Despite a global pandemic, real estate prices in Ukraine have not fallen. In fact, prices in 2021 have already begun to grow. Today, questions surrounding investing in real estate in Ukraine are more relevant than ever as quality real estate remains one of the safest tools for investors in Ukraine.
That being said, without properly verifying potential real estate investments, you may end up with a “pig in a poke,” unable to confirm the quality or authenticity of an investment. Carefully checking a property will help you to minimize risk and avoid fraud. Below is a list of the required documents and actions one should take before purchasing real estate in Ukraine.
After selecting the desired property for purchase, you should always request the following documents from the seller:
- Title deed on the property. It can be a SAP agreement, gift agreement, contract of exchange, certificate of heirship, certificate of title, etc. Pay special attention if the owner inherited the property. In this case, the seller has to prove that there are no legitimate claimants to the inheritance except for the seller.
- Technical passport of the premises. This document will confirm the registered plan of the premises, the presence of load-bearing and other technical structures on the premises.
- Passport and taxpayer number in Ukraine: These documents prove the seller has the legal right to sell the property. It is also necessary to make sure that person has reached the full legal age (above 18 years old).
- Documents confirming marital status of the seller. According to Ukrainian legislation, in cases when the seller is married the notarized consent of his/her spouse for the sale of real estate is required.
- Documents confirming the presence or absence of minor children of the seller. In cases when the owner has a child under 18 years old, consent of Child Protective Services must be provided.
- Document confirming that no one is registered at the property. Ukrainian legislation does not forbid selling property where people are registered, but it can cause some difficulties for the buyer in the future.
- Receipts for utilities or certificate from the service company. This will allow you to make sure that the owner of the real estate has no arrears in the payment of utility services.
The next steps are necessary for the verification of the real estate in open registries:
- State Register of Proprietary Rights to Immovable Property. In this register you can see the real current owner(s) of the property, the history of registration of proprietary rights of this property, as well as the presence or absence of encumbrances on the real estate property such as mortgage or rent. All of the proprietary rights or liens on real estate come into force from the moment of their registration in the State Register of Proprietary Rights to Immovable Property. However, it should be taken into consideration that if the real estate is rented for less than three years, this data is not displayed in the registry.
- Passport Validity Checking Service. This service allows you to check the validity of the document confirming the identity of the seller.
- Register of Debtors. The Register of Debtors allows you to verify information about the seller’s debts.
- State Register of Court Decisions. This registry may help you to check if there are any legal disputes concerning the real estate property. Nonetheless, it should be noted that even if the dispute is settled there is a risk of its resumption.
- Public Cadastral Map of Ukraine. The cadastral map allows a buyer to determine the status of the land on which the real estate property is located.
It may also be a good idea to search for public information about the seller and the property on the Internet.
The sale and purchase agreements of real estate in Ukraine must be done in writing and notarized. The notary is obliged to check all documents and do a search in the State Register of Proprietary Rights to Immovable Property in order to make sure that the seller has the legal capacity to sale the property. However, the notary may not go through of the aforementioned steps in their verification.
Particular attention should be paid to cases where the sale and purchase agreement is signed by a person on the basis of a power of attorney. It may happen that at the time of the conclusion of this transaction the seller has already withdrawn the power of attorney. This entails the risk of cancellation of the transaction. Therefore, it is recommended to invite the owner for personal signing of the transaction documents.
In order to avoid fraud and conclude the deal safely, you should make sure that all necessary checks have been completed to satisfaction. Performing a thorough and detailed check of the chosen real estate property is the most crucial part of the deal.
For these reasons, in order to make the right decision and take into account all the potential risks, it is better to have a full due diligence report prepared in advance by a property lawyer.
Oleksandr Demchuk is a senior Associate at the Ukrainian law firm Everlegal.
