Ukraine has opened property and companies registers and resumed transactions with real property and corporate rights

On 19 April 2022, the Government of Ukraine passed Resolution No. 480 “On Amendments to Certain Resolutions of the Cabinet of Ministers of Ukraine regarding the Activity of Notaries and the Functioning of Unified and State Registries Maintained by the Ministry of Justice during Martial Law".

The resolution introduces conditions for notary services and public registries operation during martial law, outlines the procedure allowing notaries to perform key registration actions, and simplifies processes.

Notaries allowed to carry out notarial actions

During martial law and one month after its cancellation only a limited number of notaries will have authority to conduct notarial and registration actions with valuable property and have full access to public registers. Such actions with valuable property, among others, include certifying and registering the following documents:

• agreements on property alienation;
• inheritance agreements;
• mortgage agreements;
• agreements on an assignment of rights under the loan or mortgage agreements;
• long-term lease agreements;
• certificates on property acquisition as a result of the bidding;
• agreements on alienation of securities and corporate rights as well as transfer-acceptance acts regarding participatory interests in charter capitals; and
• POAs on alienation of the property or funds from banking accounts, management and alienation of securities and corporate rights.

To become eligible for conducting actions with valuable property, a notary must comply with the Resolution’s requirements and be included in the list of eligible notaries. The requirements mainly state that an applicant must have no history of non-compliance with the law. A notary should apply to the Notary Chamber of Ukraine and the Ministry of Justice of Ukraine. If the latter identifies no previous violations or misconduct, it will include the notary to the list of notaries allowed to conduct notarial actions towards valuable assets.

The enrolment to this list empowers a notary to carry out registration actions with valuable property within the Registry of the Proprietary Rights to Immovable Property and the Unified State Register of Legal Entities, Private Entrepreneurs and Public Formations.

On 3 May 2022, the Ministry of Justice of Ukraine approved eligible notaries. The relevant list is not final, and the ministry might further amend or extend it. On 7 May, the State Register of Proprietary Rights to Real Estate and the Unified State Register of Legal Entities, Individual Entrepreneurs and Non-Government Organisations were opened for the listed notaries.

However, given the state of martial law in Ukraine and security restrictions, there still are certain limitations.

Limitations as security measures

Under the Resolution, notaries in several regions of Ukraine are restricted from completing registration and certification actions related to valuable property, including specific districts of the eastern regions, such as Donetsk and Lugansk. Additionally, to prevent malpractice, the Resolution bans certification of the property alienation agreements, if:

• the notary is located out of the property location area, except for property located in Kyiv or Kyiv region;
• agreements are signed on behalf of the individual under the POA; or
• agreements are signed within a one-month period from the previous title transfer.

Title and encumbrance registration procedures are also affected by some risk mitigators, namely:

• Notaries, who have been added to the list with a disclaimer preventing certification of agreements on disposal of real estate, securities and corporate rights, cannot register such objects or rights or encumbrances to them.
• Notaries cannot register property rights or encumbrances under the agreement, certified after the war started, since this certification is a grave violation of the law.
• Notaries cannot register the transfer of ownership title to property if such transfer was conducted to or from the charter capital of a legal entity.
• It is impossible to register ownership title for real estate that was obtained during the one-month period before the anticipated registration.

Simplified procedures and rectified legislative gaps

Notary certification of Powers of Attorney (POAs) has been significantly simplified and can be done without special notarial forms, given their deficit because of the military actions. But for the avoidance of notary malpractice, the Resolution introduces some exceptions to this rule, such as POAs on alienation of property or funds from bank accounts, management and alienation of securities and corporate rights, etc.

The Resolution clears the issue of out-of-court debt collection based on a notary warrant. It rectifies the legislation gap that existed since 2017 when the court nulled the provision allowing the carrying out of executive endorsements under loan agreements that are not certified. Thus, under the resolution, a notary can enforce a debt by executive endorsement (i.e. notary warrant) only under a loan agreement, which was certified by a notary.

CMS will continue monitoring the state registration and real estate developments and keep you updated.

Legislation: Resolution “On Amendments to Certain Resolutions of the Cabinet of Ministers of Ukraine Concerning the Activity of Notaries and the Functioning of Unified and State Registers Maintained by the Ministry of Justice during Martial Law"