Selling real estate under martial law remains a hot topic in both the residential and commercial sectors. The military actions in Ukraine forced both citizens and business representatives to be more reasonable and cautious about purchases, especially in the real estate sector.
In addition, market trends were negatively affected by various factors related to the Great War. Risks have increased significantly due to the difficult to predict situation in the economy, the military situation, constant shelling, and the occupation of certain regions. Potential investors suspended their activities on the market, most developers were forced to freeze residential and commercial projects. Due to the deterioration of economic conditions, the solvency of citizens and businesses has significantly decreased. Entrepreneurs are mostly focused on renting office space, but at the same time, already in the second year of the war, there was a tendency to purchase commercial real estate on the outskirts of Kyiv or in the western regions for companies' own use.
However, later the real estate market began to recover. Ukrainian developers and property owners were able to adapt to the aggressive external environment and continue their activities. Today, the commercial real estate market is actively increasing its indicators, returning to the pre-war state, even introducing new projects for citizens and businesses.
In the first months of the war, transactions in the commercial and residential real estate sectors did not take place due to restrictions on access to the State Register of Real Property Rights. But already in May 2022, access to the registers began to be gradually opened, which allowed for a very slow recovery of demand.
However, it is difficult to talk about the complete recovery of the market sector, since the demand for residential premises in the primary market is only about 30% of the pre-war volumes. The secondary market also significantly reduced the indicators.
Ukrainian legislation does not prohibit the purchase or sale of residential or commercial real estate during martial law. Citizens or enterprises have the opportunity to sell or buy real estate in accordance with the procedure established by regulatory acts, through the conclusion of sales contracts, which require mandatory notarization. The transfer of ownership upon the execution of such transactions shall be entered in the State Register of Property Rights to immovable property.
Given that the possibility of buying and selling real estate is already open, there are a number of nuances that need to be paid attention to. Let's consider this issue in more detail.
Sale of real estate under martial law: features
First of all, it is worth noting that not all notaries have the right to certify contracts for the purchase and sale of real estate during martial law. Only those included in the relevant list approved by order of the Ministry of Justice have such a permit. The list is constantly updated, and you can get acquainted with it on the Internet resource of the state institution. In addition, it is necessary to remember that contracts for the sale or purchase of real estate cannot be certified by any notary on the territory of Ukraine, but only at the location of the object itself, or at the registered place of residence of the buyer or seller.
In cases where the sale of the object is not carried out personally by the owner, but by a trustee on the basis of a power of attorney, it should be noted that as early as May 2023, the requirement to receive an application from the principal to confirm the validity of the power of attorney was canceled. As of today, if more than one calendar month has passed since the date of issuance of the power of attorney, or two in the case of certification by the relevant consular institution, such a statement from the direct principal is no longer required.
From May 2023, there is no need to wait one month for the sale of real estate, if the ownership was acquired during martial law under a contract or through the transfer of property to the ownership of a legal entity as a contribution or through withdrawal from the legal entity's founders.
According to the changes in the Procedure for declaration and registration of the place of residence, now the owner of the apartment has the right to evict the person without obtaining consent, if he is not the owner and has reached the age of majority. Previously, such procedures were possible only in court.
Such innovations significantly simplified the procedures for buying and selling real estate in the residential sector, which is especially relevant during the period of martial law. Thus, having concluded a sales contract, the new owner can independently resolve issues with persons registered on the residential area.
Among the prohibitions, it is worth outlining restrictions on the purchase of property from those who have a connection with the aggressor state. Resolution of the CMU No. 164 "On some issues of notary public service under martial law" clearly indicates that unfinished notarial actions for appeals by persons associated with the aggressor state, which are determined by CMU Resolution No. 187, are stopped. If a person from the list applies to perform a notarial act, the notary must refuse.
According to Resolution No. 187, such persons are:
- citizens of the Russian Federation, except for those who live on the territory of Ukraine on legal grounds;
- legal entities that were created and registered in accordance with the legislation of the Russian Federation;
- legal entities formed and registered in accordance with the legislation of Ukraine, but the ultimate beneficial owner, member or participant who has a share in the authorized capital of 10 percent or more, which is the Russian Federation, or a citizen of the Russian Federation;
- legal entities that were created in accordance with the legislation of a foreign state, at the same time their ultimate beneficial owner, member or participant owning a share in the authorized capital of 10 percent or more, which is the Russian Federation, or a citizen of the Russian Federation.
When choosing real estate, you need to pay attention to its owner, since it is impossible to purchase such property from citizens of the Russian Federation, legal entities whose shareholders are the Russian Federation, or a citizen of the Russian Federation.
When conducting agreements on the purchase and sale of immovable property, it is necessary to remember that the state registration of property rights to immovable property can be carried out exclusively by: state registrars of property rights to immovable property and their encumbrances, the location of which is not in the territory of hostilities, and not in the temporarily occupied territories, as well as notaries included in the list of the Ministry of Justice regarding the possibility of performing notarial acts during martial law.
It is not allowed to acquire the right of ownership of property located in the territories of active hostilities and temporarily occupied territories of the Russian Federation.
Selling Real Estate in Martial Law: Tips for Sellers and Buyers
Taking into account all the innovations and features of wartime, it is possible to formulate a general list of advice for participants in real estate purchase and sale agreements.
First of all, it is necessary to take into account who owns the real estate, because if there are ties with the aggressor state, such real estate cannot be sold. It is necessary to check in advance the availability and compliance of documents for real estate, in particular technical and legal documents, the presence of registration in the Register of Property Rights and the absence of any encumbrances.
In addition, it is necessary to take into account the location of the object, since the sale of property in the administrative boundaries of the territories of active hostilities or under occupation is impossible. Also, you need to make sure that there is no debt for utility services, check whether the property is not the subject of a dispute.
In cases where the property is owned by a legal entity, it is important that the director or other person has the appropriate authority to carry out the transaction. It is necessary to choose a notary, taking into account the availability of rights to execute the transaction and his location.
When making deals on the sale of real estate, the optimal solution would be to turn to specialized specialists who specialize in real estate, verified agencies, as well as specialists in legal support of such deals. The participation of relevant specialists will speed up the process, eliminate most risks and complications, and avoid falling into various fraudulent schemes.