Appraisal of property in Ukraine
3 July, 2007
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The main law regulating appraisal activity in Ukraine is the law “On appraisal of property, property rights and professional appraisal activity” from 12.07.2001.
According to the law the following persons carry out the appraisal activity in Ukraine:
- Natural and legal persons involved in economic activity that obtained a certificate of a subject of appraisal activity;
- Bodies of state and local authorities that are authorized to carry out appraisal activity in the process of fulfillment of functions of management and disposal of state or communal property and that include appraisers.
It is important to note that appraisals can also be carried out by court experts. The appraisal activity of court experts is performed with accordance to the conditions and procedure stipulated by the law of Ukraine “On court expertise” from 25.02.1994.
The appraisal of property is carried out on the basis of:
- agreement between appraiser and customer;
- court judgment on impose of relative expertise of appraisal of property.
If the appraisal by state or local authorities is stipulated by the law the appraisal is performed independently on the basis of the order of the head of the body. In case the law stipulates an obligatory independent appraisal of property the state and local authorities are customers of such appraisal and conclude agreements with appraisers determined on a competitive basis in the order settled by law.
The agreement is to be concluded in writing. The customers of the appraisal can be owners of a property of their representatives. A customer is to provide access to a property to be appraised and all necessary data of an object. Under the law the essential conditions of the appraisal agreement are the following:
- specification of a property to be appraised;
- purpose of appraisal;
- type of value of a property;
- date of appraisal;
- date of execution;
- rate and procedure of payment;
- rights and duties of parties;
- terms of confidentiality;
- responsibility of parties;
- settlement of disputes.
Appraisal is obligatory in the following cases:
- establishment of a company on the basis of state or communal property;
- reorganization, bankruptcy, liquidation of state, communal enterprises or enterprises with state or communal property share;
- apportionment or determination of share in joint property which has state or communal share;
- determination of value of contribution of sharers and incorporators of companies, if a contributed property is state or communal; retirement from such company;
- privatization and other alienation in the cases of lease stipulated by law, insurance of state and communal property and restitution of this property on the basis of court judgment;
- reappraisal of fixed assets for accounting purposes;
- determination of damages and amount of compensation.
An independent appraisal is performed for purposes of surrender of property, financing, taxation, insurance, financial planning, contribution to the authorized capital, registration of pledge (mortgage), cancellation of partnership, change of the fixed assets value in the accounting, investigation of projects feasibility, determination of rates and tariffs.
An independent appraisal is obligatory in the following cases:
- pledge of state or communal property;
- alienation of state and communal property be means not providing competition of buyers or in case of sale to one buyer;
- determination of measure of damages or amount of compensation.
The above is intended to provide a brief guide only. It is essential that appropriate professional advice is obtained. Our company will be glad to assist you in this respect. Please do not hesitate to contact us.
