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An additional agreement to a land lease agreement signed by the parties before 1 January 2013 (before legislative changes were made to cancel the need to register the lease agreement itself) shall enter into force for the parties to the agreement no earlier than its state registration, unless the parties in the text of the additional agreement link the moment of its entry into force to an event that will occur later.
This legal conclusion was made by the Grand Chamber of the Supreme Court.
A city council filed a lawsuit against an LLC to recover rent arrears and terminate a land lease agreement dated 25 January 2010 with termination of the right to lease a land plot. The plaintiff argued that since February 2020, the LLC has been improperly fulfilling its obligations to pay the rent under the agreement, in particular, paying it in a lower amount than agreed by the parties in the supplemental agreement dated 1 November 2011.
The court of first instance dismissed the claims, in particular, stating that the supplemental agreement dated 1 November 2011, by which, according to the plaintiff, the parties increased the amount of rent, did not enter into force due to the lack of state registration, which was required by the legislation in force at the time of the supplemental agreement.
The court of appeal partially upheld the claim: it terminated the lease agreement and recovered the rent arrears from the LLC in favour of the city council.
The Grand Chamber of the Supreme Court stated that an additional agreement by its legal nature is a transaction that amends an existing agreement. With the help of such a legal instrument, the parties can change their previous agreements, which are expressed and recorded in the terms of the main agreement.
Given that the land lease agreement was required by law to be concluded in writing and subject to state registration, the additional agreement amending the essential terms of such agreement was obviously subject to state registration by analogy with the law (Articles 18 and 20 of the Law of Ukraine ‘On Land Lease’) and had to be concluded in writing and subject to state registration.
The parties may not derogate from the mandatory requirement for state registration of a transaction if such a requirement is provided for by law or is due to the need to apply its analogy. Therefore, in an additional agreement to a land lease agreement, the parties may not determine the effective date of the agreement before its state registration. Otherwise, the general rules set out in the Law of Ukraine ‘On Land Lease’ apply.
In this case, the parties did not submit the supplemental agreement for state registration. Thus, the failure to register the supplemental agreement to the land lease agreement concluded by the parties means that it has not entered into force for the parties, and therefore the rights and obligations under the supplemental agreement have not arisen and the agreement has not changed.
In the case under review, the city council had a legitimate expectation to receive rent from the LLC during the disputed period, most of which (over 86%) was paid by the tenant. Only a part of the rent indexation remained unpaid, which is about 13% of the total amount of the obligation. Therefore, there is no reason to believe that the city council was largely deprived of what it expected when entering into the agreement.
Therefore, the recovery of rent arrears (its indexation) from the LLC in favour of the city council will fully meet the criteria of appropriateness and effectiveness of the method of protecting the violated right, while ensuring compliance with the principle of preserving the agreement.
Resolution of the Grand Chamber of the Supreme Court of 5 February 2025 in case No. 925/457/23 (proceedings No. 12-33гс24) - https://reyestr.court.gov.ua/Review/125162571.
This and other legal opinions of the Supreme Court are available in the Database of Legal Positions of the Supreme Court - https://lpd.court.gov.ua.
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