Ukraine: Still not ready to welcome western baby-boomers, IRED

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Simeon Mitropolitski

Simeon Mitropolitski is a Canadian analyst, of Bulgarian origin, and a former syndicated columnist with the Bulgarian News Agency (BTA). He is the author of several hundred articles dealing with hot political and economic topics, both national and international.

He was part of the first group of Bulgarian intellectuals and students that began the opposition movement that finally put an end to the communist regime in this country in 1989, and in 1996-1997 participated in international observation teams during the elections in several Balkan countries - Romania, Albania and Bulgaria.

In 2002 Simeon and his family moved from Bulgaria to Canada where they live now in Montreal, province of Quebec. Simeon is a Master of Political Science from McGill University and a B.A. of Political Science and History.

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25 July 2002

Ukraine: Still not ready to welcome western baby-boomers

Recently I received many inquiries from people near the age of retirement living in the USA and other western countries about the residential investment possibilities in some Eastern European countries. The main question asked by the baby-boomers is "Can foreigners benefit from these new market economies to buy a house to be used as a safe investment and/or principal or secondary residence after their retirement?" Some of the inquiries named specifically Ukraine, a former Soviet Union republic, whose leadership recently made some statements about a possibility of becoming a NATO member.

A large market that keeps investors out

There are many unknowns in Ukraine that prevent the country from fully developing its economic potential as a bridge between Western Europe and Russia. The country's legal and title-registration systems still pose considerable challenges to any foreign investor. A number of factors contribute to uncertainty on the real estate market in this country. Among them is the lack of clear rights of ownership (sometimes it's virtually impossible to verify whether are you the true owner). Every investor, large or small, wants to be sure that s/he deals with the real owner but in Ukraine still the ownership is too hard to verify since the record of real estate transaction is only partially available to the public. Unlike many western countries, it's impossible to establish a clear chain of title in the country.

Some properties with a history of sales present a risk to investors, who can lose their investment after court rulings if some earlier sale of the same property was declared invalid. There were some cases of investors losing their properties just because of the problems related with the previous title transfers.

Additionally, real estate agents in the country also cite corruption, red tape and inconsistent legislation as factors that repel investors. The major problem standing between people and their dreams if they wish to build isn't even the time for obtaining permits. The real problem is that they can't predict how many permits they will need. There is no publicly available list of what is needed and the system of granting permits isn't transparent, many complain on the ground.

Die Hard: Next generation

If all that has been said before doesn't discourage you and you still stick to your plans to buy a property in Ukraine, then there is some practical advice to follow.

First, to sign a contract for buying a real estate in this country (if you are a foreign national), you have to have legal status being in Ukraine. This means that you have to get a visa or (if you are a national from a country that doesn't need a visa) you have to be registered by local authorities if you have stayed in the country for more than 3 days.

Second, there are restrictions for foreigners, who can't buy land for agricultural purposes. But they can own any other real estate and the land upon which this property is located.

Third, always remember that the laws in Ukraine are changing constantly so be sure that you know your rights and responsibilities, which are today in force, not yesterday.

Forth, you have to obtain several documents from the current owner or copies from the state archives: previous sale-purchase agreement, gift agreement or privatization certificate; technical characteristic which is equivalent to a title; a certificate that the property isn't being used as collateral and has no arrests placed on it and also some other documents that your agent will suggest to you to have on hand.

Fifth, the buying agreement can be made at one of three places - a government notary public, a private notary public or a commodity exchange and the contract must be notarized with a witness present.

Sixth, the contracts for residential real estate are registered with the building management or ZhEK. The transfer of title becomes effective when the sale-purchase documents are registered.

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See also the directory of companies providing real estate services in, and general real estate information of Ukraine.

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