LEGAL ALERT: New procedure of Lease of State and Municipal Property

NEW LEASE PROCEDURE

On June 17, 2020, the Procedure of Lease of State and Municipal Property (“Procedure”*) has entered into force.

Key things to know about the new Procedure:

The lease execution will be carried out through one of the following procedures:

• The general (main) procedure: all premises must be leased based on an auction (“Auction”), except for the premises that are directly covered by the out-of-tender procedure; and
• Out-of-tender procedure: lease of premises by the state/municipal authorities and entities, educational and scientific institutions, diplomatic offices, museums, religious organizations (and other similar entities) may be executed without an auction (“Out-Of-Tender Lease”); sub-lease of such premises is prohibited

Auctions (including bidding) and Out-of-Tender Lease will be carried out online through an online platform “Prodazhi” (“Prozorro”)

Prozorro will be publicly available and will contain the following information:

• list of premises which are already leased or are offered for lease
• prices, main terms and conditions of the already executed lease agreements
• information on Auctions and Out-of-Tender Leases, including all communications and document circulation (i.e. applications, resolutions, etc.), bidding, decisions of state authorities/lessors, etc.

Although the Procedure is already in force, Prozorro will be fully operable for Auctions/Out-of-Tender Leases only from October 1, 2020. Until then, all leases will be executed as before:

• information on Auctions and premises which are offered for a lease will be published in the official media and websites of lessors; and
• applications (including for Out-of-Tender Leases) and other documents will be submitted in paper or electronically directly to lessors/asset holders.

* adopted by the Regulation of the Cabinet of Ministers of Ukraine “On some Issues of Lease of State and Municipal Property” No. 483 dated June 3, 2020