When Land Lease Agreements Signed Before January 1, 2013 Come Into Force – Position of the Grand Chamber of the Supreme Court

As a general rule, land lease agreements signed before January 1, 2013, come into force from the moment of their state registration, unless another procedure for their coming into force is provided by the agreements themselves. State registration of a property right does not substitute for the state registration of the agreement itself, nor does it create legal consequences related to the state registration of the agreement. These conclusions were made by the Grand Chamber of the Supreme Court, confirming its established practice.

Circumstances of Case No. 925/632/19

In this case, a farming enterprise filed a lawsuit against the Main Department of the State Geocadastre in Cherkasy region (replaced by the Kalynopil settlement council of Cherkasy region) to recognize an additional agreement on the renewal of the land lease agreement as concluded.

The case was reviewed by courts multiple times.

After the Supreme Court returned the case for a new trial, the courts of first and appellate instances denied the claim on the grounds that the land lease agreement was not registered in the manner prescribed by law, and therefore it did not come into force, and the plaintiff did not acquire the right to lease the land plot.

The Grand Chamber of the Supreme Court faced the question of whether the lessee acquires rights and obligations under a land lease agreement that was signed but not registered in the prescribed manner before January 1, 2013, but after that date the state registration of the property right of lease was carried out.

Reviewing the appealed court decisions, the Grand Chamber of the Supreme Court confirmed previously formed legal conclusions regarding the significance of state registration of a land lease agreement signed before January 1, 2013, and the moment such agreement comes into force, noting that land lease agreements signed before January 1, 2013, come into force from the moment of their state registration, unless another procedure for their coming into force is provided by the agreements themselves. Only after the state registration of the agreement can the parties exercise their subjective rights and obligations under the agreement.

From January 1, 2013, state registration of property rights to real estate was introduced; however, conducting state registration of the property right of lease of a land plot based on a land lease agreement signed before this date cannot replace the state registration of the agreement itself (state registration of a property right is not state registration of a land lease agreement).

Position of the Supreme Court

In this case, the Grand Chamber of the Supreme Court concluded that the land lease agreement did not come into force and did not create legal consequences because the state registration of the agreement, with which the parties linked its validity according to the terms of the agreement, was not carried out.

Regarding the arguments of the cassation appeal about the impossibility for the lessee to register the agreement, the Grand Chamber of the Supreme Court noted that, being aware of difficulties or impossibility of conducting state registration of the land lease agreement, on which the coming into force of the agreement depends, the parties had the right to agree on another procedure for its coming into force. However, the case materials do not contain evidence confirming the lessee's exercise of such a right.

Considering the above, the Grand Chamber of the Supreme Court in this case left the cassation appeal without satisfaction, and the decisions of the courts of first and appellate instances unchanged.

Subscribe to our Telegram channel t.me/sudua and to Google News SUD.UA, as well as to our VIBER and WhatsApp, Facebook page and Instagram to stay informed about the most important events.