UKRAINE Law and Practice Contributed by: Timur Bondaryev, Maryna Sharapa, Andrii Pidhainyi and Olena Yurets, Arzinger
3.9 Effects of a Borrower Becoming Insolvent A borrower’s security interests do not become void in the event of its insolvency. However, a debt restructuring plan, which is approved by the court, may provide for the release of certain debts. Once the debt is released, all security instruments shall automatically terminate. Furthermore, any agreements that the borrower entered into within three years prior to the com - mencement of the insolvency proceedings may be clawed back – ie, invalidated by a court at the request of the receiver or a lender if they damaged the borrower’s solvency (eg, where the borrower prematurely performed its obliga - tions or undertook excessive liability that led to insolvency). 3.10 Taxes on Loans Due to the intensification of the government’s housing programme, all costs of concluding a contract and registering real estate have been transferred to the borrower – the buyer of such property. As a rule, the bank charges a commis - sion of 1%, and the new owner must also pay for mortgage insurance (0.25% of the value). Per - sonal income tax of 5% may also be payable if the property has been owned for less than three years, and if it is the second sale in a calendar year. 4. Planning and Zoning 4.1 Legislative and Governmental Controls Applicable to Strategic Planning and Zoning The government and municipalities develop and approve various urban planning documents that regulate the zoning of territories. Businesses
must comply with the regulations when allocat - ing land and developing any real estate. 4.2 Legislative and Governmental Controls Applicable to Design, Appearance and Method of Construction State standards are approved by the Ministry for Communities, Territories and Infrastructure Development of Ukraine. These standards regu - late requirements as to the design and method of construction of real estate. Certain parts of the appearance of real estate, such as facades, may be regulated by municipalities (eg, the appear - ance of advertisements and naming signs). 4.3 Regulatory Authorities The development and designated use of a real estate object is performed by the designer at the developer’s request. It should comply with the urban planning documents and designated use of the underlying plot of land. There may also be other restrictions, such as for protection zones, sanitary protection zones and cultural heritage areas. Some restrictions may prohibit the con - struction of residential real estate, while others may prohibit any construction whatsoever. 4.4 Obtaining Entitlements to Develop a New Project Several stages of development may be involved, depending on the project. The developer may need to: • prepare a detailed plan of the territory and obtain approval for it; • conduct an environmental impact assess - ment; • design the project; • undergo expert valuation of the design; and • obtain a construction permit.
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