Privatization of land under a residential building

Need to privatize the land under the house? Call 050 052 44 04 and the land lawyers of Novakovskaya & Partners JSC will provide you with legal assistance in land privatization.

Privatization of a land plot is its transfer from the ownership of the state or a territorial community to the ownership of individuals, and in some cases, legal entities.

5 procedures for land privatization are known in legislation and practice:

1. Procedure for the privatization of a land plot from reserve lands.

2. The procedure for the privatization of a land plot used by citizens.

3. Privatization of a land plot as part of a privatized real estate or integral property complex.

4. Privatization of land plots by legal entities.

An extremely topical issue is the privatization of a land plot under a residential building. Often, the testators received land plots for use back in Soviet times, at the same time they built a house. After the death of the testator, the inheritance is opened to the house. The heirs, having received the right of ownership of the house by way of inheritance, must solve the problem associated with the registration of the land plot in ownership.

Legislation

From the point of view of the current legislation and judicial practice, problems in general should not have arisen. According to part 1 of Article 377 of the Civil Code of Ukraine dated January 16, 2003 No. 435-IV (hereinafter - the Civil Code) “[to] a person who has acquired the right of ownership of a residential building (except for an apartment building), a building or a structure, passes the right of ownership, the right to use on the land plot on which they are located, without changing its intended purpose in the amount and on the conditions established for the previous landowner (land user). " A similar rule is enshrined in the first sentence of Part 1 of Article 120 of the Land Code of Ukraine dated October 25, 2001 No. 2768-III (hereinafter - ZK), according to which “[in] the case of acquiring ownership of a residential building, building or structure owned , the use of another person, the right of ownership, the right to use the land plot on which these objects are located is terminated. A person who has acquired ownership of a residential house, building or structure located on a land plot owned by another person shall transfer the ownership right to the land plot or part of it, on which they are located, without changing its intended purpose. " The words "ownership is transferred" in both norms indicate an automatic transfer, that is, whoever owns the building becomes the owner of the land.

Supreme Court practice

The Grand Chamber of the Supreme Court drew special attention to the “automaticity” of the transfer of the right to a land plot in the event of a transfer of ownership to the land plot located on it. In clauses 8.4. and 8.5. Resolutions of the Grand Chamber of the Supreme Court of 04.12.2018 in case No. 910/18560/16 noted the following:

"8.4. Article 120 of the LC of Ukraine (as amended by the Law of Ukraine No. 997-V of April 27, 2007) again secured the automatic transfer of the right to a land plot upon alienation of a building or structure. The current version of Article 120 of the LC of Ukraine (as amended by the Law of Ukraine No. 1702-VI of November 5, 2009) also provides for the automatic transfer of the right to a land plot upon alienation of a building or structure, and these norms are imperative.

8.5. Thus, the current land and civil legislation imperatively provides for the transfer of the right to a land plot in the event of acquiring ownership of the property, reflects the principle of the unity of the legal fate of the land plot and the building or structure located on it, which, although not directly enshrined in general terms in the law , nevertheless, it finds its expression in the rules of Article 120 of the LC of Ukraine, Article 377 of the Civil Code of Ukraine, and other provisions of the legislation ”.

The opinion on the automatic transfer of ownership of a land plot upon transfer of ownership of a building and structure was also expressed in other decisions of the Supreme Court. In particular, in the ruling of the Supreme Court as part of the panel of judges of the First Court Chamber of the Civil Court of Cassation dated 13.05.2020 in case No. 700/670/16-c, the Supreme Court noted that “... With the rule of Article 125 of the LC of Ukraine, it should be assumed that in the event of transfer of ownership of the property in accordance with the procedure established by law, the ownership of the land plot for the acquirer of real estate arises simultaneously with the emergence of ownership of the objects erected on the land plot. This rule also applies to cases where the right to a land plot was not registered simultaneously with the right to real estate, but the land plot had previously acquired the characteristics of an object of ownership. " This legal position was also expressed by the Supreme Court in decisions, in particular in the decision of the Supreme Court as part of the panel of judges of the Second Judicial Chamber of the Civil Court of Cassation dated 07.08.2019 in case No. 303/1734/15-c; Of the Supreme Court as part of the panel of judges of the Second Judicial Chamber of the Civil Court of Cassation dated 07.11.2019 in case No. 720/1428/16-c; The Supreme Court as part of the panel of judges of the Second Judicial Chamber of the Civil Court of Cassation dated 12.06.2019 in case No. 683/125/16-c; by the decision of the Supreme Court as part of the panel of judges of the Second Judicial Chamber of the Civil Court of Cassation dated 03.07.2019 in case No. 700/670/16-s.

The foregoing testifies to the fact that the owner of the building has the right of ownership of the land plot automatically. Registration of such a right in the state register of rights to real estate is only a confirmation and guarantee of ownership of the land plot, which has already arisen. The automatic emergence of ownership of a land plot in the event of the acquisition of ownership of a building or structure makes the privatization procedure unnecessary for acquiring ownership of a land plot.

Law enforcement practice of executive authorities, local governments, notaries

Despite the fact that the legislation and practice of the Supreme Court leaves no doubt about the automatic transfer of ownership of a land plot when ownership of a building or structure is transferred, state registrars, notaries and civil servants of executive authorities tend to interpret the norms of current legislation in this way. In fact, this approach is used in practice. The emergence of ownership of a building or structure located on a land plot does not give ownership of this land plot, but only the right to take part in the procedure for obtaining this land plot into ownership. In other words, the acquisition of ownership of a building or structure located on a land plot entitles the owner of this building or structure to the privatization procedure of this land plot.

The argument in favor of such an interpretation of the provisions of Article 120 of the LC and Article 377 of the Civil Code is, allegedly, the actual impossibility of transferring the land plot to the ownership of the owner of a building or structure without a privatization procedure. It is believed that even if the land plot was on the right of permanent use with the former owner of the building or structure, it cannot be transferred to the ownership of the current owner of the building or structure due to the need to clarify its limits. Clarification of the boundaries also includes establishing the coordinates of the turning points of the land plot. Without such an establishment, there will be uncertainty as to where the border between the two parcels lies. In this regard, in practice, there is such a procedure for the transfer of ownership of a land plot to the owner of a building or structure located on it.

1. The first stage is the order of technical documentation for land management regarding the establishment (restoration) of the boundaries of the land plot in kind (on the ground). The following documentation is developed:

a. legal entities with the necessary technical and technological support and in which a certified land surveyor works at the main place of work, who is responsible for the quality of land management work;

b. individual entrepreneurs who have the necessary technical and technological support and are certified land surveyors responsible for the quality of land management work.

The cost of developing technical documentation on land management regarding the establishment (restoration) of the boundaries of a land plot in nature (on the ground) is determined by an agreement between the customer (citizen) and the developer of such documentation and is on average 30,000 hryvnia (the cost also depends on the area, location and other characteristics land plot).

2. Entering data on the land plot in the state land cadastre.

3. A citizen applies for the transfer of ownership of a land plot to the relevant executive authority or local self-government body, transfers state or communal land plots to ownership in accordance with the powers determined by Article 122 of the LC.

Such a statement is made in any form, the following documents should be attached to it:

a. technical documentation on land management regarding the establishment (restoration) of the boundaries of a land plot in kind (on the ground);

b. extract from the state land registry);

c. passport or power of attorney (if the application is submitted by a representative of the owner of the building or structure)

4. An appeal to the state registrar with an application for registration of the real right to real estate. By virtue of part 2 of article 3 of the Law of Ukraine "On state registration of rights to real estate and their encumbrances" dated 01.07.2004 No. 1952-IV, it is considered that ownership of a land plot arises after state registration of this right in the state register of rights to real estate.

Assessment of the law enforcement practice of executive authorities, local governments, notaries and conclusions

In our opinion, the practice of executive authorities, local self-government bodies, notaries is significantly different from what is enshrined in Article 120 of the LC and 377 of the Civil Code, if the latter are interpreted in the context of the legislator's goal. The goal of the legislator was, without a doubt, to ensure the unity of the legal fate of the building and the land on which it is located. Such unity can be ensured only on condition that Article 120 of the LC and Article 377 of the Civil Code are interpreted as such, which provide for the automatic transfer of ownership of a land plot upon transfer of ownership of a building or structure located on it. The interpretation of these provisions as giving only the right to the privatization procedure does not ensure the unity of the legal fate of the land plot and the building or structure located on it, and therefore, such an interpretation contradicts the goal of adopting floor 120 of the LC and Article 377 of the Civil Code, and therefore cannot be perceived.

The practical conclusion from the situation outlined above is the conclusion that it is necessary to recognize the ownership of the land plot of the owner of the building or structure located on it in court. In this case, two options for claims are possible:

1. Applying to a court of general jurisdiction with a claim for the recognition of ownership. The defendant in such a claim will be the relevant executive authority or local self-government body, transferring state or communal land plots into ownership in accordance with the powers determined by Article 122 of the LC. After the claim is satisfied, the basis for registering ownership of the land plot will be a court decision. In the lawsuit itself, two claims can be formulated: 1) recognize the ownership right 2) oblige the state registration service of the relevant regional state administration to register the corresponding ownership right.

2. Apply for registration of ownership of the land plot to the state registrar, and after his refusal to appeal against the refusal in court with reference to the above-described practice of the Supreme Court.

Of great practical importance is going to court with these two claims when the owner of a building or structure has already exhausted his right to privatize a land plot with this type of designated purpose and, by virtue of the provisions of part 4 of Article 116 of the LC, cannot privatize such a land plot. In this case, an alternative to going to court will be the purchase of the corresponding land plot.

When considering the possibility of going to court, it should be borne in mind that the trial usually lasts a long time and can reach several years. At the same time, even having won the case, the owner of the building will still have to order the development of technical documentation for land management regarding the establishment (restoration) of the boundaries of the land plot in kind (on the ground), because without this information about the land plot will not be entered into the state land cadastre, and therefore, the cadastral number will not be assigned to the land plot. The marriage of the cadastral number can be a significant obstacle for the further alienation of the house, because according to part 6 of Article 120 of the Law connection with the acquisition of ownership of these objects, except for objects of state ownership, subject to sale through privatization. " The legal literature correctly stated that the cadastral number is neither an essential condition of the contract, nor in general a condition of the contract, however, the lack of a cadastral number is a reason for the refusal of notaries to certify such an agreement, and even if such an agreement is certified, then there will be a risk of invalidation of such an agreement as such, the content of which is contrary to the LC.

In connection with the above, in our opinion, going through the privatization procedure is a simple way. Litigation is a really practical alternative only for persons who have exercised their right to privatize or for persons who are not legally entitled to privatize land (eg foreigners).

Law firm "Novakovskaya & Partners" is ready to provide you with legal assistance on the issues that are described in this article.