Philosophy commonplaces are also applicable to the legislative process. No sooner the “end” is perceived for land tender norms as promulgated under Law No. 107-VI (sections 2 to 4, 6 to 8, 10 to 18, Transitional Provision) and held as non-constitutional by Resolution No. 10-рп/2008, made by the Constitutional Court of Ukraine and dated May 22, 2008, than the legislator revives such norms in Law No. 309-VI, dated June 3, 2008.
While so reviving, however, “land tender norms” suffered changes and amendments which nature might be resumed as follows:
Innovation No. 1. Selling a leased plot should not result in termination of rights and obligations of the lessor under land plot lease agreement. A model land plot lease agreement as approved by Resolution No. 220 of the CMU (Cabinet of Misters of Ukraine), dated March 3, 2004, indicates that the parties are entitled either to preserve or terminate leasehold obligations upon a change in the owner. Anyway, such a norm opens up new vistas for selling encumbered land plots.
Innovation No. 2. If earlier on the land plots under real estate property as owned by individuals and non-governmental legal entities have been exempted from mandatory public auctions for acquiring leasehold as well as the land plots held by museums or otherwise state-financed, now we have so exempted leasehold land plots:
(а) under social facilities,
(b) designated for construction of social and affordable lodging. Social lodging means residential premises of all ownership forms (other than social hostels) included in social housing stock to be made available, at no cost, to the Ukrainian nationals who need social protection under lease agreements made for a definite period (Article 1, Law of Ukraine “On the Social Housing Stock”). A category of the “affordable lodging” includes low-cost residential premises which individuals may afford as having a low income level and needing their living conditions to be improved. A procedure and specific conditions for creating the affordable lodging is defined in the Decree of the President of Ukraine “On Actions related to the Construction of Affordable Residential Premises in Ukraine and Improving the Lodging Provision for Individuals”.
(c) for using such land plots for mining and special purpose water management,
(d) to be used by religious organizations legalized in Ukraine for placing church buildings. A list of church buildings as recognized in Ukraine may be found in the State Classifier for Buildings and Constructions (ДК 018-2000).
Innovation No. 3. An “inviolability” principle, as applicable to the leasehold acquired by a lessee through public auction, went down the drain. A lessee’s breach in its obligations will result in termination of a lease agreement, under any other circumstances a lessee may rely upon the lease agreement as being valid and effective throughout the entire period set forth therein. It should be noted that those leasehold obligations as in great request among lessees for violations and legal proceedings are those related to the intended use of the land plot, timely rent payments and other obligations as set out in section 96 of the LCU (Land Code of Ukraine). Moreover, norms set forth in section 141 of the LCU remain valid and effective and are free of any exemptions as establishing the grounds for depriving the rights to the land plot in addition to those stated above.
Innovation No. 4. A lessee is prohibited to dispose of its right to lease the land plot being of public or communal ownership (Article 81, the Law of Ukraine “On Land Lease”). Introducing such a norm renders ambiguity. On the one hand, upon such norm becoming valid and effective, no said land plot leasehold may be mortgaged as previously permitted in Article 5 of the Law of Ukraine “On Mortgage”. Indirect disposal of the land plot leasehold is also traced back in joint activity agreements (partnership agreements) when either of the parties makes contribution in the form of the right to lease a land plot and, as a result such, actions are required to be terminated starting from publishing such law. On the other hand, as it turns out, prior to the effective time of said regulation, disposal of right to lease was allowed and thereafter it is allowed to dispose of the right to lease a land plot as privately owned. Nevertheless, practitioners would agree that there is no brave man yet having luck to enter into and perform an agreement for selling and purchasing the right to lease and assignments are seen occasionally only for the claims under lease agreements with the participation of a lessor, which assignment somewhat remotely resembles the thing named by the legislator as the “disposal of the right to lease”.
Innovation No. 5. The State Resources Committee of Ukraine as the central executive power authority is discarded as an entity entitled to manage land plots (Articles 84, 127, 128, 136, section 12 of the Transitional Provisions of the LCU). It was supposed earlier on that the State Resources Committee of Ukraine would be competent to manage agricultural land (section 12, Transitional Provisions as “unconstitutionally worded”).
Innovation No. 6. Competence of governmental privatization authorities has been evolved from the right to “dispose” of land plots under the property in the privatization into the right to “sell” the same. It would be better to do minor things first, but, as a matter of fact, powers to “dispose of land plots” imply functions beyond the strength of such authorities, i.e. letting on lease, changing the intended use, privatization, etc. It is true, however, that the competences of governmental privatization authorities are defined so that they lack the inconsistency a bit, therefore section 12 in the LCU Transitional Provisions as before confers upon in the governmental privatization authorities the right to “dispose of land plots”.
Innovations No. 7. While a starting price for a land plot designated to be sold at land sales was previously equal to the market one (Article 137 of the LCU), the norms thus appearing give different interpretation thereto:
(а) article 137 of the LCU makes the starting price equal to a standard monetary value;
(b) article 181 of the Law of Ukraine “On Privatizing State Property” defines the starting price based on an expert monetary value. Apparently, it is a result of quick responding or purposefully established rule for selling all plots and exemptions thereof as adverting to state-owned lands only under real estate property.
Innovation No. 8. The new Law has also embodied issues related to some proceedings in connection with implementing the land sales. Thus, an arranger for land sales is designated to be a public authority, respective privatization body, local government or governmental enforcement officer acting pursuant a court ruling. The right to carry out public sales will be vested exclusively in legal entities being licensed to carry out land sales, which is similar in general to what the Cabinet of Minister of Ukraine purported to laid down in its resolution No. 394, dated April 17, 2008, which resolution was thereafter suspended. Such license shall be issued as provided for in Resolution No. 1698 made by the Cabinet of Ministers of Ukraine and dated November 14, 2000.
The above innovations are unique due to a mysterious “formula of their operation” and legislative mechanism implemented without any previous probes. Therefore, following section 1 of the Final Provisions in Law No. 309-IV, such law becomes valid and effective on the date of its publishing, but applicable starting from the date when respective provisions in Section 2, Law No. 107-VI, cease to be effective. Taking into consideration the unconstitutional nature of land tender norms in Law No. 107-VI, they are null and void starting from the date of CCU (Constitutional Court of Ukraine ) Decision, that is May 22, 2008, and, respectively, the effective date of Law No. 309-IV.
Therefore, the legislator has complied, in a pro forma manner, with Article 94 of the Constitution of Ukraine as related to laws becoming valid and effective after they are published, meanwhile giving retroactive effects to the same in violation of Article 58 of the Constitution. Thus, those having the right to constitutional appeal have reasons to do some hard thinking over the “doubtful constitutionality” of norms in Law No. 309-IV. In this fashion, it is worth to watch further developments without making haste to take the plunge wholeheartedly into Law No. 309-IV