The main results after the date the new lease legislation was enforced

On February 1, 2021, one year had gone since the entry into force of the Law of Ukraine "On Lease of State and Communal Property" adopted by the Verkhovna Rada on October 3, 2019.

"The Law introduced new rules for the lease of public assets and launched a comprehensive reform of relations between the state, local communities and lease holders in Ukraine," said Leonid Antonienko, First Deputy Head of the State Property Fund of Ukraine.

After the entry into force of the new law, the transfer of state-owned real estate for commercial lease, as well as the extension of existing leases of state property provide mainly through e-auctions.

There are more than 2 million square meters of state-owned real estate vacant for commercial lease in the registers of the State Property Fund. More than 11,000 contracts will extend in the same way at e-auctions.

As of February 1, 2021, the Fund's regional offices have announced 1,612 lease auctions, 991 of which have already taken place. The average increase in the rental rate is 54% according to the results of e-auctions.

Along with changes in the mechanisms for leasing out objects of so-called commercial real estate, the mechanism for leasing state property objects outside the auction for preferential categories of tenants has also undergone significant changes.

Thus, if two or more applicants apply for state-owned real estate and according to law have the right to lease it without an auction such as public organizations, regardless of their status, must disclose the content of their activities and score a point for each of its parameters. The applicant, the total score of which will be higher, receives the object for lease.

"In this way, corruption schemes related to the manipulation of the applicant's status were blocked. Before these changes were introduced, any public organization, regardless of whether it was actually engaged in accordance with its statute, could obtain without any competitive procedure state real estate on a preferential basis, " - said the First Deputy Head of the State Property Fund.

He also noted the fact that due to the introduction of innovations, the demand on preferential lease of state property has decreased significantly. “In the year since the new Law came into force, the Regional office of the State Property Fund has adopted only one decision to put state-owned property in the list of the second type for the needs of privileged categories (except for budgetary institutions). The premises of 19.9 sq. m. are located in Kyiv, Velyka Vasylkivska Street, and are intended for a publishing office or book distribution company that provides preparation, production and distribution of at least 50% of book products in Ukrainian.

By comparison, during the same period of the previous year, more than 80 such agreements were concluded under the old legislation. These data show that the authors of the new legislation have achieved the raising of managerial efficiency of state property, which leased mainly at transparent auctions - almost without exception," explains Leonid Antonienko, commenting on the results of innovations in the lease of public assets.