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Partner, JN Legal
Address: 16 Tarasa Shevchenka Street,
Kyiv, 01001, Ukraine
Tel.: +380 44 364 4005
JN Legal is one of the top Ukrainian law firms, providing a full scope of top-notch legal services. The firm’s employees possess deep knowledge and special focus in corporate law, litigation, land law, real estate, construction and mediation, thereby providing its clients with the best possible services. The efficiency and professionalism of employees help clients in such industries as FMCG and retail estate and construction, Infrastructure, HoReCa as well as private clients and state bodies.
The firm possesses strong “out of the box” thinking and a creative approach, enabling it to solve the most complex tasks. Every year since it was founded, JN Legal has been recognized by its clients and the industry as one of the best legal companies in Ukraine in land law, development and construction, receiving the most prestigious professional excellence awards in Ukraine.
The focus of JN Legal is the success of clients, and all solutions are tailored with that principle in mind. Following this approach, JN Legal strengthened its team in 2021 with non-legal specialists to create a new product for its clients which combines project management with technical supervision by assisting the streamlining of large projects.
Urban Planning Risks of a Land Plot Being Located Within a Coastal Protection Strip
Land located near a river or pond is a very attractive object for developers and potential property owners. However, the rather strict legal regime for the use of such lands within coastal protection zones (CPZ) determines the main problem of their urban development. Amendments to legislation on the legal regime of CPZ lands made in July 2021 only slightly moved away from solving this issue.
First of all, the current legislation does not directly provide for the possibility of acquiring the right of ownership of CPZ land. It is regulated by the Water Code of Ukraine that such lands are in state and communal ownership and can be leased only for certain purposes, as defined by law, which are extremely limited to the fulfilment of urban planning intentions on commercial construction.
Therefore, in the resolutions of 12 June 2019 in case No. 487/10128/14-ц and of 11 September 2019 in case No. 487/10132/14-ц, the Grand Chamber of the Supreme Court of Ukraine determined that the land plot occupied by the CPZ not only cannot be purchased as private property, including for construction, and cannot be leased for the construction and maintenance of an individual residential building and farm buildings. All the risks associated with the same shall be borne by the purchasers of such land plots, since due to the external, objective, obvious and visible natural features characteristic of water fund lands they couldn’t help but know about the actual location of the corresponding plot, and having shown reasonable prudence, having familiarized themselves with the content of the legislation and, if necessary, having received legal assistance before acquiring ownership of this plot, could and should have known that the specified plot belongs to the lands of the water fund.
At the same time, in the context of urban planning activities, the decision of the Supreme Court of Ukraine of 1 November 2021 in case No. 400/2932/20 and of 26 October 2021 in case No. 400/2936/20 is extremely interesting, in which, taking into account the peculiarities of the relevant provisions of both land and water legislation, it was concluded that the presence of the CPZ doesn’t indicate the automatic assignment of the land plot on which such CPZ is located to the lands of the water fund, if it belongs to the lands of another category. As a result, in case No. 400/2932/20, it was recognized as illegal to refuse to issue a permit for construction works, which was justified by the permitting authority by the need for the developer to obtain an environmental impact assessment, since the construction site within the CPZ is land that belongs to the water fund.
The second important factor in assessing the risks of a plot of land within the CPZ is the special legal regime for carrying out economic activities on them – stricter than on the rest of the territory of water protection zones, of which they’re a part.
Therefore, land plots of the CPZ can be leased exclusively for haying, fishing needs, cultural and health, recreational, sports and tourist purposes, for carrying out scientific and research works, as well as for the care, accommodation and maintenance of port infrastructure facilities and hydrotechnical structures.
At the same time, the legislation prohibits the construction of any structures (except hydrotechnical, navigational, hydrometric and linear, as well as engineering and technical, fortification structures, fences, border signs, border crossings, communications) in the CPZ along rivers, around reservoirs and on islands, including recreation centers, cottages, garages and parking lots.
With the adoption of Law of Ukraine No. 1423 of 28 April, 2021, as from 27 May, 2021 the reconstruction, restoration, and overhaul of existing facilities are finally allowed on CPZ lands. However, these changes didn’t affect the CPZ along seas, sea bays and estuaries and on islands in inland sea waters. On them, as before for all the CPZ, it’s possible to build only military and other defense facilities, namely facilities that produce energy using wind, sun and wave energy, facilities for the supply, distribution, transmission (transportation) of energy, as well as sanatoriums, children’s health camps and other medical and health facilities with mandatory centralized water supply and sewage, hydrotechnical, hydrometric and linear structures.
The establishment of such restrictions about construction on lands within the CPZ, as a rule, nullifies urban planning initiatives for their commercial development, which is also confirmed by established judicial practice in this matter.
Therefore, in the resolution of 26 June, 2019 in case No. 814/2389/15 the Supreme Court based on the fact that the object planned for construction doesn’t belong to the list of those expressly defined by law as possible for construction within the CPZ concluded that since the purpose of the disputed land plot doesn’t allow the construction of a complex for tourism, and the plot itself is located in the Black Sea CPZ, the authorized body rightly refused to grant permission for the development of a detailed plan of the territory of this plot of land in accordance with the urban planning intentions of its owner.
At the same time, despite the above-mentioned regulatory restrictions, the banks of rivers and reservoirs continue to be built up, which indicates a certain law-enforcement practice that has developed on this issue in view of the gaps and somewhat ambiguous interpretation of legislation in this area.
In this sense, it’s appropriate to focus on several aspects of such practice, illustrating it with relevant court decisions.
1. Setting of Special Output Data to Determine the Width of CPZ
The legal minimum width of the CPZ is determined for one or another water body taking into account the “water cut”, which is the water limit on the shore of the water body (shoreline) which is unstable and depends on both natural and anthropogenic factors) and the “limited period” (this is a period of the annual cycle with low water content). Establishing them appropriately can be of crucial enforcement importance.
Therefore, in the resolution of 1 August, 2019 in case No. 2340/4493/18 (its cassation review was refused), the Sixth Administrative Court of Appeals concluded that a normal support level should be used when drawing up the Land Management Project which can be maintained for a long time under normal conditions of operation of hydraulic engineering structures, and not the water level of the so-called dead volume, i.e. the minimum level admissible under the conditions of normal operation of hydraulic structures, which corresponds to the level of the water cut in the limit period. The court justified this decision by the fact that if the minimum level is taken into account, there will be a significant reduction in the width of the CPZ, and this in turn may lead to economic activity in the nature protection zone, which is prohibited by law.
In the Resolutions of 5 June, 2019 in case No. 806/3602/15 and of 10 July, 2019 in case No. 806/3709/15, the Supreme Court giving a legal assessment to the technical report submitted by the plaintiff in support of his/her arguments about the location of the land plot outside the 50-meter CPZ, drew attention to the fact that it was made not in the borderline period (summer months), but in the period of autumn rains which excludes the possibility of correct measurements of the width of the CPZ, which should be carried out in a period of low water. As a result, the claim was rejected.
2. Manipulative Interpretation of the Status of One or Other Water Fund Object or Type of Object under Construction in the CPZ
According to current legislation, the minimum width of the CPZ of rivers is determined by the type of river they belong to – large, medium or small rivers which differ in the size of the catchment area of their basin.
Currently, the list of large and medium-sized rivers can be found on the website of the State Water Resources Agency of Ukraine (https://www.davr.gov.ua/fls18/RTR_f.pdf) and, according to its data, eight large rivers and 86 medium rivers have been identified in Ukraine. Accordingly, all other rivers belong to the small variety.
At first glance, everything seems clear. However, some rivers have branches, straits, canals or bays in certain parts of their sections which in view of their historical or toponymic names, gives reason to try to define them as separate, independent bodies of water that do not belong to the river itself, but are separate rivers with the status of a medium or small river and, accordingly, with a smaller width of the CPZ.
In particular, it’s appropriate to mention the rather high-profile resolution of the Supreme Court dated 7 November, 2019 in case No. 826/4437/15, in which the developer insisted that the Desenka River which divides into the Venetian and Rusanivska Straits, is a branch of the Desna River, and therefore is classified as an independent middle river and the width of the CPZ in relation to it should be 50 metres. In turn, the prosecutor’s office claimed that the land plot of the development is located in the CPZ of the Rusanivska Strait which isn’t a separate river, but a section of the huge Dnipro River, and therefore a CPZ that is 100 m wide. At the same time, each of the parties referred to the conclusions of specific state and project institutions to confirm their statements.
As a result, the Supreme Court gave a rather original assessment to such arguments by the parties, noting that “the inconsistency of the positions of the subjects of the authorities, set out in their explanations regarding the classification of the Rusanivska Strait to the elements of large rivers, the Dnipro and Desna, or the middle river – Desenka, doesn’t give grounds for the conclusion that at the time of issuing the contested permit the defendant acted illegally since at the time of its issue, the specified issue wasn’t disputed and it was believed that the land plot on which the construction is planned is located in the channel of the middle river, where the CPZ is 50 meters from the water cut”.
In resolution of 29 April, 2020 in case No. 810/4566/17, the Supreme Court recognized that the absence of information on the State Water Cadastre website regarding the river’s belonging to water fund objects doesn’t change the legal status of such a water object, provided that it actually exists which by virtue of the law stipulates both the presence of a CPZ and the obligation to indicate information about such a CPZ in urban planning conditions and restrictions.
In another case, the Supreme Court agreed with the decisions of the courts of previous instances, which came to the correct conclusion that the defendant’s statement that the water storage basins built by him within the CPZ are hydraulic structures is erroneous and, therefore, their construction was illegal (resolution dated 22 April 2019 in case No. 806/11/16).
3. Use of Legislative Norm on the Establishment of CPZ Taking into Account Urban Planning Documentation, the Approval of which Belongs to the Exclusive Competence of Local Councils
In this way, deviating from the normative indicators of the width of the CPZ is actually legalized by justifying the expediency, necessity or possibility of this when approving the relevant urban planning documentation, taking into account the actual or prospective urban planning situation in one or another territory.
In particular, in the resolution of 4 December, 2019 in case No. 642/3642/17, the Supreme Court didn’t take into account the arguments of the prosecutor regarding the need to take into account the regulatory width of the CPZ in 50 meters for the Lopan River within the city of Kharkiv, which is an average river since according to the current master plan of the city the width of such a CPZ is set in 25 meters.
In the resolution of 16 December, 2021 in case No. 420/6907/20, the Supreme Court rejected the complainant’s reference to the legal conclusions of the Supreme Court according to which the CPZ are established regardless of the presence of a land management project, and the existence of the CPZ of a certain width is provided for by mandatory provisions of the law. At the same time, it concluded that the size and boundaries of the CPZ within population centers are established taking into account urban planning documentation, and in this case, the land plot, according to the urban planning documentation, is located at the local level in the landscape and recreation areas, and not within the CPZ.
At the same time, if the issue of establishing the CPZ is not resolved in urban planning documentation then the design documentation for the construction of objects must comply not only with the provided urban planning conditions and restrictions on the development of the land plot, but also with the requirements of legislation, building regulations, state standards and rules, particularly regarding the observance of conditions and restrictions on the use of the territory for urban planning needs within the defined zones with the aim of creating favorable conditions for human life, ensuring the protection of territories from emergency situations of both man-made and natural characters.
This was the conclusion reached by the Supreme Court in the resolutions of 27 May, 2021 in case No. 813/814/18, noting that although there are no planning restrictions, in particular CPZ, in urban planning conditions and restrictions the developer was obliged to comply with the then-current DBN 360-92 Urban Planning. Planning and Construction of Urban and Rural Settlements, and its failure to take this into account during the construction of the CPZ due to the lack of a land management project for its installation, was considered illegal.
By way of summary, it should be noted that despite certain positive legislative changes the current legal regime related to CPZ continues to cause significant risks for the implementation of commercial urban development activities on land plots located within their boundaries. The use of certain loopholes in legislation in this area to legitimize development of CPZ is rather an exception to the general picture. In view of this the need for further improvement of legislation in the field of CPZ is obvious so as not only to ensure compliance with the principle of legal certainty, but also to create the conditions for a civilized combination of the business interests of developers and the public interest in the protection of the natural environment and environmental safety.