Investing in real estate in Ukraine – basic rules and laws
In Ukraine, many investors invest their capital in real estate. Investing in real estate in Ukraine is a rather profitable but difficult business. After all, it only seems that you can invest your finances in real estate, and then sell it and get income. In Ukraine, there are still some rules and laws that regulate this type of activity, and also regulate the process of buying real estate.
Investor rules to buying real estate in Ukraine
Every investor, before buying an apartment in a new building, must know certain rules and laws. These rights and obligations are currently established by the legislation of Ukraine. But, there are rights and obligations for the developer, which should be paid special attention to. In this article, we have selected the main laws and regulations, as well as obligations that you need to pay attention to when investing in real estate in Ukraine.
Real estate and investment laws
The purchase of an apartment is an investment in a property. Everything about this form of business transaction can be found in the Law “On Investment Activity”. The document regulates the rights and obligations of the investor and the seller, and also regulates the procedure for conducting investment activities. This is one of the basic laws for an investor, because he determines the following: how to protect their investments (section 2), each party to the transaction has guarantees (article 18), for what and how the investor and the developer are responsible (article 8), how finance investment activities (Art. 4).
If an investor becomes familiar with this law, he will have a complete understanding of how to legally conduct his business and invest in real estate. Having familiarized himself with the norms of this law, the investor will not only know his rights and obligations, but will also be able to act correctly in the process of acquiring an apartment in a new building within the framework of the legal schemes provided for by the document: through the construction financing fund; by issuing targeted bonds; through the investment institution. But the small variety of permitted mechanisms and not always favorable conditions become the reason that developers use other schemes bypassing the law. The main goal of such actions is to optimize the tax burden. In this case, construction companies attract investments based on the norms of the Civil Code.
Sale agreement
The third paragraph of Chapter 61 of the Civil Code tells about a construction contract. Thus, this document regulates the relationship between the parties, and not only the developer and the investor, but also landowners, contractors and the like. The provisions of the Civil Code contain quite a lot of wording that allows developers to legally bypass strictly established investment frameworks and apply flexible schemes. You should pay attention to them in case of investing according to a scheme not provided for by the law “On investment activity”. This is true in the case of buying an apartment under a directive, forward contract, equity participation agreement, purchase and sale of property rights, and the like.
Law “On the regulation of urban planning” Document No. 3038-17 protects public and private interests in the context of the development of territories. It is aimed at the stable development of the area, regulating the legal and organizational aspects of construction. From this law you will learn: which authorities should be contacted in case of any problems during the construction of a new building; how the process of territory development is organized and controlled; how are completed construction projects accepted; what is the role of GASK in the process of construction and acceptance of a new building and much more.
Investing in real estate in Ukraine is a profitable business for investors.
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