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Is it possible to use real estate in business?

Business owners usually need real estate to do business. But can a home be used for the above purpose?

Part one of Article 383 of the Civil Code of Ukraine (hereinafter - the Central Committee of Ukraine) and Art. 6 of the Housing Code of Ukraine (hereinafter - Housing) explicitly prohibits the use of housing for industrial production. But does the concept of "industrial production" apply to all types of business activities?

Industry as a term is not interpreted in the legislation of Ukraine, but is clearly defined as "production" in the available definitions in non-normative sources. First of all, it should be noted that entrepreneurial activity is not limited to an industrial nature. In other words, entrepreneurship does not necessarily involve the production of something. For example, non-productive services.

In turn, economic activity according to h. 1 Art. 3 of the Commercial Code of Ukraine (hereinafter - the Civil Code of Ukraine) defines the activities of economic entities in the field of social production, aimed at manufacturing and selling products, performing works or providing services of a cost nature that have a price.

At the same time, there are other problems with the use of housing for business purposes. The courts of Ukraine are in favor of the use of real estate by business owners. Thus, the Supreme Court (hereinafter - the Supreme Court) in its Decision of 30.10.2018 in case №524 / 7508/15-a determined that the right to use their property for business activities in the manner and with the restrictions established by law, directly enshrined in Article 320 of the Civil Code of Ukraine (in the context of the use of real estate).

However, the Resolution of 28 December 2010 in case № 11/161 of the Supreme Court indicates that the use of residential premises for purposes other than the residence of citizens is allowed only if they are declared unfit for habitation and further transferred to non-residential premises on the basis of relevant decisions executive committee of the regional, city (city of republican subordination) council (now - local governments).

In conclusion, it should be noted that the law explicitly prohibits the use of housing for industrial production, but this way of doing business does not cover entrepreneurship completely. Therefore, the use of residential premises for business purposes is possible provided that the purpose of such real estate is changed.

In the event of any questions related to the use of real estate in business, experienced specialists of Armadum Lawyers are ready to do everything possible to protect your violated rights and interests.
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