, as of July 19, 1107 land agreements were registered. On average, this is almost 80 transactions every (working) day since the launch of the land market. It is obvious that for such a large agrarian country it is difficult to classify as “excitement”.
To our deep conviction, we are currently observing, mainly, the execution of those transactions that have already been agreed during the moratorium. It is no secret that farmers had to resort to certain legal constructions to circumvent the moratorium (for example, the conclusion of excessively long contracts of use). Such “deferred investments” are now being re-registered into full-fledged sales.
The vast majority of market players at the moment are just watching the practice that is being formed and choose their own strategy accordingly. At the same time, we see cautious optimism about the possibility of investing in land by not only agricultural companies but also private investors (as rentiers).
- Why were notaries not ready to opening of the market? Why did not they take care of access to land registers?
According to the State Geocadastre, as of July 1, 2021 (official start of the land market in Ukraine), 879 out of about 6,500 notaries in Ukraine had access to the State Land Cadastre.
Inaction of notaries in this direction is explained by the elementary lack of necessity. Of course, notaries periodically had to obtain information contained in the Land Cadastre. However, in such cases, the notary simply submitted a written request or transferred the obligation to obtain such information to the applicant. Often the receipt of the necessary information was delayed for weeks.
We suspect that this would have continued if the legislature had not explicitly required notaries to verify information directly.
- How was this problem solved?
It is difficult to call it a problem. Rather, a coincidence. Thousands of notaries simultaneously (on the day or the day before) applied for access. In this case, each application has a list of documents and the order of consideration. The system could not withstand such a flow, the queue appeared.
Nevertheless, the Ministry of Agrarian Policy and Food of Ukraine is currently reporting on 3,804 notaries whose applications for access to the State Land Cadastre have been granted. And this is more than half of the total number of notaries.
- Who was the initiator of the idea of simplified access to registers?
“Simplified” access is an objective necessity caused by new responsibilities for notaries. In particular, notaries are obliged to check information about land plots when drawing up a transaction in relation to it (including the information contained in the State Land Cadastre).
Obviously, working according to the old procedures, which we mentioned in part in question 2, would be ineffective, and each agreement would be delayed for weeks.
- What is the current state of affairs with access to the State Land Cadastre?
According to the information published by the Ministry of Agrarian Policy and Food of Ukraine, the work of notaries with the Land Cadastre is carried out “on a regular basis”. Similar information was also confirmed to us by friendly notaries in Kyiv, Cherkasy and Kirovohrad regions.
- How do you think the situation will develop further?
The situation will develop in each region separately. In other words, the market will be considered a set of features and conditions characteristic of a particular climatic (or more likely “agro-technical”) zone, and not for the region or district. This is how we propose to analyze the situation.
Today we see no reason for rapid “acceleration” of the market. After all, even those transactions that are taking place now and will take place by the end of the year are in fact “deferred demand” or partial “whitening” of what has been happening for the last 20 years. The real number of people wishing to sell plots today does not exceed 0.5% of the land bank of the weighted average operator (tenant). It is unlikely that by the end of the year the number of people willing to sell at the current price will increase significantly. Making longer predictions is even more ungrateful and risky.
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We hope you find this information useful. If you need advice or a detailed explanation of the above material, please contact:
Andriy Martyniuk, Director of Business Development of Law offices of OMP
+38 098 244 6262; +380 44 391 30 01 a.martyniuk@omp.ua
Halyna Brun, Marketing Director of Law offices of OMP
+380 95 497 66 05; +380 44 391 30 01 g.brun@omp.ua