Real estate market: what do we have and what are we waiting for?

Real estate market: what do we have and what are we waiting for? 1536 768 Esquires

Transactions with real estate in Ukraine involved risks at all times. Peer lawyers devoted many analytical articles to this issue in peacetime. Which tendency is now? Under martial law, these risks are increasing at many times. We are going to talk about the residential real estate marketthe realities, risks and development prospects in this article. 

February 24, 2022: a day that has changed not only Ukraine but the whole world. Despite the unfavourable forecasts, people were making happy plans the day before. The human nature always stay positiveBut the war has come. 

The war in Ukraine continues to maim and take human lives, destroy the infrastructure of cities and residential buildings. According to preliminary data from state authorities and independent experts, in 3 weeks of hostilities over 2.5 thousand of residential buildings were completely or partially destroyed by the occupying horde, which came to Ukraine toliberate” and carryrussian world”. People lived there only yesterday The state program of housing restoration will soon begin to operate, but we understand that it is going take years to restore everything that was destroyed. At the same time, citizens of Ukraine more and more often think about buying and selling or other real estate transactions in those regions of Ukraine that, as of today, are relatively safe, in places with no active hostilities. We saytodaybecause threre is a war in our contry, which means we are experiencing constant danger, anxiety and unpredictability.

Realities of the present 

According to experts, the demand for housing in the secondary market in Western Ukraine is constantly growing. The majority of internally displaced persons who are relatively financially secure and have savings want to rent apartments or houses. However, about 3% of such persons are considering the option of buying a home in this region for permanent residence in the future. 

However, it should be take into account that real estate purchase and sale transactions under martial law are dangerous for both the buyer and the seller. Since the beginning of the war, the State Register of Rights to Real Estate has not worked in Ukraine. Therefore, it is impossible to legally conclude sales transactions, since notaries, among other things, cannot properly verify the ownership of the seller’s property. 

The Ministry of Justice claims that in the near future in those regions of Ukraine where there are no active hostilities, access to the State real property register will be restored. However, the access to certain services is likely to remain limited.

We believe that real estate transactions that were actually made during the period when there was no access to the State Register of Rights to Real Estate cannot be considered fully protected. Such legal structures for registering the alienation of real estate as making a will for the buyer, concluding a preliminary sale and purchase agreement, sale by proxy, which is currently taking place in Ukraine, is at the least risky.

Special attention should be paid to the fact that Art. 233 of the Civil Code of Ukraine provides for the legal consequences of a transaction made under the influence of severe circumstances. A transaction made by a person under the influence of a severe circumstance and on extremely unfavorable conditions may be declared invalid by a court, regardless of who initiated it. A feature of the transactions defined by Art. 233 of the Civil Code of Ukraine, is that they are classified as disputed, ie, they can be invalidated only at the claim of the injured party or another interested person. Art. 233 of the Civil Code of Ukraine actually makes a reference to Art. 216 of the Civil Code of Ukraine to determine the consequences of such transactions as invalid in the form of bilateral or unilateral restitution. It should be understood that the posibility that after the war such claims will be the subject of consideration by Ukrainian courts, and the courts may consider the conditions of martial law as a “severe circumstance”, is quite high.

An attempt to see into the future 

It sounds trite, but predicting the future developments in the real estate market is almost impossible. Everything will depend on the political and economic situation in Ukraine, on how long the war will continue and whether it will spread to the relatively safe territories of Ukraine today, how quickly and effectively the state program will work to help victims who have lost their homes. If the demand for real estate (both residential and commercial) increases, then it will grow, first of all, in Western Ukraine.

Source: Yuridichna Gazeta 

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