Buying land with a change of purpose – risks and advice for investors

Main points

  • Purchasing a land plot with a change in its intended purpose is a risky investment that requires thorough legal analysis and verification of urban planning documentation.
  • The process of changing the intended use can be complex and time-consuming, and even after a successful change, there may be restrictions that make it difficult to use the site.

How to buy land / Photo Pixabay

Buying a plot of land with a change of purpose may seem like a profitable investment, but it hides many risks. Experts advise carefully checking all the legal nuances before concluding a deal.

Urban planning documentation and its role in changing the intended purpose

Lawyer Yuriy Barda, in a comment to Channel 24 , said that buying a land plot is always a rather risky investment that requires a balanced approach, taking into account all legislative nuances. One should be especially careful if the buyer plans to change its intended purpose, for example, from agricultural land to industrial land.

He emphasized that despite the widespread belief that this is just a formality, in practice the process can be complicated, lengthy, and may not always be successful for the owner of such an asset.

The key documents to consider before purchasing a plot of land are the locality's master plan and zoning plan. They determine how a particular plot of land within a locality can be used.

If the land is located in a zone designated for residential or commercial development, the chances of a change of use increase significantly.

Yuri Barda

Lawyer at the law firm “Marusyak and Partners”

Then it is worth finding out what the specific purpose of the land plot is. This information can be obtained through the electronic services of the State Geocadastre by ordering an extract from the State Land Cadastre. Obtaining an extract is free of charge, authorization is carried out in any way convenient for the user – in particular, using an electronic digital signature or BankID.

The least problematic in changing the intended purpose, according to the lawyer, are lands within the same category, for example, from 02.01 For the construction and maintenance of a residential building, outbuildings and structures (homestead plot) to 02.04 (for the construction and maintenance of temporary residence buildings). In contrast, the intended purpose of lands of the nature conservation, forest or water fund is practically not subject to change.

Yuriy Barda notes that such a change does not even require the development and approval of technical documentation for the land plot. For example, the algorithm for changing the purpose of a land plot in the city of Lviv from code 02.01 to 02.04 is as follows:

  • applying to the Department of Architecture and Spatial Development of the Lviv City Council to obtain an extract from urban planning documentation – administrative service “Provision of an extract from urban planning documentation”;
  • applying to the land management organization with a notarized application for changing the purpose of the land plot;
  • The land management organization applies with a package of documents to the Main Department of the State Geocadastre in the Lviv region regarding amendments to the State Land Cadastre regarding a change in the purpose of the land plot.

Risks that exist even with successful repurposing

Even in the event of a successful change of purpose, there may be restrictions that will make construction or certain economic activities impossible. These include protection zones for utility networks, coastal protection strips, easements, and the presence of architectural monuments on such a land plot. All of these factors need to be checked in advance.

It is important not only to change the purpose of the plot, but also to assess its practical suitability for construction. The presence of an entrance, access to electricity, water and sewage all affect the final cost and feasibility of the investment.

Please note! Changing the purpose almost always requires the development of a land management project, its approval at a session of the relevant local council. The process can take from several months to several years. In practice, situations often arise when approaches to the interpretation and application of legislative norms in communities can differ significantly, as a result of which citizens are forced to resort to initiating legal disputes.

What are the main points to remember?

So, the main risks before buying a land plot are:

Before concluding an agreement, it is advisable to consult with a land surveyor or a lawyer in the field of land law,
– advises the lawyer.

Such a check will allow you to assess the compliance of the plot with urban planning documentation, the presence of restrictions and real chances of changing its purpose. Ignoring this step in practice often leads to situations where the purchased plot cannot be used for its intended purpose, and the owner is forced to spend years on approvals or litigation without a guarantee of the result.

Using someone else's land: what rights are needed and what are the consequences for violation?

  • To legally use someone else's land in Ukraine, you need an appropriate legal right, which must be registered by the state.

  • Illegal occupation of land may result in fines or criminal liability, including for unauthorized occupation.

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