Prozorro Sale

The procedure for renting state and communal property is officially carried out now according to the new rules. All of them are set out in the Order of renting out the indicated property, adopted by the Cabinet of Ministers on June 3, 2020. The approved procedure was created in fulfillment of the conditions of the Law of Ukraine “On the lease of state and communal property” dated February 1, 2020. According to it, all procedures for the renting out of property should be carried out in an electronic trading system (hereinafter – ETS). Read more about the new conditions in this article.

From now on, lessors have to keep two types of property lists

Under the new rules, lessors must create and maintain two types of lists between which they will distribute their property:

1. The List of the first type is for commercially-attractive property that is leased exclusively using auctions.
2. The List of the second type is for property that can be leased without an auction. The decision to include an object on this List is made by the local council.

Both lists from October 1, 2020 should be published in the Prozorro Sales system.

What information needs to be published in the system

From February 1, 2020, as soon as the Law entered into force, the organizers were obliged to conduct auctions to lease state and communal property exclusively in the Prozorro Sale. But all the stages preceding the publication of an auction announcement in the ETS are still taking place outside of it. These are the following steps:

- filing an application for inclusion of property in the lists;
- inclusion of property in lists;
- publication of lists.

Starting from October 1, 2020, in addition to the lists itself, applications for including property in the lists should be published in the system.

How does a lessor get started with Prozorro.Sale?

Each lessor who intends to lease state or communal property must perform the following actions:

1. To get acquainted with the Law and the Procedure for leasing state and communal property.
2. Register using the SmartTender platform in the Prozorro Sale.
3. Sign a free contract with SmartTender. It is very similar to a small privatization agreement, but should still be concluded separately.
4. Take appropriate training.
5. Include a potential rental object in the List.
6. Place the announcement of the transfer of property for rent in the ETS using a personal account.

Lessor's actions in organizing electronic auctions

A government agency that leases commercially-attractive property performs the following actions:

1. Publish on its site the List of the first type if the list of properties that should be rent out was created before February 1, 2020.
2. Make a decision on including the object in the List of the first type after agreement with the balance holder and the authorized governing body of the balance holder. The institution makes a decision on its own initiative, on the initiative of a potential tenant or balance holder.
3. Publish information about the object included in the List of the first type on its website (from October 1, 2020 – in the ETS).
4. Publish an announcement on the transfer of property for rent at an auction in Prozorro.Sales.
5. To approve the protocol of the auction, sign a lease agreement and publish them in the ETS.

Actions of the balance holder who plans to rent the property out

An institution that is a balance holder of commercially-attractive state or communal property and wants to rent it out, must perform the following actions:

1. Agree with its authorized management body to rent the object out.
2. Make a decision about the intention to rent the property out.
3. Transfer information about the property and the decision of intent to the lessor.
4. After the auction, sign a tripartite agreement with the lessor and the tenant.

If the balance holder rents out an object with an area of less than 400 square meters, he has the right to perform the powers of the lessor.

Actions of a tenant who wants to participate in electronic auctions

A potential tenant who wants to rent state or communal property must perform the following actions:

1. Register on the SmartTender.
2. Find the desired rental object in Prozorro.Sale.
3. Submit an application for participation in the auction of the desired rental object.
4. Pay registration and guarantee fees.
5. Submit a closed price offer.
6. Take part in the auction.
7. In case of victory, sign the protocol and rent agreement.

If the desired object is not published in the ETS and is not included in the List of the first type, the tenant may initiate the inclusion of this object in the List and the publication of the lot in the ETS.

The full text of the draft resolution “On Approving the Procedure for the Rentin Out of State and Communal Property” can be found on the official website of the Ministry of Economy or downloaded here.

Find real estate of state and communal enterprises, participate in Prozorro.Sale auctions and win with SmartTender!