The maintenance and increase of the bank land still remains a topical issue both for large agricultural holdings and individual farmers. As long as moratorium is on and the opening of land market is being discussed, the rent and alternative land relations are on great demand among agrarians.

It is expected that the Supreme Court will determine soon if the transfer of a right to use a land parcel for agricultural needs to sub-emphyteusis comes into force or it does not.

Yuri Tyutyunnik, associate at Evris, gives his comments for “Yurydychna Praktyka”.

Expecting the adoption of Law of Ukraine On Agricultural Land Transactions (on emphytheusis), the issue of a possibility of transferring a right to use the land parcel to third parties into so called sub-emphytheusis is becoming more and more topical at the land relations market. This way of land transfer is gaining popularity among the land relations subjects.

A concept of sub-emphythesis, in our opinion, contradicts the provisions of the Civil Code of Ukraine and the institution of emphytheusis in general. According to Part 2 Article 407 of the Civil Code of Ukraine, the right to use a land parcel for agricultural needs can be alienated and inherited. Moreover, according to part 2 Article 411 of the Civil Code of Ukraine, in the event of emphyseusis sale, the land owner shall be entitled to its priority buyout. Thus, a third party entitled to use the land parcel by an emphyteuta either will not be able to exercise his/her rights in full or will violate the land owner’s rights while exercising them.  As an example it is enough to mention a situation where the emphyteuta will want to sell his/her right of use.  Will the owner not lose a possibility to control appropriate use of the land parcel according to the agreement and legislation?

It is also to be mentioned that part 1 of Article 407 of the Civil Code of Ukraine stipulates a designated use of emphytheusis as “for agriculatural needs”. Moreover, the transer of use into sub-emphyseusis cannot be considered to be the designated use of the land parcel since the emphyteuta receives profits from sub-emphytheusis rather than from the use of the land parcel in compliance with the designated use.