On December 13, 2015, new legislation introducing a number of substantial novelties in the property registration system in Ukraine (the “New Law”) entered into force. Although already modernized in the past years, property registrations have been often seen as the area of typical bureaucracy and transparency issues. As briefly summarized below, the changes proposed in the New Law are generally aimed at facilitation of property registrations by ensuring higher accessibility of registrations.

New property registration system

The New Law abolishes concentration of property registration powers in one state authority, sharing such powers between the following entities:

• Local governments

Local governments such as the state administrations/executive bodies of village, township or city councils will take over property registration powers from the current authorities. The deadline for transition is April 30, 2016. However, as transition requires arranging technical access to the register, as well as handover of numerous registration files there might be considerable delays before the fully functioning system is established.

• Public entities having a special accreditation for registration services

This category of registration entities is an absolute novelty. It is yet to be clarified what kind of entities those would be and when / how they will provide registration services.

• Notaries

Under the New Law, notaries will be fully functioning registrars with broad powers to perform property registration, including initial registration, which they could not do in the current system.

Whilst envisaged in the initial draft of the New Law, banks have not been included in the list of the property registrars in the adopted version of the law.

Other important changes

• The New Law enables performance of registration within the region, where the property is located, which is a broader coverage as compared to the current rule providing that the registrations must be made within the relevant district.
• The New Law introduces an optional procedure of property registration within a reduced period of 2 business days, 24 hours or 2 hours depending on property type and subject to special (increased) fee schedule. The general term remains the same (5 business days).
• The New Law enhances administrative appeal procedure, providing for a possibility to appeal to the Ministry of Justice, which is entitled to revise the initial decision.

In parallel with the above major changes in property registrations, there have been equally important developments in registration of businesses (legal entities, branches, private entrepreneurs etc). With effect from 1 January 2016, the new legislation, inter alia, also empowers notaries to perform registration of legal entities and individual entrepreneurs together with local governments etc. Therefore, next year notaries are to become a single office for most important business-related registration matters. Provided implementation of the proposed changes will be efficient, business should see real practical benefits from more competitive environment that the changes are expected to bring.