The Government has approved new form of standard state property lease agreements

On August 12, 2020, the Cabinet of Ministers of Ukraine adopted the Resolution “On Approval of Standard State Property Lease Agreement”developed by the State Property Fund of Ukraine.

So, this Government Resolution approves 2 new standard forms:

-         a standard lease agreement for a single property complex of a state enterprise, its separate structural unit;

-         a standard lease agreement for real estate, other individually identified property belonging to state property.

Approval of new forms of standard lease agreements opens up the possibility for landlords to publish in the electronic trading system Prozorro.Sale announcements for the transfer of state and municipal property for lease, as well as to renegotiate lease agreement having expired and can be extended without auctions.

So, from the moment of the publication of the mentioned Government Resolution the lease process will finally be launched according to the new procedure provided by the lease law which came into force on February 1, 2020. There are no other barriers for this.Prozorro.Salesystem is ready to restart the lease under the new rules.

The innovations introduced by the new Law on lease, as well as the new Regulation on lease, are taken into account in the logical structure of the new standard agreements.

The list of the main innovations of the approved forms of standard agreements in comparison with the previous standard agreements includes the following:

-         from now on, the lease agreements becomes tripartite (previously bilateral) and thus the balance holder (third party) becomes a full participant in the lease relationships from state part and is endowed with rights and obligations to protect state property;

-          a draft standard agreement introduces an advance payment and a security deposit, which the winner of the auction must pay to the state budget, the balance holder and the landlord before concluding the lease agreement. These payments will be considered as a guarantee of the winner’s solvency, and then a guarantee of ensuring the rights of the state;

-         a tenant has the opportunity to demand early termination of the agreement if he has evidence of significant non-compliance of the leased object with the stated information about him, as a result of which the tenant will not be able to use the object or begin repairs.