real estate

Proprietary rights for proper citizens

01.09.2010 | Text: Yelena Yevgrafova

The system of registration of ownership rights to real estate and land is planned for a complete overhaul within half a year

After June 1, no technical inventory bureau (TIB) in Ukraine will issue technical specification certificates. Instead, owners of property must obtain an excerpt from an Electronic Registry of Ownership Rights. This document will also be issued by the TIB, but now on a Ministry of Justice letterhead.

What other innovations in the registration of property and land rights is the government preparing for us?


Land a deal and fix the rights

Cancellation of the specification certificates is only the tip of the iceberg. In February, law No. 1878-VI on real estate was adopted. To the extent to which its provisions will work, the uncustomary word combination registration of rights will become part of Ukrainians vernacular. Essentially, up until now in Ukraine there was the notion of an agreement registration, meaning that as soon as a deal was made and the notary public registered an agreement, an apartment or house became your personal property.

According to the new law, the buyer becomes the legal owner of the property only after registration of his or her ownership rights with the State Registry.

Officially, other requirements of the new law have taken effect. For example, from now on a person must not only register ownership rights to real estate and land, but also rights to rent out property and land plots, mortgage loans, asset management and much more.

After closing a deal, one must go to the TIB with documents (in the case of real estate), to land resource bodies (in the case of land plots) or the regional office of the Justice Ministry (in case a mortgage must be registered) in order to legalize (i.e. register) their rights.

Be that as it may, these and other novelties will be fully introduced in 2012. For now, only specification certificates have been relegated to the dustbin of history. Starting in 2012 all rights to property and land will have to be registered in local administrations of the Ministry of Justice and the registration of agreements will be cancelled outright and for good.

No registration, no rights

This is all being done in order to simplify and speed up the procedures of registration of real estate. Starting from 2012, buyers of homes and the land it is on will finally be able to register their property rights in one organization, meaning through a single window.

Another novelty is that owners of real estate or land will have additional expenses. For example, they will have to pay a fee for entering data about their real estate in the new register or shell out to register their rights to rent out an apartment.

At this point, it is not known how the Ministry of Justice, the TIB and the State Land Committee will work with one another in the future. The fact is that the TIB preserves its second function of taking a technical inventory, while the State Land Committee will continue to do a legal appraisal of land and other operations.

It turns out that in order to sell an apartment or home the owner must get information not only from the State Registry of Rights, but also from the TIB. If a department of the Ministry of Justice does not require the seller to produce a document from the TIB on the current condition of the object up for sale, then the buyer risks buying a home with an illegal annex.

Now, one must register new rights, for example to rent out property. But in this case the TIB is not likely to be of any assistance as such a procedure simply does not exist. However, if a homeowner has no registration, they have not rights. Clearly, unprincipled lessors can take advantage of this by filing a claim to a court for eviction, even if the rental agreement is in order.

Other provisions of the law also open loopholes for swindlers. For instance, the time between signing an agreement and being granted rights by the State Registry could take up to three weeks (the law sets a limit of 14 working days) over which time the buyer is still not considered the owner of the real estate. If a dishonest seller concludes two such agreements in one way day, clearly the buyer that first submits documents for registration will become the owner of the property and the second one contender will be left hanging.

What can be done?

In order to ensure security of property in the transition period up until 2012, one must stay up on the latest innovations in registration procedures. One should pay particular attention to rental and other new rights. As long as the corresponding procedures are not in place and nothing is changed, sooner or later they will appear and take effect, a lawyer at Magister & Partners Ivan Trofimenko noted.

Starting June 1 one must make sure that certification of property ownership rights issued by the TIB should be on special letterhead, a lawyer at Tarasov & Partners Oleksandr Markov reminded.

Besides, now such documents must contain not only a signature of the registrar and the head of the TIB, but also their given name, patronymic and surname. Confirmation of registration of ownership rights and a certificate thereto should be printed on letterhead of the Ministry of Justice, he stressed.

Printable version
comments powered by Disqus