Ukraine: auction procedure for leases of non-agricultural land

From January 1, 2008, plots of [non-agricultural] land can only be leased by means of an auction procedure where the lease is granted to the highest bidder.

This procedure has (so far) only one exception: the owner of a building situated on a land plot, which is state or communally owned, can lease the land plot without having to submit to the auction procedure.

The enactment of the auction procedure resulted in many land allocation projects around Ukraine being temporarily frozen, because the local authority claims that it does not yet have the legal documents needed to conduct an auction procedure.

However, documents regulating the transfer of land lease rights by public auction have been in use for quite some time in each region.

The Ukrainian government is considering the best way to regulate the land lease auctions. The Prime Minister has said that the government will put forward a recommended model set of regulations but that local authorities are free to develop their own. He said that each region (24 oblasts and Crimea) can take its own needs into account when drawing up terms and conditions for the auctions.

Hopefully, the government's model document will bring some much-needed transparency to the process of transferring state-owned land into private use.