The essence and significance of lifting the moratorium on the purchase and sale of agricultural land

On July 1, 2021, the moratorium on the purchase and sale of agricultural land, which existed in only a few countries except Ukraine (until recently), ceased to exist. Landowners have been waiting for decades for this law to be passed, but a positive decision on the issue has provoked a mixed reaction. We explain what it means to lift the moratorium on the sale of agricultural land.

What changes the lifting of the moratorium?

The lifting of the moratorium was the result of landowners gaining the right to buy and sell it. Thus, a land market was created on the territory of Ukraine, because until now only the state and local governments had the right to sell land plots. In other words, from now on, landowners can also be private landowners.

At the same time, the law allows, under certain conditions, to transfer land ownership to foreign persons.

Limits of permission for purchase and sale of agricultural land.

Instead, there are certain restrictions on the purchase and sale of agricultural land, respectively, the lifting of the moratorium is not absolute.

Thus, the new law sets a limit of 10 thousand hectares for land owned by both individuals and legal entities. This takes into account the land as a common property right, and in relation to its share in the authorized capital, mutual fund or in accordance with the shares of a legal entity in which such an individual is a participant. However, within 01.07.2021 - 01.01.2024 (not inclusive) the limit for individuals is set at 100 hectares.

At the same time, we must emphasize that the lifting of the moratorium does not apply to those land plots that are in state and communal ownership; on land located within the temporarily occupied territories.

A list of persons who do not have the right to acquire ownership of such lands has been established. Such persons are: legal entities, participants or ultimate beneficial owners of which are persons who are not citizens of Ukraine - for agricultural land of state and communal ownership, agricultural land allocated in kind (on the ground) to owners of land shares (units) ), which are located closer than 50 km from the state border of Ukraine (except the sea); legal entities whose participants or ultimate beneficial owners are citizens of a state recognized by Ukraine as an aggressor state or an occupying state; persons belonging to or belonging to terrorist organizations; legal entities whose participants or ultimate beneficial owners are foreign states; legal entities in which it is impossible to establish the ultimate beneficial owner; legal entities, the ultimate beneficial owners of which are registered in the territories included in the list of offshore zones; persons in respect of whom special economic and other restrictive measures (sanctions) have been applied in accordance with the Law of Ukraine “On Sanctions” and persons related to them; legal entities established under the legislation of Ukraine, which are under the control of individuals and legal entities registered in the states included in the FATF in the list of states that do not cooperate in the field of combating money laundering.

Thus, landowners, albeit with restrictions, but from this month are able to dispose of their lands more widely, as well as - availability to foreign persons (in case of compliance with land legislation).

In the event of any disputes regarding the improper performance of sales contracts by unscrupulous sellers or buyers, experienced specialists of Armadum Lawyers are ready to do everything possible to protect your violated rights and interests.