ULF-2022:NEW VECTORS OF THE CONSTRUCTION LEGISLATION

Oleksandra FEDOTOVA, partner, Head of Real Estate and Construction Practice
Dmytro NIKOLOV, attorney, senior associate of Real Estate and Construction Practice

https://ukrainianlawfirms.com/reviews/real-estate

As of 24 February 2022, Ukraine started the latest stage in its fight for independence and freedom. We woke up with the World War. From this very moment, our lives changed once and forever. The construction sphere changed dramatically too. Rebuilding is now the main focus, not just construction. We have to rebuild fast and better!

Taking into consideration current challenges, construction legislation is not developing fast but at a crazily fast pace. All that had been done over a period of years in the past is now being done in the space of months.

That is why we could not observe all the changes adopted over the last six months. We will focus on the main issues.

At the moment, the following important vectors in the development of construction legislation can be identified:

1. Unification of land management documentation (zoning) with urban planning documentation;
2. Digitalization of materials and processes in the construction sphere;
3. Limitation of access to some materials and registers;

that is going along with

1. Liberalization of rebuilding procedures, as well as
2. Making decisions regarding some issues in manual mode for the period of martial law.

Unification of Land (zoning) and Construction Documentation

A reminder that on 24 July 2021, the Act of Ukraine On Amendments to Certain Legislative Acts of Ukraine Regarding Land Use Planning No. 711-IX came into force. This law was adopted to unify land management documentation (zoning) with urban planning documentation.

In accordance with the new law, new urban planning documentation is to be developed, in particular:

• Comprehensive plans for spatial development of municipal territories,
• general plans (including zoning plans) and
• detailed plans for territories (including zoning plans).

All these types of documentation have to include land management documentation.

The entire territory shall be divided into functional zones. Every functional zone includes the main and supportive designated purpose of land plots with a correlation of 60%:40%, respectively.

All information regarding urban planning shall be integrated to the State Land Cadaster. As a general rule, the designated purpose of a land plot may be set up by its owner or user within the list of permitted designated purposes for the respective functional zone (part 3 of Article 20 of the Land Code of Ukraine).

At the end of July 2021 work on drafting new urban planning documentation began but it still remains unfinished. There is no adopted urban planning documentation, which was drafted according to the new rules. As a result, information regarding urban planning has not been included in the State Land Cadaster.

It was obvious from the very start of the war that new urban planning documentation would not be drafted in the near future and that temporary decisions would have to be found.

According to recent amendments, all urban planning documentation approved before 24 February, 2022 is valid till 1 January, 2025 and up till that date it can be amended in accordance with the old rules. As of 1 January, 2025, new rules will apply to all urban planning documentation.

Old zoning plans are recognized as part of general plans of settlements. If there are no zoning plans in some settlements, zoning plans can be approved by amending the general plans of these settlements.

If there is any urban planning documentation that had been drafted before 24 July 2021 it could be approved not taking new rules into consideration. In such a case initial data for design works could be issued even if there is no respective information in the State Land Cadastre.

Temporarily, up till 1 January, 2025 special regime zones could be envisaged by a detailed plan of the territory or by a land management project on organizing and establishing such zones.

If there is a plan to construct outside boundaries of a settlement and there is no comprehensive plan for spatial development for this territory, then up till 1 January 2025 a detailed plan can be drafted and approved based on the planning scheme of this territory (old urban planning documentation).

Nevertheless, there are some temporary rules that have been adopted. We support the need to develop new urban planning documentation. In our opinion, it can help to rebuild Ukraine in a new and better way.

Digitalization of Materials and Processes in the Construction Sphere

The Portal of the State Electronic System in the field of Construction (hereinafter – the Electronic System) was launched in Ukraine before the war began. The Register of construction activities operates within the confines of the Electronic System. The main goal of the Electronic System’s operation is digitalization of construction processes.

This process began moving fast right from the beginning of the war.

Nowadays, all orders, permissions, approvals for construction as well as all claims and decisions shall be filed and obtained using instruments of the Electronic System.

All new urban planning documentation shall be drafted electronically and be inputted into the Electronic System. The Electronic System is integrated with other registers in Ukraine.

Additionally, as of 26 May, 2022, the regime for use of a land plot where cultural heritage objects are situated as well as adjacent zones shall be set up by scientific project documentation in the field of cultural protection. If there is no respective documentation, the regime of usage of lands within areas under heritage protection shall be set up by the Law of Ukraine On the Cultural Heritage Protection. So, a regime of automatic protection of cultural heritage areas was introduced that is similar to the regime of coastal areas.

All information regarding such protected areas shall be put into the Electronic System. Before the State Register of real estate heritage in Ukraine is launched and integrated with the Electronic System, all permissions, orders and approvals shall be issued by the state authorities of heritage protection via the means of the Electronic System.

It is worth mentioning that Resolution of the Cabinet of Ministers of Ukraine No. 722 establishes the principle of tacit consent for receiving initial data for construction design. If within the period of 10 (ten) working days there is no answer to an application for issuing initial data for construction design, the construction design can be drafted without obtaining the initial data in accordance with urban planning documentation and pursuant to the Act of Ukraine On the Cultural Heritage Protection. This procedure shall be conducted via the means of the Electronic System.

Even though the new Electronic System is not ideal, and taking into consideration that a lot of urban planning documentation (i) is old, (ii) not accurate or (iii) there is no such documentation at all as well as (iv) a lot of this documentation is not digitalized and has not been put into the Electronic System, the way that Ukrainian legislation is being changed is very optimistic. It makes us believe that working in the construction sphere will be easy and convenient.

Limitation of Access to Certain Materials and Registers

At the beginning of the war many Registers did not work. At present all the registers are in working mode, but the functions are limited. The registers do not work at all on some territories (Russian-occupied ones).

To carry out topographical and geodetic surveys during a period of martial law, it is necessary to obtain a permit from the Security Service of Ukraine.

All these limitations are forced, temporary measures.

Liberalization of Rebuilding Procedures

Due to the unprovoked aggression of the Russian Federation millions of square meters have been ruined or damaged. Therefore, in order to ensure speedy rebuilding some liberalized procedures have to be adopted.

As a result, simplified procedures of dismantling and overhaul were introduced.

As a first stage the examination of destroyed or damaged buildings will be carried out by experts. It is on the basis of that examination that the deficiency act will be drafted and the decision will be made to dismantle or rebuild (overhaul) the building.

During martial law, project documentation for an overhaul will not be drafted and approved in the classic understanding. To conduct an overhaul it is sufficient to have a deficiency act, explanatory note and an estimate on new “project documentation”.

Nevertheless, project documentation for an overhaul in the classic understanding will not be drafted, and the examination of new “project documentation” will be conducted (in cases when required by law). In practice, however, this causes many questions to arise. For this purpose, a clarification by the Ministry of Communities and Territories Development of Ukraine has to be issued.

During a period of martial law and within one year afterwards, the construction of a low-rise homestead can be carried out without a construction passport on the basis of a scheme of intentions for construction. This scheme shall be drafted by the architect or design engineer and uploaded to the Electronic System.

Making Decisions Regarding Certain Issues in Manual Mode for the Period of Martial Law

During martial law, the construction of some real estate is possible even if there is no urban planning documentation or such documentation does not match up with construction plans.

This construction is possible pursuant to project documentation drafted in accordance with the reasoned conclusion of the authorized body of urban planning and architecture on the possibility of placing the respective object on a land plot. This conclusion is a special type of initial data for design and is the basis for changing the designated purpose of a particular land plot.

The list of objects that may be constructed in accordance with such a simplified procedure is limited, but includes: (i) houses for internally displaced persons (IDPs), (ii) production facilities for relocated enterprises, (iii) river ports and terminals, (iv) infrastructure objects (service facilities excluded), (v) sites for waste and (vi) multimodal terminals and production and transshipment complexes.

Moreover, during martial law the procedure for the placement of temporary structures for IDPs is greatly simplified. Such structures can be located on the basis of a scheme of plots with any designated purpose (with certain exceptions). The scheme has to be approved by the head of the local council or the head of the local military administration.

These procedures are opaque and are concentrated in the hands of a small group of officials who make decisions based on their subjective opinion. Although wartime and reality dictate the adoption of unpopular and fast decisions, the above-mentioned procedures do heighten corruption risks.