A procedure for compensation of destroyed/damaged real estate due to Russian aggression has been introduced

On 23 February 2023, the Ukrainian Parliament adopted the Law of Ukraine “On Compensation for Damage and Destruction of Certain Categories of Real Estate as a Result of Hostilities, Terrorist Acts, and Sabotage Caused by the Armed Aggression of the Russian Federation Against Ukraine, and the State Register of Property Damaged and Destroyed as a Result of Hostilities, Terrorist Acts, and Sabotage Caused by the Armed Aggression of the Russian Federation Against Ukraine” No. 2923-IX (“Law”), which will enter into force on 22 May 2023.

The Law establishes the basic principles for obtaining compensation for damage to or destruction of residential real estate in connection with the armed aggression of the Russian Federation against Ukraine. 

In particular, it provides that:

• citizens of Ukraine and managers of apartment buildings may receive compensation (“Compensation Recipients”)
• a certain number of subjects have a priority right to compensation, including combatants, disabled persons, and multi-child families
• a commission specially established by a decision of the local council or military (military civilian) administration (“Commission”) will resolve on the compensation
• the Compensation Recipients will submit the applications and supporting documents (“Application”) electronically via Diia or in paper form to the Centers for the Provision of Administrative Services, social security authorities or notaries following the procedure established by the Law
• you can submit the Application during the martial law period and one year after it’s lifted/terminated (with certain exceptions)
• registration of the Application will be carried out in the State Register of Property Damaged and Destroyed as a Result of Hostilities, Terrorist Acts, and Sabotage Caused by the Armed Aggression of the russian federation against Ukraine
• the Commission will consider the Applications within one month (with the possibility of extending this term) on a first-come, first-served basis and
• the amount of compensation for the destroyed real estate object will be determined by multiplying the total area of such an object by the cost per 1 m2 of the area defined following the procedure provided by the Ukrainian Government.

The Law distinguishes the following ways of compensation:

For the destroyed property:

• providing funds with a special use regime (this form of compensation applies only in case of destructed garden/cottage houses) or
• financing the purchase of an apartment or other residential premises using a housing certificate (the only form of compensation for the destructed apartments and an alternative one in case of destructed garden/cottage houses)

For damaged property:

• construction works on the damaged real estate and/or
• providing building materials for such works.

The Ukrainian Government will further establish the procedure for providing compensation for damaged real estate.

We hope that, except accomplishing the primary objective, the enforcement of this Law will facilitate the accumulation of a database for Ukraine’s future successful claims against the Russian Federation for compensation for damages resulting from its aggression.