During war, numerous challenges are exacerbated, in particular those related to the lease of state or municipal property. Maintaining premises without wasting unnecessary resources on administrative procedures is an important prerequisite for continuing work. That is why it is worth knowing how lease agreements work in wartime, when they are considered automatically extended, and in which cases the balance sheet holder has the right to refuse an extension. Read more on the nuances of leasing.
Features of leasing state and municipal property during wartime
The features of leasing state and municipal property during martial law are determined by Resolution of the Cabinet of Ministers of Ukraine No. 634 of May 27, 2022 (hereinafter –Resolution No. 634). According to this document, lease agreements for property located in certain territories for which the date of the end of hostilities or temporary occupation has not been established and the term of validity of which expires during martial law are considered extended. Such agreements are valid until the date that occurs six months after the official end of hostilities or temporary occupation, taking into account the approved list of such territories.
Contracts concluded with individuals or individual entrepreneurs who were called up or accepted for military service after the introduction of martial law are also extended. If the contract expires during the period of martial law, it is automatically extended until the date that occurs six months after the abolition or termination of martial law.
A separate category is facilities located at airports or airfields. If the term of lease agreements expires before their operation is resumed, such agreements are also considered extended – until the date that occurs six months after the actual resumption of the operation of the relevant facility.
Grounds for extending the lease
It is important that in order to extend the term of the contract in the specified cases, it is not necessary to submit an application by the tenant and it is not necessary to make a separate decision by the landlord. Everything happens automatically – on the basis of the law. However, the balance sheet holder has the right to refuse such an extension. According to Article 19 of the Law of Ukraine “On Lease of State and Communal Property” (hereinafter – the Law), the grounds for this may be:
- the need for premises for personal use (subject to a substantiated written request);
- the failure by the lessee to submit a report on the valuation of the leased property within the established period;
- the violation of the terms of the contract, which has not been eliminated; overdue rent for a period of more than three months;
- the presence of debt or lack of insurance for the leased property;
- the application to the legal entity-tenant of criminal law measures provided for in paragraph 4 of part one of Article 96-10-1 of the Criminal Code of Ukraine;
- other cases specified in Article 7 of the Law.
In case of refusal, the balance holder must notify the tenant and the landlord no later than 30 calendar days before the expiration date of the lease agreement. In addition, such refusal must be agreed with the authorized management body in cases where such consent is required by law, statute or regulation.
Attention should also be paid to the changes made by Resolution of the Cabinet of Ministers of Ukraine No. 614 of May 27, 2025. Thus, lease agreements for state and municipal property, the term of which expires within four months from the date of entry into force of this Resolution, are considered extended until the date four months after the date of expiration of the contract, except for the cases specified in paragraph 5 of Resolution No. 634.
If you follow all the rules and take into account the nuances of the lease, you will be able to keep your work going and keep your premises, without wasting resources on unnecessary bureaucracy. And this is a guarantee of the sustainability of your business and confidence in the future.
