Despite the fact that the free real estate market in Ukraine is relatively young and immature, the property buying process in Ukraine is quite well documented and a foreign buyer’s rights are protected; having said that, the lack of sophistication in the marketplace means that it is not a place for the risk averse. If a potential property investor follows the general rules and guidelines as laid out in this article, most should avoid the well documented traps and pitfalls associated with buying and owning land and property in the Ukraine. In 2004 Ukraine adopted a new Civil Code, this together with the Constitution, the Law of Ukraine on Property and the Land Code govern the rights of a foreign citizen wishing to own residential or commercial property and land in the Ukraine.

Currently foreigners are not restricted in their purchase, ownership, use and resale of property and certain types of non-agricultural land.  Some foreign buyers prefer to purchase in the Ukraine by means of a local limited company type structure to protect their privacy and assets from unwanted attention.  Whether or not this approach suits the individual investor is something to discuss with a lawyer in the Ukraine.

The services of a decent lawyer should be secured as soon as an investor sets foot in Ukraine and well before any offer to purchase real estate is made.  The next person an investor will need to assist with the property buying process is an estate agent.  Ukraine is a country where there are both incredibly good estate agents and incredibly corrupt agents who attempt to charge both the buyer and vendor and potentially resell the same piece of property repeatedly.

If at all possible a property investor should seek the advice and recommendations of trusted sources over which agents can be trusted.  Decent estate agents in the Ukraine are well worth doing business with as they will know about properties that are for sale before they are ever marketed, but their fees and who actually pays them should be negotiated in advance.

Once a piece of property or land has been identified as meeting an investor’s objectives an offer to purchase it can be made which, if accepted, will result in the buyer and vendor entering into a conditional preliminary sale-purchase agreement.  This contract should be checked by the buyer’s solicitor and then signed in front of a notary and notarized.

At this stage a non-refundable deposit should be paid by the property investor and the investor’s solicitor should begin doing their due diligence on the property, the vendor and the title deeds of the real estate.  There is usually at least a 14 day gap between the preliminary contract being signed and the signing and registration of the final contract to allow searches and surveys to be carried out.

To aid the buyer’s solicitor in his searches the vendor should offer the following documents up for scrutiny: -

1) the certificate of privatization or a previous purchase contract or proof that the vendor owns the property as a result of inheritance

2) a certificate from the Unified Register of Prohibitions on the Disposal of Immovable Property to prove that there are no outstanding debt or legal issues against the property being offered for sale

If all is found to be in order with the investment property in Ukraine the final sale-purchase agreement will be signed and notarized and the notary will register the document with the State Registry.  This process can take a few days and it is at this point that occasionally an unscrupulous agent or vendor will resell the property on to another third party before the registration of the sale appears in the public records.  To get around this issue an investor should insist that a final balance of money is withheld until the registration process is complete.

In terms of the fees, charges and taxes that a property investor in the Ukraine may incur these include the solicitor’s fees, estate agent’s fees, property registration fees, pension fund duty and notary fees.  Those who allow for between 5 and 7% of the purchase price for these extra costs should find themselves well covered.