Prozorro Sale

If you are planning to put up a land plot in your ownership for auction, we suggest that you find out what steps are needed for this. In this material, we give a detailed algorithm of actions of the organizer of land auctions Prozorro Sale by Ukrainian legislation.

What Regulates the Procedure for Disposing of Land Plots in Ukraine?

In June 2021, Law No. 1444 was passed, which determined that all land auctions will take place online in Prozorro.Sale. In addition, the right to dispose of all state-owned land located outside the territorial communities was transferred to local government: village, settlement, and city councils (Law No. 1423). This does not apply to lands that, for example, are used by state enterprises, defense lands, etc. Also, agricultural land plots of communal and state property are not for sale.

What Should the Organizer Do Before the Land Auction Is Announced?

The Land Code of Ukraine in part 1 of article 136 determines the algorithm of actions that the organizer must adhere to for announcing a land auction:

1. Prepare and approve documentation on land management according to the procedure established by law (if the purpose of the land plot changes, a land plot is formed, or if information about this land plot is not entered into the State Land Cadastre).
2. Perform state registration of a land plot.
3. Perform state registration of property rights to a land plot.
4. Conduct an expert monetary valuation (hereinafter EMV) of a land plot by the Law of Ukraine "On Land Appraisal" (in all cases, except for lease), and obtain an extract on the normative monetary valuation (hereinafter NMV).
5. Establish a starting price for a land plot. For sale - the starting price of the plot must be no less than its EMV. For rent, it must be no less than the amount of the rent determined by the Tax Code of Ukraine, and about state and communal agricultural land plots, there must be at least 7% of their NMV.

After that, the organizer takes the final steps:

1. Determines the date of the land auction.
2. Makes a decision on holding a land auction (the list of information specified in it is given below).

Prozorro Sale

What Is Indicated in the Decision to Organize a Land Auction?

In the decision to organize a land auction, the organizer indicates:

- information on technical documentation for land management;
- normative or expert monetary value;
- starting amount of the cost of sales or rent;
- lease term (if a lease auction has been announced);
- the amount spent on preparing the lot (if any);
- restriction in the use of a plot of land;
- authorized person to sign the contract;
- draft agreement.

What Actions Should an Individual Who Owns a Plot Perform?

If a private land plot is sold by an individual, then the following must be done:

1. Check the availability of documents proving ownership. These can be the following documents:

- - State act on the ownership of a land plot – these were issued in 1992-2012.
  - Certificate of ownership of the real estate. In 2013-2015, in confirmation of the registration of the right to the land plot, an extract (certificate) was issued from the State Register of Real Rights to Real Estate, and in confirmation of the entry of data on the land plot into the State Land Cadastre – an extract from the cadastre.
  - Since 2016, based on the results of registration of the right to a land plot, an extract from the State Register of Real Rights to Real Estate has been issued.

2. Find your land plot on the Public Cadastral Map by the cadastral number (map.land.gov.ua). If there is no cadastral number, you should contact a certified land management organization.

3. Make the EMV of a land plot.

4. Set the starting price. NMV can be a benchmark – according to the law, the starting cost cannot be less than NMV.

Prozorro Sale

Rules for Publishing an Auction in Prozorro.Sale

After all the preliminary preparations have been completed, the organizer can publish an announcement on the land auction in the system. The basic requirements are as follows:

1. From the date of publication of the announcement of the conduct of land auctions until the day of the auction, at least 30 and no more than 45 days must pass (part 6 of article 137 of the Land Code of Ukraine).
2. If there is a subject of pre-emptive right to purchase a land plot, the organizer must notify them of such an auction no later than 30 calendar days before the day of the auction.

To publish a lot in Prozorro.Sale, you can use the corresponding Instructions for creating and conducting land auctions.

How Is Monetary Value Determined?

On November 3, 2021, Resolution No. 1147 “On Approval of the Methodology for the Normative Monetary Valuation of Land Plots” was adopted. The normative monetary value is considered to be the capitalized rental income from a land plot, determined according to established and approved standards.

It is from the NMV that the percentage is calculated for the lease of land and the payment of land tax for land plots within the territories of territorial communities. The technical documentation for the NMV of lands, approved before the entry into force of the new Methodology, remains in force until an appropriate decision is made to approve the new technical documentation for the NMV of lands.

How to Proceed After the Auction Ends?

During the auction, the winner will be determined – the participant who offered the best price offer. If only one person submitted the offer, he/she automatically becomes the winner. After the end of the auction, the organizer acts as follows:

1. Checks the documents submitted by the winner for compliance with the auction requirements.
2. Signs a protocol on the results of land auctions.
3. Receives payment for the lot.
4. Signs an agreement on a land plot.

If you have any questions at any stage of the land auction, please contact your manager at SmartTender.biz.

If you are planning to become an organizer of Prozorro.Sale auctions, go through short registration on the site using this instruction.

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