The event was intended to discuss the issues of industrial real estate in Ukraine and, at the same time, to pay attention to both positive and negative trends in that sphere. Maxim Polishkevych, lawyer, Managing Partner of the Rezultat law firm was also involved in discussing the problems and prospects of industrial development and construction.

At the opening of the event there spoke Ihor Nikonov, President of KAN Development, Rostyslav Korobka, Vice-President of the Chamber of Commerce and Industry of Ukraine, Burak Pekhlivan, Head of the Turkish and Ukrainian Businessmen Association, Andrii Melnyk, representative of the Ministry of Economic Development and Trade of Ukraine.

The forum had several thematic panels for discussion. During the first one, the experts presented successful cases of industrial real estate

In particular, the speaker of that section, Nataliia Kocherhina, partner, head of DLA Piper real estate practice, prepared the analytics for the land market and industrial real estate development in Ukraine. Nataliia talked about the development of the country’s industrial and infrastructural potential, and also drew attention to the positive factors of that economy segment’s development. Thus, one of such positive examples, according to DLA Piper, was that since 2015, about 60 plants had been launched in Ukraine, more than 30 power plants on renewable energy sources had been connected, in 2017, elevators with a total capacity of more than 400 thousand tons had been put into operation.

The second section was intended to discuss the topic of construction and infrastructure projects. The speakers shared interesting cases and positive changes in the country. For example, Andrii Konechenkov, chairman of the Ukrainian Wind Energy Association, revealed the advantages and development prospects of the Ukrainian wind energy sector. Wind energy ranks 2nd in the structure of European energy resources and accounts for 16.7% of the total. In Ukraine, the share of energy produced from renewable sources is only 1.4%.

Andrii Antonenko, head of the UVT Group, and Serhii Mishok, Deputy Mayor of Zaporizhzhya, presented a case for the construction of a new airport terminal. The passenger traffic of Zaporizhzhya Airport had been increasing year by year and made 350 thousand people in 2017. The number of flights and airlines had also been growing. The strategic goal of the new project was to create a high-tech and progressive airport, increasing the region’s investment attractiveness.

At the end of the sessions, the forum participants continued the informal discussion on the topic of industrial development and construction in Ukraine.

Managing Partner of the Rezultat law firm Maxim Polishkevych notes that such events help to focus on the country’s development trends, while the cases discussed at such forums can be an interesting example for Cherkasy and Cherkasy district.

“The industrial construction market and its legislative regulation are constantly changing, therefore, such events are extremely important for maintaining communication between market participants. The forum brought together for a dialogue representatives of authorities, investors, and developers, which explained, by means of an example, the importance of development of industrial parks, alternative energy, and so on. In particular, the Nibulon company’s presentation became an excellent example of the agrarian sector and industry symbiosis.

In Cherkasy district, there have also been successfully implemented several industrial projects, while some are in the process of implementation. We are happy to accompany such projects. And events like this allow us to take on the best practices that we can apply for the benefit of our clients,” .

Maxim Polishkevych observes

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CHECK WHO THE LAND OWNER IS

First, check the land plot title documents, namely, whether there is the right to use the land plot on which the construction of an apartment building is carried out. It may be the decision of Cherkasy City Council on leasing the land plot, a sublease agreement, an act for right of permanent land use, and so on. Target purpose of the land plot for residential and public construction. For townhouses, the intended purpose of the land may be individual cottage construction. These documents must be provided for inspection by the housing society as a developer. Without documents certifying the right to use a land plot, obtaining permits for construction and, in fact, construction itself is illegal.

PAY ATTENTION TO TOWN-PLANNING CONDITIONS AND RESTRICTIONS

The following documents one needs to check are town-planning conditions and land plot development restrictions, which are provided to the developer by the Department of Architecture and Town-Planning of Cherkasy City Council. Town-planning conditions and restrictions are a document containing a complex of planning and architectural requirements for design and construction concerning the height and density of land plot development, setbacks of buildings and structures from the frontage lines, the boundaries of the land plot, its infrastructure development and landscaping, other requirements for objects construction, established by law.

A DECLARATION ON THE BEGINNING OF CONSTRUCTION WORKS OR A CONSTRUCTION PERMIT IS A MAJOR DOCUMENT WHICH GIVES THE RIGHT TO BUILD

A declaration on the beginning of construction works or a construction permit is the main document to be checked when signing a partnership agreement. After all, construction of an apartment building can only begin upon availability of such a document. The construction permit, including the declaration on the beginning of construction works, must be registered in the State Architectural and Construction Inspectorate of Ukraine. They can be easily found by the declaration number. This innovation is only a year old; earlier, the developer filed documents in print format and received them already with the registration stamp and the assigned number. Now, everything is in the electronic register and at the time of registration of the newly purchased apartment, the registrar of ownership rights to immovable property checks whether the new building permitting documents have been entered in this register.

PAY ATTENTION TO THE LEASE EXPIRY DATE

Reviewing the land plot documents, pay attention to the developer’s land lease/sublease expiry date (after the construction of a multistoried building, that land should pass into the use or ownership of the home owners’ association (HOA) through the City Council decision).

CONSIDER WHETHER THE DEVELOPER HAS PROVIDED FOR PENALTIES FOR HIMSELF/HERSELF IF HE/SHE FAILS TO MEET THE BUILDING COMPLETION DEADLINE

Usually in Cherkasy, developers do not provide for penalties for themselves in case they hand over the building for commissioning later than it was defined by the partnership agreement. A positive example is the service cooperative Forest 1CH housing society, which provided for its shareholders in the agreement the possibility of obtaining penalties at a rate of 500 hryvnias for each month of delay of handing over the building for commissioning. The building was handed over for commissioning later, but the Forest 1CH housing society fulfilled its obligations to pay a full penalty to its shareholders.

PROPOSE THE DEVELOPER YOUR CONDITIONS

A partnership agreement, an investment agreement, and/or any other agreement offered by housing societies and under which you will establish ownership of an apartment are similar and generally do not protect the shareholders in the case disputes occur. Few people know that this agreement is bilateral, and therefore you as a shareholder can offer your version of the agreement and/or edit its certain clauses. It’s a different story, that sometimes it’s easier for the developer to find a more tolerant shareholder than to rewrite an agreement specifically for you.

CHECK NOY ONLY THE DEVELOPER BUT THE HOUSING SOCIETY AS WELL

Remember that in the case of the developer’s bankruptcy or other force majeures, you’ll recover losses not from the individual or legal entity, but from the housing society, as it is the mediator, you enter into an agreement with and pay the contributions to. It is worth checking where this housing society is registered, who its founder is (an individual or a legal entity), which share capital it has. Both the developer and the housing society can be checked against the Unified State Register of Legal Entities, Individual Entrepreneurs, and Public Associations and the Unified State Register of Court Decisions. You can also look for feedback on this developer (if he/she has already built in other cities) and see if he/she is a case suspect.

HANDING OVER FOR COMMISSIONING DOES NOT MEAN MOVING IN

The biggest problem with buying a new-build housing is that shareholders cannot immediately start repairs in their new apartments, even if the house has been handed over on time. For these houses are often handed over without communications: gas, water, electricity. Thus, for example, some new builds in Cherkasy, ​​which had already been handed over for commissioning, were waiting for hooking up to the gas supply system for more than a year. It is also necessary that the city take on the balance the new build’s water supply pipelines and its sewerage system. Therefore, before signing the agreement, you should be interested not only in the house commissioning, but also in the date of its connection to all utilities. So that, after the date discussed, the apartment owner could quietly begin to repair and use the apartment for its intended purpose.

INQUIRE WHO THE COMPOUND OWNER IS

The package of documents for townhouses is somewhat different, but the main issue is also the land. For the future shareholder, it is important to find out who owns the land under or around the house. Since developers often say that the compound behind the townhouse is sold with it and the future owner will use it at his/her own discretion. For example, he/she can build a garage there. However, in most cases, the housing society retains its right to use the land as one array without dividing it into land plots under each townhouse and assigning them a separate cadastral number with registration of the townhouse owners’ property rights.

CHEAPEST IS THE DEAREST

In theory, the buyer can try to independently deal with the registers and all agreement pitfalls, however due to the large number of nuances in this case it’s cheaper to hire a qualified lawyer for an hour or two, than to command the services of that very lawyer for court battles. A specialist will be able to ask the housing society representatives the right questions, check the developer’s permits, examine the agreement for compliance with current legislation and oral deals between a shareholder and a housing society, check out the society, the developer and the related firms against registers.

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That event was of interest to leading real estate experts, investors, bankers, and developers from all over the world. The Forum participants had an opportunity to get acquainted with the best projects and new investment opportunities of such countries as Kazakhstan, Georgia, Azerbaijan, Belarus, Ukraine, and Moldova. In total, more than 200 industry professionals from 12 countries took part in the Forum.

The purpose of the Forum co-hosting with the representatives of different states was primarily to establish a dialogue between foreign specialists and investors and to attract their attention to the Ukrainian real estate market. The organizers noted that every year, the number of foreign visitors during the EE Real Estate Forum was growing significantly. So, this year, Turkish investors have shown considerable activity.

Within the four discussion panels, the experts discussed investment opportunities and potential of the participating countries, the problems of urban and social project development, trends in each of the segments of the real estate market, legal aspects and relations with state authorities during work with the investor, residential real estate market trends, etc.

“The importance of such large-scale projects and forums cannot be overestimated, as the format allows not only to update the information about the features of the modern real estate market, but also to join in discussing the most pressing problems in this area.”

Maxim Polishkevych, Managing Partner of the Rezultat law firm, which became a member of the URE Club in 2017, positively responded to the event

In addition, a pleasant surprise, according to Maxim Polishkevych, was the participation in the event of the Deputy Minister of Regional Development, Construction, and Housing and Communal Services of Ukraine Lev Partskhaladze, who spoke at the opening of the Forum with a welcome word. Given the urgency of the issues raised during the EE Real Estate Forum 2017, one can confidently say that next year’s event is quite able to attract a greater number of participants which is definitely positive in the context of the main goal of the URE Club activities: to develop the real estate market, improve its investment attractiveness and perception by the international business community

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A Modern Approach to Increasing Sales of Real Estate

The main partner of the event was Zenvision, representatives of which presented a solution dealing with interactive visualization of real estate objects. Such hardware can enhance the functionality and effectiveness of sales departments, as they will add an emotional effect to the process of presenting real estate objects and will help managers present a house or an apartment in a convenient, visual form.

“It is well known,”  Maxim Polishkevych, Managing Partner of the Rezultat law firm  expressed his opinion, “that selling an apartment in a house that does not exist yet is an extremely difficult marketing task. After all, any buyer dreams to see and feel what he/she buys. For the Rezultat law firm, which has recently become the URE Club member and specialized in construction business support, the meeting on tools to increase sales of residential real estate became extremely useful.”

The speeches of Tetiana Tovmach (Digital Builders Agency) and Mykhailo Lysyi (HATS) were equally informative. In particular, Tetiana Tovmach made a presentation entitled “How to Make Digital Work for Yourself” on the importance of implementing analytics and call tracking to track the effectiveness of advertising channels and the proper management of advertising budgets for real estate projects. Mykhailo Lysyi presented the HATS Real Estate Showroom—all new buildings under one roof.

At the event, there also took place the presentation and sale of the book AUDIT OF SALES. NEW BUILDINGS from Audit of Sales. The book was prepared on the basis of a large-scale audit of the sales departments of housing societies of Kyiv and the Oblast, the Ukrainian Real Estate Club team directly helped to organize.

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An example of such state of affairs is the problem of the ECO-CHE limited liability company which has recently gained publicity. Thus, the company has tried for four months to assign a postal address to the land plot on which the construction of a garbage processing plant was planned. The land plot is located within the administrative boundaries of Chervonoslobidska Village Council, but beyond the boundaries of the settlement, which has become the cause of misunderstandings.

Obtaining a Postal Address. Normative base

At the legislative level, the procedures for assigning a postal address on land plots located outside the settlement are not clearly defined. However, according to the Decree of the Presidium of the Supreme Soviet of the USSR On Procedure for Determining the Issues of Administrative and Territorial Structure of the USSR of March 12, 1981, which is still valid today, “Naming and renaming avenues, streets, alleys, squares, public gardens, parks, bridges, and other structures that are on the territory subject to city, township, village councils, and assigning to them names of the state and public figures are held by the executive committees of the respective councils of people’s deputies.”

Also, the village council’s powers, in accordance with subclause 10 of clause B of Article 30 of the Law of Ukraine On Local Self-Government, include the accounting in accordance with the law of the real property items, regardless of the forms of ownership.

According to Article 37 of this Law, the competence of executive bodies of village, township, and city councils includes the following (self-governing) authorities: preparation and application to the Council of the proposals on administrative and territorial structure in the manner and within the authorities determined by the law.”

Obtaining a Postal Address. Judicial practice

Investigations of judicial practice on this issue have produced quite clear results. Judicial decisions on issues of obtaining a postal address within the administrative boundaries of the village council (outside of settlements) is the competence of local councils.

In particular, a prime example is the case considered by Sumy District Court of Sumy Oblast chaired by judge I. V. Dashutin No. 587/2240/13-A: the complainant applied to court with a lawsuit in which requested to recognize illegal the actions of Kosivshchynska Village Council, concerning a refusal to assign a postal address to the summer house, which was located on the territory of Kosivshchynska Village Council of Sumy district of Sumy Oblast, and to oblige Kosivshchynska Village Council to assign a postal address to the summer house, located on the territory of Kosivshchynska Village Council of Sumy district of Sumy Oblast.

The Court’s ruling recognized the actions of Kosivshchynska Village Council of Sumy district of Sumy Oblast concerning a refusal to assign a postal address to the summer house, which was located on the territory of Kosivshchynska Village Council of Sumy district of Sumy Oblast, illegal. Also, it obliged Kosivshchynska Village Council of Sumy district of Sumy Oblast to assign a postal address to the summer house, which was located on the territory of Kosivshchynska Village Council of Sumy district of Sumy Oblast.

The ruling was challenged at the Kharkiv Administrative Court of Appeal which overturned it by its decision. The panel of judges disagreed with the first-instance court’s conclusions, based on the fact that clause 3.1 of the Procedure for Assigning and Changing the Postal Address of the Real Property Item Located on the Village Council Territory, approved by the decision of the 26th session of the 5th sitting of Kosivshchynska Village Council of Sumy district of Sumy Oblast decided that assigning and changing postal addresses of a real property item is carried out by relevant decisions taken by the village council’s executive committee.

In turn, clause 2.1 of the Procedure stipulates that for assigning postal addresses to real property items or changing them, business entities and individuals submit an application to the executive committee of Kosivshchynska Village Council. Thus, it’s the competence not of the village council, but of its executive committee.

The Court of Appeal’s decision was challenged by submitting a cassation appeal directly to the High Administrative Court of Ukraine. The HACU’s Resolution No. k/800/2695/14 of August 6, 2015, adopted the new resolution which granted the primary complainant’s claim in part: it recognized as illegal the respondent’s refusal to consider the complainant’s claim to assign a postal address to the summer house and obliged Kosivshchynska Village Council of Sumy district of Sumy Oblast to consider the complainant’s claim in the procedure established by the law.

Obtaining a Postal Address. Common practice

In accordance with established practice, and given that, in accordance with delegated authority established by the Law of Ukraine On Local Self-Government in Ukraine, accounting of real property items, irrespective of the form of ownership, and organization of work related to the creation and running of settlement town-planning cadastre belong to the competence of local councils in the face of their executive bodies.

Monitoring the activities of numerous local councils in Cherkasy Oblast showed that the assignment of a postal address is carried out both by decisions of local councils and by corresponding administrative acts of executive bodies of such councils. Significantly less common is the practice of assigning a postal address by the authorities of town-planning and architecture of the relevant local state administrations.

Obtaining a Postal Address. The lawyer’s commentary

Let’s return to the realities of Cherkasy district. The study of the rules of law and of judicial practice provides an opportunity to assert that Chervonoslobidska Village Council, namely its executive body, has the authority for assigning the address to the land plot located in the Village Council’s administrative boundaries outside the settlement.

The Managing Partner of the Rezultat law firm Maxim Polishkevych says, “It is obvious that the assignment of address to the garbage processing plant, the ECO-CHE seeks to build, is the competence of Chervonoslobidska Village Council. Despite the fact that there is no direct provision which would mean that it is the competence of the Village Council, the analysis of different norms of current legislation and judicial practice proves the opposite. Moreover, it would be illogical to assume that the address outside the boundaries and within the boundaries of a settlement is assigned by two different bodies. It is impossible, since the address will still have the name of Chervona Sloboda village, street (some of Chervona Sloboda streets), and number by order. Consequently, two different bodies of public authority cannot assign an address within the administrative boundaries of one settlement.”

Obtaining a postal address in the city of Cherkasy

To obtain an address, assign the numbering to real property items or change it, citizens and legal entities in Cherkasy should contact the Center for the Provision of Administrative Services (170 Blahovisna Street) with a list of necessary documents. The result of rendering services for the provision of addresses, assignment the numbering to real property items or its change is the order of the Department of Architecture, Town-Planning, and Inspection of Cherkasy City Council.

A complaint against officials’ actions or inaction is submitted to the director of the Department of Architecture, Town-Planning, and Inspection, or the Deputy Mayor on the activities of the Council’s executive bodies, or the Mayor. Challenging actions or inaction, decisions of the administrative body and the body that makes the decision to render the service, is carried out in court.

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Housing construction is one of the important areas of work of the Rezultat law firm’s clients. Supporting such activities includes: obtaining permits, legal support of construction and commissioning of objects.  One of the successfully implemented projects in this direction is the commissioned by our client at the end of last year multi-apartment residential building, located at the crossroads of 126 Smilianska and 8 30-richchya Peremohy Streets, Peremoha microdistrict (Cherkasy city).

Housing construction always requires maximum attention and concentration on achieving the set goal. This is absolutely consistent with one of the principles of the Rezultat law firm’s activities, and therefore, before starting work, we agree with the client the variants of possible results and do not take on cases we won’t be able to fully realize.

Declaration of the object commissioning

Housing construction: news and legislation changes

Housing construction and its support require constant monitoring of actual changes in the current legislation in this area. Thus, among the legislative novelties is the Law of Ukraine On Amendments to Certain Legislative Acts of Ukraine Concerning Improvement of Construction Practices (hereinafter—the Law) which was approved by the Verkhovna Rada of Ukraine on April 13, 2017. The Law provides for improvement of conditions for conducting construction activities and simplifies procedure for obtaining permits by developers.

In particular, state statistical reports on acceptance into operation of completed objects are from now on submitted by bodies of state architectural and building control in the form and within the terms provided by the reporting and statistical documentation approved by the central executive body, which implements the state policy in the field of statistics.

Also, they have changed the conditions of certification of citizens that perform or provide services in the field of architectural work creation: “Professional certification is permitted to citizens who received higher education in the field of professional certification in accordance with the qualification requirements and have relevant work experience not less than three years.”

One of the positive changes for the developers has become the fact that the entities of construction activities from now on do not need to obtain the initial data and technical specifications from the State Emergency Service.

In addition, according to the Law, the examination of the strength, reliability, and durability of construction objects is mandatory only for construction objects that are in the 3rd category of complexity and are being constructed in areas with complex geo-engineering and technogenic conditions.

At present, the Law is signed by the President of Ukraine and will come into force on the day following the day of its publication.

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