On 17 January 2017 Verkhovna Rada of Ukraine adopted Law 1817-VIII "On Introduction of Changes and Amendments to Certain Legislation Acts of Ukraine regarding Improvement of Town-Planning Activity" ("Law"). The Law is signed by the President and will become effective on 10 June 2017. 

Changes introduced

Principal developments stipulated by Law:

• The Law classifies all construction objects by three classes of consequences (liability), instead of 5 existing complexity categories:
  • objects with insignificant consequences (covering I and II categories stipulated by current legislation);
  • objects with medium consequences (currently - III and IV categories); and
  • objects with significant consequences (currently - V category);
• Declaration on commencement of preparatory/construction works as a permissive document will be abolished. At the same time, the declarations registered before the Law becomes effective will be valid until the completion of the construction.

After the Law becomes effective the preparatory and construction works will be performed based on:

• notification on commencement of preparatory/construction works (for objects with insignificant consequences); and
• permit for performance of construction works (for objects with medium and significant consequences).

• Under current legislation only individual residential, summer, garden houses up to two floors high with an area up to 300 sq. m., as well as garages and utility structures on household plots may be constructed based on notification on commencement of preparatory/construction works. After the Law becomes effective this list will be supplemented with residential houses up to four floors high.

The main advantage of notification, compared to the declaration, is the possibility to commence construction the day after submission, whereas the declaration is subject to review and registration by the architectural-construction control authority (usually within five working days from the moment of receipt);

• According to the Law, the objects with insignificant consequences will be commissioned based on declaration on readiness for operation, and the objects with medium and significant consequences - based on certificate on readiness for operation. An architectural-construction control authority registers the declaration for free within 10 working days from the receipt. Unlike the declaration, a special fee should be paid for the issuance of a certificate based on the act of readiness for operation signed by the customer, general designer, general contractor (contractor), subcontractors and insurer (if the object is insured);   
• Chief inspectors of the State Architectural-Construction Inspectorate will be able to initiate an introduction of changes to (or cancellation of) town-planning terms and limitations (the document containing requirements for planning and development of the site) due to its incompliance with town-planning legislation or state construction rules. At the same time, the cancellation of town-planning terms and limitations may be a ground for termination of permit for performance of construction works. Currently, a power to cancel the town-planning terms and limitations is not vested with the inspectors;
• According to the Law a construction control, receipt of the notifications and issuance of construction permits, as well as declarations and certificates on readiness for operation will be performed by:
  1. the local architectural-construction control authorities regarding the objects with insignificant consequences within villages, towns and cities (except for regional centers and cities with populations in excess 50,000);
  2. local architectural-construction control authorities regarding the objects with insignificant and medium consequences within regional centers, cities with populations in excess 50,000, as well as in Kyiv and Sevastopil;
  3. the chief inspectors of the State Architectural-Control Inspectorate regarding any objects irrespective of class of consequences located outside the settlements, objects located in the territory of several administrative-territorial units, objects with medium consequences within villages, towns, cities (except for regional centers, cities with populations in excess 50,000, as well as in Kyiv and Sevastopil), as well as objects with significant consequences within the settlements.  
• Activity related to the construction of objects with medium and significant consequences will be subject to licensing. Currently, construction of objects of categories IV and V are subject to licensing. Because the Law classifies category III as objects with medium consequences, the contractors currently performing the construction of category III  objects without the license will be obliged to obtain the licenses. Such licenses are issued by the authorities of the State Architectural-Control Inspectorate;
• According to the Law, design documentation for all objects, except for the objects with insignificant consequences, will be subject to expertise. Currently, the design documentation expertise is mandatory only for objects of IV and V categories. Because the Law classifies category III objects within the class of objects with medium consequences they will be subject to mandatory expertise. The expertise will be conducted by an expert organization of any ownership form from the list of expert organizations formed by the Ministry of Regional Development and Construction (''Minregionbud'') or by a self-regulated architectural organization. The list of expert organizations will be published on the site of Minregionbud or authorized self-regulated organization.

Consequences

After the Law becomes effective, it will simplify the construction procedure for certain objects with insignificant consequences (residential houses up to 4 floors high and small administrative buildings). The Law will also permit construction of such objects based on the notification. This will allow the commencement of construction the day after submitting the notification.

The Law is targeted against the understating by the developers of the complexity category of an object from IV to III. The changes and amendments will principally affect the objects classified as III complexity category under current legislation. In particular, construction of such objects will be subject to licensing, and will require the obtaining of a permit for performance of construction works, with project documentation subject to mandatory expertise.

It is unclear whether the object of the III category of complexity, which construction was started without expertise of design documentation under effective Law, would require such expertise in order to be put into operation under the Law.

For further information, please contact anyone listed below, or your usual DLA Piper contact.