Leasing land plots is one of the most common methods of land use. At the same time, it is lease relationships that often become the subject of litigation due to shortcomings in the texts of contracts, violation of obligations by the parties, etc.
In this article, taking into account current case law, we will consider important aspects that should be paid attention to when concluding and executing lease agreements.
Expression of will of the parties to the contract
According to the general rule established by the Civil Code of Ukraine, the expression of the will of a party to a transaction must be free and correspond to his inner will.
This expression of the parties' will is evidenced by signatures of the landlord and tenant, as mandatory details in a land lease agreement.
At first glance, signing a land lease agreement should not cause any difficulties.
However, there are frequent situations where unscrupulous tenants forge landlords' signatures on contracts or additional agreements. This happens, for example, when the parties cannot agree on the transfer of land for lease or the extension of the contract.
Plot of the court case:
According to the circumstances of the case, the landlord was the owner of 3 land plots and leased them to the LLC for a period of 7 years. After the expiration of the contracts, the landlord refused to extend them and demanded the return of the land plots. Subsequently, the landlord learned about the existence of lease agreements that she had not concluded and signed, the lease term of which was no longer 7, but 15 years.
In court, the landlord requested that the land lease agreements be declared invalid, that the LLC be ordered to return the land to her, and that the records of their state registration of the lease right be canceled.
Criminal proceedings were also opened for the forgery of signatures in lease agreements, within the framework of which a handwriting examination was conducted and it was established that the signatures in the agreements do not belong to the landlord, but to another person.
The court's conclusion:
The Supreme Court noted that a signature is an integral element of a written contract, and its presence confirms the intentions and will of the parties to the transaction, and also ensures their identification.
A contract is concluded if the parties have reached an agreement in due form on all essential terms of the contract. If the parties have not reached such agreement, the contract is considered not to have taken place, and the terms set forth therein do not regulate the disputed relations.
Given that the lessor did not sign the disputed agreements, they are unconcluded. This became the basis for returning the land plots to the lessor and canceling the decision on state registration of lease rights.
Link to the court decision: https://reyestr.court.gov.ua/Review/104232445
As we can see, in the case of forged signatures in lease agreements, the only way to prove this fact and restore the violated right is to go to court and conduct a handwriting examination.
Special attention should be paid to cases where the contract is signed by the lessor's spouse, a relative, or even neighbors. Oddly enough, this also happens, both with and without the will of the landowner.
The Supreme Court, in its resolution dated 01/22/2020 in case No. 674/461/16-ts, concluded that the signing of the transaction (land lease agreement) is carried out by the party(ies) or authorized persons.
This means that if one of the relatives or neighbors of the land owner did not have properly documented authority to sign the contract on behalf of the owner, then such a contract, depending on the circumstances of the case, may be successfully challenged in court.
Essential terms of a land lease agreement
Essential terms of the contract are those terms that must be specified in the land lease agreement.
Therefore, the essential terms of a land lease agreement are:
- Lease object: cadastral number, location and size of the land plot.
- Date of conclusion and term of the lease agreement.
- Rent: its amount, indexation, method and conditions of payments, terms, procedure for its payment and revision, as well as liability for its non-payment.
Let's consider an example of a court case where a dispute arose regarding the determination of an essential term of a contract.
Plot of the court case:
The lessor leased a land plot to an agricultural enterprise for a period of 5 years. Later, the parties concluded an additional agreement to the land lease agreement, according to which the lease term was extended.
In the agreement, the parties did not clearly define the percentage of the rent, namely, they indicated: "more than 3 % of the normative monetary valuation of the land plot." At the same time, the monetary valuation of the land plot was not indicated in the additional agreement.
The court's conclusion:
The amount of rent "over 3%" of the normative monetary assessment of the land plot (share) does not comply with the provisions of Art. 15, 21, 22 of the Law of Ukraine "On Land Lease", which is the basis for declaring this agreement invalid.
The provision of the agreement "over 3%" from the normative monetary valuation of the land plot gives the tenant the right to determine the rent at his own discretion, the amount of which cannot be less than the specified limit, but may be different each year and depends on the will of the tenant. As a result, the landlord does not receive what he counted on when signing the additional agreement.
Thus, the agreement violates the rights of the lessor, and therefore should be declared invalid.
Link to the court decision: https://reyestr.court.gov.ua/Review/100816846
In view of the above, the essential terms of the lease agreement must be written clearly and understandably, without providing the opportunity to interpret them "ambiguously" at the choice of one of the parties to the agreement. We note that in such disputes, the court must establish whether the absence of a material condition in the lease agreement or its inaccuracy actually violates the rights of the lessor or the lessee, and what such a violation consists of. Without the presence of such violations, the claim will not be satisfied.
Appealing a lease agreement subject to its execution
In lease relationships, there are situations when one of the parties goes to court to challenge the lease agreement, even if the parties have been fulfilling the terms of such an agreement for a long time, in particular, the tenant paid the rent and the landlord received it.
Case 1 plot:
The landlord based his claims on the fact that his mother signed a land lease agreement with the LLC for a period of 7 years on his behalf, although the land belonged to him. The landlord was not aware of either the circumstances or the terms of the lease agreement.
He believed that his mother signed the contract because she was misled by representatives of the LLC, which, as a result, misled him as well, since the disputed contract was signed by an unauthorized person.
According to the lessor, the contested lease agreement is invalid, and therefore all state registrations of additional agreements concluded to the specified agreement are subject to cancellation.
The court's conclusion:
The court of first and appellate instance established that the disputed land lease agreement was signed not by the tenant, but by his mother.
At the same time, the lessor concluded and signed with the LLC, both personally and through a representative, additional agreements on the extension of the disputed lease agreement, and also received rent for the execution of the land lease agreement. This indicates that legal relations regarding the lease of land actually arose and existed between the parties. Therefore, there are no grounds for satisfying the tenant's claims to declare the land lease agreement invalid.
According to the court's findings, if the contract was performed by both parties (the tenant used the property and paid for it, and the landlord accepted payments), then the qualification of the contract as unconcluded is excluded.
Link to the court decision: https://reyestr.court.gov.ua/Review/124460178
Case 2 plot:
The landlord filed a lawsuit against the tenant company to declare the land lease agreements invalid, as she believes that neither she nor her deceased parents signed the said agreements, that is, there is no confirmation of their will to conclude the said agreements.
In addition, in her opinion, the said contracts are invalid due to the fact that a number of essential conditions are not specified in the contracts.
The court's conclusion:
The court indicated that the plaintiff did not prove that the signatures on the disputed contracts were made by other persons who did not have the appropriate authority from the landlords.
In addition, the concluded contracts contain essential conditions regarding the amount of rent, indexation, preservation of the condition of the leased objects, determination of the party that bears the risk of accidental damage or destruction of the leased object. There are also cadastral plans, which indicate the cadastral numbers of land plots and acts of acceptance and transfer of leased objects.
Thus, the absence of one of the essential conditions in the contract did not make it impossible to perform the contract, in particular in terms of making payments. In this regard, the parties performed the contract in the agreed manner for a certain period of time.
In this case, the plaintiff's disagreement with the condition of performance of the contract cannot be a basis for recognizing their rights as violated at the time of conclusion of the contract and declaring it invalid on these grounds.
Link to the court decision: https://reyestr.court.gov.ua/Review/98368173
Considering the above case law, the performance of a land lease agreement, in particular regarding the payment and receipt of rent, may become an obstacle to the restoration of the violated rights of one of the parties.
Return VSland reclamation
According to the established position of the Supreme Court, in the event of obstacles to the use of his land plot, the landlord has the right to apply to the court with a claim to eliminate them.
In this case, plaintiffs choose various ways to protect their rights, including:
- return of land plot
or
- land acquisition.
Using the example of a court case, we will consider which of the above methods is the most appropriate given the existence of a lease relationship between the parties.
The plot of the case:
The landlord filed a lawsuit against the agricultural company, requesting that the land lease agreement be declared invalid, the state registration be canceled, and the land plot be reclaimed from illegal possession.
The landlord noted that the lease agreement was concluded between the agricultural company and her deceased mother, who could not have been a party to the said agreement.
At the same time, it is the landlord who owns the land that is the subject of the lease agreement, since she inherited it from her mother.
The court's conclusion:
The court noted that the occupation of a land plot by the actual user (temporary owner) does not deprive the owner of the right of possession of this plot. Therefore, in this case, an effective way to protect the landlord's rights is to eliminate obstacles to the use of his property by filing a claim for the return of such plots.
In turn, the requirement for requisition applies to situations where the land has ceased to be the property of the landowner and is not in the use of another person.
Considering that the landlord did not file a claim to remove obstacles to the use of her property by returning the land plot, but requested to reclaim the land plot from the tenant's illegal possession, the court refused to satisfy this part of the claim.
Link to the court decision: https://reyestr.court.gov.ua/Review/91614129
Therefore, in cases where a landowner faces obstacles exclusively in the use of his land plot, the appropriate way of protection is a claim for the removal of such obstacles by returning the land plot, rather than reclaiming it. This approach is consistent with the legal position of the Supreme Court and provides effective protection of the owner's rights..
Conclusion:
As judicial practice shows, land disputes are a complex and specific category of cases that requires a thorough analysis of the circumstances and the application of relevant legal norms. Each situation is unique, and therefore requires an individual approach and professional legal support.
By contacting Bargen Law Firm, you will receive qualified assistance to effectively protect your rights and interests.
