Bribe an official, and you are a “bona fide purchaser”! Is this approach fair?
The scandalous story with businessman Igor Mazepa, whom the State Bureau of Investigation accuses of land fraud, has disappeared from the news, but has its consequences. A number of bills have been registered in the Verkhovna Rada, the purpose of which is to defend the interests of unscrupulous businesses. All these initiatives are written in the same vein.
Anyone can be guilty of schemes involving the alienation of state or community property: a deputy, an official, but not the one who ultimately received it. We can talk about a site of a natural reserve fund, or a part of the coast, which becomes private property. It is clear that such property cannot be privatized by everyone, but only by a select few. And these “selected ones” often motivate and encourage deputies and officials to make such decisions. But, of course, no one wants to answer for this later.
Considering the number of such initiatives and their simultaneous appearance in parliament, we can say: we are all witnesses of ultra-tough and undisguised lobbying. According to people's deputies, all these similar initiatives could even be combined into one project. If this happens, it will be a “monster bill.”
We are talking primarily about the initiative of “Servant of the People” by Stepan Chernyavsky (11185), which the “Igla” initiative already wrote about earlier in a material for “Glavkom”. Here, we recall, legislators propose to “nullify” claims against developers if the site has been in their ownership for five years or more. The registration of the project miraculously coincided in time with the media campaign of businessman Mazepa, who, in essence, promotes the same thing that deputy Chernyavsky and his colleagues propose.
With this, several more initiatives emerged (11134 and 11135). Their co-authors convince that law enforcement officers can abuse the current norms of the Civil Code and therefore propose not to take away property from the owner, but to bring to justice those who illegally distributed this property, for example, deputies of local councils. But the populist decision to punish only deputies leads to schemes that law enforcement officers and courts will not be able to stop.
What do deputies want to change?
The state and communities have property that can never be private property - this is, for example, Sophia of Kiev, nuclear power plants, the coast or a natural reserve fund. And even if someone managed to register such property in their own name, then at any time, through the court, authorities, local governments and prosecutors can return such objects to the community or the state. There are no statutes of limitations here. There is a special method of defense for this, which is called a negative claim.
And there is property that citizens or legal entities can receive into private ownership. This is, for example, agricultural land or, say, some buildings and the like. And here the question may arise as to whether the owner is really a bona fide purchaser: whether he received the property as a result of a scam or another scheme. And if government agencies have evidence that such property was registered in bad faith, the authorities go to court to defend such property. This method of defense in court is called vindication. And here the statute of limitations already applies.
Developers are not happy with this, that there is property that the state or community can return at any time through the courts. Therefore, here they have two tasks: to limit the statute of limitations or to change the method of protection for natural reserves and coastal strips and to “repack” the articles of the Civil Code so that what can be protected and returned at any time can be transferred for vindication, where the time frame for protecting the property of the state and communities is limited.
People's Deputy Igor Fris (“Servant of the People”), who is a co-author of two initiatives (11134 and 11135), explains that the main goal of these legislative initiatives is to protect the property of a bona fide purchaser: “We are not talking about who simply received a plot or some then he didn’t pay for the property. We are talking about someone who bought it for money from someone under an appropriate agreement. So such an acquirer must be protected. And there must be responsibility for those officials who distribute property that cannot be private property. If there is criminal liability for such actions, then they will think about whether to make schemes or not. Well, regarding the fact that someone there could be naked, barefoot and transfer the property so as not to compensate for losses. The court will order such a person, if he is guilty, to pay from what he will earn in the future. And the first bona fide purchaser must be the one who buys. Of course, we are not talking about property that cannot be privatized - nuclear power plants, the coast or a natural reserve fund. If someone buys a nuclear power plant, it will be taken away from him.”
Lawyer of the public initiative “Golka” Yuri Melnik shows what in the legislative initiative one should first of all pay attention to: “If you look at the last sentence that is proposed to be introduced into one of the articles of the Civil Code (Article 388), then it is clearly visible that there are in view of the coast, forests, natural reserves, and all this can be taken into private ownership. Based on this norm, if the Verkhovna Rada supports it, developers will have a real chance of getting something they couldn’t before. And then they will say: “We are bona fide purchasers.”
The Research Directorate of the Verkhovna Rada of Ukraine also focuses on the risks of the project in its conclusions: “The consequence of the implementation (of this proposal - “Glavkom”) is the possibility of the actual legalization of various kinds of schemes under which state and municipal property is transferred to private ownership on the basis of illegal decisions , actions, inaction of a public authority... As a result, the buyer becomes the owner of the property, who will have the status of a bona fide purchaser, and the state and the corresponding territorial community are deprived of the right to claim from such a purchaser communal property alienated on the basis of illegal decisions.”
Also, the Civil Code proposes to introduce a rule on the obligation to seek criminal prosecution of guilty persons, although the Civil Code does not regulate these issues. There is another code for this - the criminal code. In several places in different draft norms it is said that officials are held accountable, which can be positively perceived by society. But along with this norm, they can introduce the most important and less noticeable for society - new rules of the game.
Supreme Court Judge Victor Prophet notes that in such cases it will be very difficult to prove intent: “To really bring an official to justice, you need to prove his intent to commit illegal actions, which is almost impossible. Quite often it is difficult to prove whether an official deliberately “dispossessed land” or tried to develop infrastructure. Ideally, the design of the proposed changes looks nice - it will hold people accountable, but in practice, with the exception of some striking cases, it will be almost impossible to implement. Therefore, now such demands are in line with criminal prosecution. If we talk about legislative changes, then it is necessary to provide by law that property that is obviously illegally transferred from the state/community is returned without any time limit. A person who becomes the owner of a plot cannot help but understand that there is a river nearby or fail to see a forest on the plot.”
In addition to bringing to justice officials or deputies who illegally transferred property into private ownership, the authors of the project propose that the perpetrators compensate the losses to the state. First, the perpetrator may not have assets worth the amount that the state or community should receive as compensation. Stories about politicians and officials in the “mom loves speed” style, when property is transferred to relatives, are known throughout the country.
And secondly, when we are talking about objects that can never be private property (Sofia of Kiev, natural reserve fund, etc.), then determining the amount of compensation in such cases is unrealistic. If the state or community cannot reclaim such property at any time, it will lose the use of it forever. Not only will he lose the right, but sometimes the object itself will lose, such as, for example, archaeological monuments, which are non-renewable objects. After all, the development of areas with archaeological monuments means the loss of entire layers of history.
In the interests of developers, the Civil Code was changed during the time of the state traitor Yanukovych. Then the provision on the non-application of statutes of limitations in relation to decisions of authorities and local self-government was excluded. The attempt of legislators of the previous term to change this was not realized. The project of people's deputies of the previous convocation Igor Lutsenko and Ostap Yednak (4521) was never considered.
Despite this, the Grand Chamber of the Supreme Court in recent years has developed judicial practice that allows coastal strips and property to be returned, based on another article of the Civil Code, which representatives of the mono-majority are now also trying to change with the already mentioned project of People’s Deputy Chernyavsky (11185).
Bona fide purchasers and seizure of property
In one of the two projects that MP Fries and his colleagues submitted (11134), parliamentarians propose to amend not only the Civil Code, but also the Criminal Procedure Code: to prohibit the seizure of property when considering civil suits if it is in the possession of a “bona fide purchaser” .
The people's deputy explains why such a proposal appeared: “It happens that law enforcement officers take and initiate the imposition of 400-500 arrests on plots that were issued under Tsar Panka. In fact, property is often seized without involving a third party in the process, who may be concerned and who is in no way connected with the proceedings. In the text of the bill, this applies not only to third parties, but to everyone, because there are different stakeholders and, accordingly, different opinions. By the second reading, the bill may change and we may even reach a committee version.”
But the fact is that when the court imposes a seizure to secure a claim, it is not yet known whether the acquirer is in good faith, because the case has not yet been considered on its merits. The arrest is imposed so that while the court is considering the case and studying the evidence, for example, in the case of registering a plot in the forest, the developer does not have time to cut down trees and build high-rise buildings.
If this is not done and in the end it turns out that the forest fell into private hands illegally, then the forest may no longer exist, and the apartments/cottages will already be sold. Moreover, property can also be seized in cases where they want to recover funds from the plaintiff. If he manages to sell his property in order, say, not to repay the debt, then he will be able to do this without problems, because the court will never be able to impose a seizure.
And if the final provisions of the draft (11134) come into force, then all defendants whose property is currently under arrest can go to court and have such arrest lifted.
“Like Project 11185, these two initiatives are aimed at legitimizing the deforestation of protected areas. Well, how can there be a “bona fide purchaser” if the plot is located in the forest or on the coast? Moreover, the proposed changes will lead to the abolition of already seized land plots within the framework of existing criminal proceedings! For years, the prosecutor's office has been suing for the preservation of coastal strips or protected areas - but here they want to actually throw this work into a landfill. As for me, completely opposite changes need to be made here. Land taken out of circulation, endowed with natural characteristics or inextricably linked with sensitive protected objects. Of course, information about this should be in the cadastre, and entered there according to a simplified procedure,” says Petr Testov, an analyst at the Ukrainian Environmental Group NGO, indignantly.
If we talk about “bona fide” purchasers and seizures of plots, then it was thanks to this tool that the prosecutor’s office managed to save the Belichansky forest. And this not only helped preserve the ecocide of the capital. The forest helped shape Kyiv's defense line in 2022. The trial of these cases lasts more than 15 years.
In fact, in the conditions of digitalization, when there is a State GeoCadastre, land plots must have established restrictions on alienation so that property does not suddenly disappear from the ownership of the state or community and unnoticed by the owner - the state or community. And colossal resources – the work of prosecutors and judges – would not be spent on protecting such property.
And about. Chairman of the State GeoCadastre Dmitry Makarenko claims that most problems arise precisely because of insufficient filling of the cadastre: “The State GeoCadastre is responsible for state-owned agricultural lands and the state allocates funds for the inventory of state-owned lands. Here, the completeness of the cadastre depends both on the information provided by the Ministry of Defense and on the information provided by the Ministry of Natural Resources or the Ministry of Culture. As for other categories, information should be provided by state administrations, administrations of nature reserves, and the like. In addition, local government bodies should be primarily interested in making an inventory of communal property lands.”
Ecologist Testov notes that the State GeoCadastre should change its position and remember its controlling function: “Until 2021, the State GeoCadastre coordinated land management projects and conducted a land examination to change the intended purpose of such lands and allotment. Consequently, he had all the levers to make legal decisions. Why this was not done is not clear. It is necessary to oblige the State GeoCadastre to take into account not only what is included in the cadastre, but also forest management or water cadastre materials, and in general proceed not from the position of the information that is in the cadastre, but from what is actually on the land plot, what other Documents other than land management confirm the category of land. Then there will be no cases where an official allegedly simply “did not notice” the existence of a forest or reservoir, and now, because of his actions, a “bona fide purchaser” suffers,” Testov sums up.
The Specialized Environmental Prosecutor's Office emphasizes that limiting the limitation period to five years, as proposed by legislators, is a serious risk. This is emphasized by the head of the special environmental prosecutor’s office, Boris Indichenko: “In recent years, we have returned more than 32 thousand hectares of protected lands. The proposed changes will limit the right of the state and communities to protect violated rights. Moreover, the proposal to limit the statute of limitations for filing claims generally eliminates the possibility of restoring rights, in particular to a healthy, sustainable and clean natural environment. What to do with forests or protected lands that were alienated under Yanukovych? The proposed compensation procedure is unlikely to be effective, unlike the current one, which determines the obligation to return illegally alienated objects. Thus, the prerogative to dispose of land belongs to self-government bodies, which are collective institutions. The legislation does not provide for the procedure for collective responsibility of deputies, including financial responsibility, for the decisions they make. Therefore, the proposed rules on the recovery of damages from those responsible in such cases lose their meaning.”
Law enforcement officers note that such changes to the legislation will completely destroy the judicial practice that was formed by the Grand Chamber of the Supreme Court to protect the environmental interests of the state and communities.
People's Deputy Taras Batenko (For the Future) says that these two initiatives (11134 and 11135), which he also signed as a co-author, were already on the agenda, but they were removed: “There are two more similar projects (the already mentioned 11185 and 11233 – author’s note) and therefore I do not rule out that after discussions we will reach a committee version. We know that there are reservations regarding forests and water resources and we must take them into account, in particular, individual comments from government agencies and associations.”
At the same time, legislators note that with such changes to the law they seek to protect the property of a bona fide purchaser and improve the investment climate in the country.
Supreme Court Judge Victor Prorok notes that there is no critical need to “reinvent the wheel” to protect a bona fide purchaser: “Both the Civil Code of Ukraine and judicial practice already contain such mechanisms. If the property he acquired is taken away from a bona fide purchaser, he has the right to receive a refund from the seller of the money paid for it, and if he suffers other damage, he can compensate for it at the expense of the body whose illegal actions led to this situation.”
But the matter is not limited to these legislative initiatives. The “Servants of the People” project by Alexander Matusevich (9516), which allows for the felling of forests without conducting an environmental impact assessment and has serious corruption risks, is already on the parliament’s agenda and may be considered next week if this issue is not removed at the conciliation council .
