Property investing for foreigners in Ukraine

Property investing for foreigners in Ukraine

The property rights of foreigners in Ukraine are regulated by the Constitution, the Law on Property and the Civil Code of Ukraine. Foreign citizens and legal entities have the right to buy and own property in Ukraine. The law permits foreign citizens not only to own property but also to use such property for commercial purposes, to lease property, and keep the revenues, profits and goods derived from its use.

When planning to buy a property abroad one should always remember that the foreign property market is currently a seller’s market. The Ukrainian property market is comparatively young and comes with all the risks and problems associated with an immature market. However, emerging markets also bring unrivalled potential for substantial profits and often present the best investment opportunities for the longer term.

The most essential tip for prospective investors is to have a well-informed independent adviser who can speak both English and Ukrainian, the language in which real estate transactions are conducted. Failure to obtain legal advice can result in disastrous financial losses. It is particularly important to have a decent local lawyer, who is well versed in local legislation. Any lawyer can read local laws, but you have to be local to know them properly.

Foreign investors also need to secure the services of a decent agent. One has to be particularly careful about selecting an agent because real estate activity in Ukraine is unlicensed and there are many dishonest people operating on this market. In these circumstances, legal help is vital. Independent lawyers can provide the sort of impartial advice that will help minimize the risks to clients. Unlike estate agents, they do not depend on commissions from sales.

A lawyer advising a foreign citizen on property purchases should be able to translate and interpret all the documentation and conduct him through the whole process from the initial contact with the estate agent to paying the deposit, understanding the contract, amending it if necessary to safeguard the purchaser\'s interests, drawing up a power of attorney if they are unable to be there at the final signing ceremony with the notary, and checking the searches and the final conveyance document transferring ownership of the new property to the purchaser.

The first step for any prospective purchaser of real estate in Ukraine should be to verify the seller's title by reviewing the title documents and the registration of property rights. Another important issue is property encumbrance, i.e. lease contracts, judicial restraining orders, contractual mortgages, tax liens and so on. These, too, needed to be thoroughly investigated.

Once a property has been identified as meeting an investor’s requirements, an offer of purchase can be made which, if accepted, will result in a conditional preliminary sale-purchase agreement. This contract should be checked by the buyer’s lawyer and then signed in front of a notary and notarized.

Foreign citizens wishing to buy property in Ukraine for the first time should be prepared for the fact that purchase procedures often differ from those in the West. In order to avoid major financial losses and heartache in the future, they should take all possible measures to make sure the deal is successful, including acquiring the services of a lawyer who is highly qualified in this field.