The Supreme Court upheld the legality of Kyiv City Council's termination of a land lease agreement for a park on Zhmachenko  Street with a religious community that planned to build an apartment building on the land

The planned construction of a residential apartment building by a religious organisation on a leased communal land plot, which is classified as public development land (for the construction and maintenance of buildings of public and religious organisations), is a violation of the intended purpose of the land plot.

If the parties have agreed in a land lease contract that the use of a plot of land for a purpose other than that for which it was intended is a ground for unilateral termination by the lessor, the decision of the City Council by which it has exercised such a right in the disputed legal relationship is lawful, valid and cannot be set aside.  

This conclusion was reached by the Commercial Cassation Court of the Supreme Court in the case of the Christian Hope Church's claim to invalidate the Kyiv City Council's decision to terminate the land lease agreement concluded between them and grant it the status of a park.

In 2000, the Christian Hope Church acquired an incomplete structure located on General Zhmachenko Street in  Kyiv. In order to complete the construction of the acquired facility, the plaintiff entered into a land lease agreement with the City Council, which stated that the purpose of the land was for the reconstruction, operation and maintenance of a spiritual and charitable complex. At the same time, in accordance with the urban planning conditions and restrictions on the design of the site, the church planned not only to complete the construction on the site, but also to adapt it into a "multifunctional complex", which would include the construction of both religious buildings (a church, a prayer centre) and a residential apartment building.    

The City Council decided to terminate the lease unilaterally, believing that the Church had breached its obligations under the lease, and in particular the purpose for which the land was intended.   

The lower courts granted the request, stating that the law allows the construction of multifunctional buildings consisting of premises, groups of premises, buildings and structures for various public and residential purposes on a plot of land whose use is related to the placement of public buildings.

The Commercial Cassation Court overturned the contested decisions of the lower courts and issued a new decision dismissing the claim. 

Referring to the settled judgments of the Supreme Court, the Court observed that the law makes a distinction between the assigned uses of residential and public land. The construction of residential buildings should not be allowed on land classified as public development land according to its functional purpose, as such land is intended to serve public interests (for the location of public buildings and structures - hotels, office buildings, commercial buildings, public performances, museums and libraries, educational and research institutions, hospitals and health care facilities, etc.), but not for residential development.

The intention to use a plot of land within a certain land category must be in accordance with the urban planning and land management documentation. The development of a land plot is carried out within the limits of its intended use, which is determined by the urban planning documentation at the local level, in accordance with Article 24 of the Law of Ukraine "On Regulation of Urban Development".

The lower courts found that the disputed land belonged to the category of land - residential and public development land, the intended use - 03.04. for the construction and maintenance of buildings of public and religious organisations, the type of land use - for the reconstruction, operation and maintenance of a spiritual and charitable complex.

At the same time, following the General Plan of the City of Kyiv and the draft planning of its suburban zone for the period up to 2020, the functional purpose of the disputed land plot is the territory of public buildings and structures.

It follows from the circumstances of this case that, contrary to the above-mentioned provisions of the current legislation of Ukraine and the General Plan of the City of Kyiv, the Christian Hope Church is going to build not only a spiritual centre but also an apartment building on publicly-owned land, so there is every reason to believe that in the disputed legal relations it is using the leased land for purposes other than its intended purpose, and such actions are certainly not in good faith. 

The Commercial Cassation Court of the Supreme Court also held that since the parties to the disputed land lease agreement provided for the lessee's obligation to use the leased land for its intended purpose, and the lessee had materially breached such an obligation, the Kyiv City Council had every right to unilaterally terminate the transaction, as the parties had also provided for the lessor's right to do so in the lease agreement.

The Supreme Court also noted that despite the grounds for unilateral termination of the lease agreement by the Kyiv City Council, the religious organisation retains the right to register land use for the property it owns in accordance with the Land Code of Ukraine. Therefore, it has the opportunity to complete the construction of the spiritual centre, use its property for its intended purpose and continue to peacefully own it.

The Resolution of the Commercial Cassation Court of the Supreme Court of 18 October 2023 in case No. 910/20745/20 - https://reyestr.court.gov.ua/Review/114291950

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