Construction Projects and the Real Estate Market in Ukraine: Legal Framework and Investment Risks
Max Batryn, Partner, Lions Lawyers
Publication
Ukraine’s construction and real estate sector remains one of the most investment-active segments of the national economy, attracting domestic developers, foreign investors, funds, and infrastructure partners.
Despite wartime challenges, residential, commercial, logistics, and reconstruction projects continue to develop — particularly in western and central regions of the country.
However, construction projects in Ukraine operate within a complex legal and regulatory environment requiring careful structuring, permitting compliance, and asset-protection planning.
Construction projects and the real estate market in Ukraine operate within a multi-layered legal framework combining land law, urban planning regulations, construction permitting procedures, investment structuring, and property registration rules.
Foreign investors, developers, and lenders entering Ukrainian projects must navigate zoning approvals, construction licensing, technical commissioning, and title registration, as well as contractual arrangements with contractors, co-investors, and end-buyers.
Legal risks frequently arise in areas such as delayed project delivery, financing structures, preliminary sale agreements, and ownership transfer formalities. Regulatory reforms — including digitalisation of property registers and enhanced investor-protection legislation — continue to reshape the sector.
Given the capital intensity of construction ventures and the prevalence of cross-border financing, comprehensive legal due diligence and structured project support are essential to safeguard investments and ensure enforceable property rights in Ukraine.
1. Legislative and Regulatory Framework
Real estate development in Ukraine is governed by a combination of statutory and regulatory instruments, including:
Land Code of Ukraine
Civil Code of Ukraine
Law on Regulation of Urban Planning Activities
Law on Architectural Activity
Construction norms (DBN standards)
Local zoning and municipal regulations
The framework regulates land allocation, planning approvals, construction permits, commissioning, and ownership registration.
2. Land Rights and Development Title
Construction projects begin with securing legal title to land, typically structured as:
Ownership rights
Long-term lease rights
Development rights agreements
Due diligence must verify:
Land designation (zoning purpose)
Encumbrances or easements
Municipal planning restrictions
Historical ownership risks
Improper land structuring remains one of the most common sources of construction disputes.
3. Construction Permitting Process
Developers must complete a staged approval process, including:
Urban planning conditions and restrictions
Design documentation approval
Construction permit registration
Technical supervision compliance
Permits are issued through state architectural and construction control authorities.
Unauthorised construction may lead to fines, suspension, or demolition orders.
4. Investment and Financing Structures
Ukrainian construction projects are financed through various legal mechanisms, including:
Direct equity investment
Joint development agreements
Construction financing funds
Forward purchase agreements
Preliminary sale contracts with buyers
Foreign investors often structure entry through Ukrainian SPVs (special purpose vehicles) to manage tax, liability, and currency risks.
5. Sale of Units and Investor Protection
Apartments and commercial premises are frequently sold during construction via:
Preliminary sale agreements
Property rights assignment contracts
Investment participation agreements
Historically, buyers bore significant risks where developers retained ownership until commissioning.
Recent reforms — including legislation guaranteeing proprietary rights to future real estate objects — aim to enhance investor protection and ensure automatic ownership transfer upon project completion.
6. Commissioning and Registration of Ownership
Upon completion, buildings must undergo:
Technical inventory certification
Readiness confirmation
Commissioning approval
Only after commissioning may ownership rights be formally registered in the State Register of Property Rights.
Title registration is the final legal step enabling sale, mortgage, or lease of property.
7. Common Legal Risks in Construction Projects
Foreign investors and buyers most frequently encounter disputes involving:
Delayed project delivery
Failure to commission buildings
Title registration obstacles
Developer insolvency
Invalid preliminary contracts
Construction defects
Disputes may escalate into commercial litigation, arbitration, or criminal proceedings where fraud is alleged.
8. Wartime and Reconstruction Considerations
The war has introduced additional regulatory and practical factors, including:
Damaged property compensation mechanisms
Reconstruction tenders
State and donor-funded rebuilding projects
Insurance and force majeure disputes
Reconstruction initiatives are expected to generate significant foreign investment opportunities alongside heightened compliance requirements.
9. Strategic Legal Structuring
Effective legal support throughout the project lifecycle includes:
Land and title due diligence
Permit audit
Investment structuring
Construction contract drafting (FIDIC / EPC / turnkey)
Buyer-sales compliance
Exit and asset disposal planning
Preventive structuring significantly reduces litigation and enforcement risks.
10. Conclusion
Ukraine’s construction and real estate market offers substantial long-term investment potential, particularly in the context of post-war reconstruction and infrastructure modernisation.
However, the sector remains legally sophisticated and risk-sensitive.
Foreign investors, developers, and lenders benefit from comprehensive legal oversight at every stage — from land acquisition to project exit — to ensure enforceable property rights and capital protection.
Our Construction & Real Estate Practice
Lions Lawyers advises developers, investors, funds, and residential communities in complex construction and real estate matters across Ukraine.
We provide:
Land title and zoning due diligence
Construction permitting and regulatory compliance
Investment structuring for development projects
Drafting of construction and EPC contracts
Litigation over delayed or defective projects
Buyer and co-investor dispute resolution
Asset protection and enforcement strategy
Our team combines real estate, corporate, and dispute-resolution expertise to safeguard capital investments and ensure legally secure project execution.
Early legal structuring significantly reduces construction risk exposure and enhances project bankability.