Amendments to the Civil Code are being prepared in Ukraine that may allow for the legalisation of the actual seizure of property. We are talking about situations where, for example, an abandoned plot is fenced and cultivated and then registered as property.
What the new Civil Code provides for
The draft of the new Civil Code of Ukraine provides for the possibility of legalising property that has been seized. According to media reports, the document proposes a mechanism whereby an entry in the state register, rather than the original origin of the property, becomes decisive for acquiring ownership. This means that a person who, for example, has fenced and cultivated an abandoned plot of land may become its owner after making a corresponding entry in the register.
More details about the changes are available from Judicial and legal newspaper. Under the new rules, if property is not entered or is entered with errors in state registers, it may lose legal protection. This creates grounds for challenging ownership and transferring property to other parties.
How the bona fide purchaser mechanism will work
The key innovation will be the principle of a «bona fide purchaser». If a person receives property on the basis of an entry in the register and is unaware of the violation of the previous owner's rights, it will be almost impossible to return such property. The new owner will receive maximum protection of their rights, even if the property was alienated illegally.
The deadline for challenging ownership is also changing: it starts to run from the moment an entry is made in the register, even if the actual owner was not aware of it. This makes it much more difficult to recover property through court procedures.
Risks for owners and state property
The legal community points out that such changes may lead to the legalisation of the illegal alienation of state or other people's private property. If property is not properly registered, it becomes vulnerable to seizure. Owners who do not monitor the status of their property in the registers risk losing their rights without the possibility of effective defence.
This is especially true for state and communal land, as well as for apartments or houses whose owners are abroad or have not used the property for a long time. Lack of control can lead to the loss of property.
Why it matters
The introduction of such norms in the Civil Code may radically change the legal framework in the property sector in Ukraine. On the one hand, it may simplify procedures for those who actually use abandoned property, but on the other hand, it creates risks for the rightful owners.
Implementation of this mechanism without proper safeguards could negatively affect the protection of property rights, which is the foundation for the country's investment attractiveness. Experts warn that such changes need to be widely discussed and finalised to avoid massive abuses and raider attacks.
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