Improvements to Urban Planning

On 8 February 2017, the President of Ukraine signed Law of Ukraine No. 1817 VIII On Amendments to Certain Legislative Acts of Ukraine Regarding Improvement of Urban  Planning (the "Law"), which will come into force on 10 June 2017. The Law is aimed at improving construction permitting procedures and bringing them in line with European standards. In particular, the Law will cancel the classification of construction projects according to their degree of complexity, change the list of construction permits and approvals, and increase liability for violations of the urban planning laws.

Main Developments

Replacement of construction projects classification based on complexity categories

The Law will abolish the construction projects classification based on complexity categories (the "Categories"). The Law provides that, for urban planning purposes, all construction objects will be classified based on the class of their effects (liability) (the "Classes") as follows:
  • insignificant effects projects (the "Insignificant Effects") covering current I and II Categories projects;
  • moderate effects projects (the "Moderate Effects") covering current III and IV Categories projects; and
  • significant effects projects (the "Significant Effects") covering current V Category projects.
The types of permits and approvals, project design expert review requirement, and commissioning procedure will depend on the project Class, rather than Category. The Law stipulates that a project design expert review will be mandatory for the Moderate Effects Class (covering current III Category projects). Such expert review will check, inter alia, whether or not the project Class was determined correctly.

Please note that, currently, construction objects in Ukraine shall fall into one of five Categories. As a general rule, a project design expert review is required for IV and V Categories projects.

The Law also lists the types of projects which in no event will fall into the Insignificant Effects Class. Such list includes, for instance, cultural heritage of national or local significance, projects to be developed within such cultural heritage protective zones, as well as residential buildings of more than four stories.

Changes to the list of permits and approvals 

After the Law comes into force, to begin construction of an Insignificant Effects Class project, a developer must send a notification to an authorized body instead of the construction works commencement declaration currently required. Construction works commencement declarations registered before 10 June 2017 will be valid until the completion of such objects' construction (except in the event of cancellation). The commissioning of such property will be performed by way of registration of the commissioning declaration.

A construction permit will be an approval document required for both Medium Effects Class (covering current III Category projects) and Significant Effects Class projects. The commissioning of any such project will be performed based on a commissioning act by way of the competent authority issuing the relevant certificate.

Please note that, after the Law comes into force, in case of any change or variation to the project design, the developer must notify accordingly the competent authority within three days.
Enhancement of liability

The Law will significantly enhance liability for violations of urban planning legislation. For instance, execution of any construction works on the Moderate Effects Class project without the relevant permit will be punished by a fine equal to 370 subsistence levels. At the moment, a penalty for such a violation (on a current III Category project) amounts to 90 subsistence levels.
Additional notes

This LEGAL ALERT is issued to inform Baker McKenzie clients and other interested parties of legal developments that may affect or otherwise be of interest to them. The comments above do not constitute legal or other advice and should not be regarded as a substitute for specific advice in individual cases.

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Serhiy Piontkovsky
Managing partner
Baker McKenzie
Lina Nemchenko
Baker McKenzie