The Cabinet of Ministers has adopted the new Methodology for calculating the rent payment for state property
On April 28, the Cabinet of Ministers of Ukraine approved with a two-day revision the draft Resolution «Some Issues of Rent Payment Calculation» developed by the State Property Fund, which introduces the new Methodology for calculating rent payment for state property.
The Law on leasing, which entered into force on February 1, 2020, among other things, changed the categories of tenants who have the right to lease state property on preferential terms (i.e., without auction), at rental rates set by the Cabinet of Ministers of Ukraine.
At the same time, the new law stipulates that the first extension of any agreements, including commercial ones, takes place without an auction at rental rates, which are also determined by the Cabinet of Ministers.
The Resolution adopted by the Government approved the relevant rental rates.
Compared to the previous version of the Methodology, the following significant changes are being introduced:
• there is a reduction in the number of purposes for which leased state-owned real estate can be used. As a result, the conditions in which tenants operate in similar or identical markets are equalized. In this way, the effect of preventing distortions of competition due to unjustified provision of rental benefits is achieved;
• instead, rental rates are reduced for some socially important activities, in particular, private education (reduced rates three to ten times for private schools and private preschools, respectively), for tenants who involve young people in sports (a decrease from 17 up to 3 percent).
The adopted Resolution of the Cabinet of Ministers also makes a number of important changes to the Procedure for Leasing State and Communal Property.
Thus, first, a program to stimulate investment in the restoration of abandoned architectural monuments is being introduced. Tenants who have provided such restoration and completed restoration work on the leased object will be entitled to additional rental benefits. If the purpose of using the object is to create an educational institution or museum, the rent is reduced to 1 hryvnia per square meter per month.
Depending on the size of the investment in restoration work, the lease term can range from 15 to 49 years.
Second, approaches to determine the guarantee fee for participation in the auction are being improved. From now on, its size will increase for participation in auctions for attractive leases (in particular, in airport passenger terminals), and will decrease if the object with large area is located outside the regional centers or towns.
Thirdly, the procedure for granting exemptions and rent payment discounts for tenants affected by quarantine restrictions is simplified, in particular, such tenants receive a discount on the basis of an application without the need to amend the contracts.
Finally, the new Methodology establishes a mechanism for settling the issues of placement of religious organizations that use the property of religious buildings under loan agreements or other free use agreements, which are outside the legal field by law. Such organizations will have the right to renew these agreements into lease agreements at reduced rates.