This was the subject of an informational session entitled “Property-Related Aspects of the Relocation of Executive Bodies, Municipal Facilities and Institutions”, which was conducted by U-LEAD Policy Advisors Ivanna Kuz and Viktoriia Kopchak.
When relocation is reality rather than theory
Right away, Ivanna Kuz pointed out the circumstances in which municipalities are operating today, noting that this isn’t a “one-time move” but a continuous process of solving dozens of problems, from staffing and organisational to legal ones.
That is why municipalities are seeking the fastest way to legitimise their use of premises or property. This is where the most risk lies, because, according to the expert, “property issues arise most often, as they are the most complex and risky in terms of legality”.
As emphasised by Ms Kuz, the municipality’s objective is not simply to “find a roof over their heads,” but to regulate property relations in such a way that they are lawful and protect both municipalities and their officials.
Why municipalities make mistakes: inertia of outdated solutions
The second half of the event focused on specific steps that municipalities can take in this situation. According to Viktoriia Kopchak, the most common mistakes are not caused by indifference or incompetence. They tend to happen because municipalities use familiar tools in situations where the actual circumstances and interactions between municipalities make this unwise.
Mistake #1: “Let’s transfer it under operational management or economic administration rights — this is the simplest solution.”
When you need to resolve an issue related to premises quickly, the first thing that comes to mind is operational management and economic administration mechanisms. In practice, this type of decision could indeed be made until recently, when the issue of transferring property to municipal entities subordinate to the council was raised. However, this practice is currently unacceptable for any municipality.
The speaker underlined that even if some people think that “it is logical and convenient,” the new legislation changes the rules of the game, given that “from 28 August 2025, municipal property belonging to either the relocated municipality or the host one can no longer be transferred under operational management or economic administration rights”.
The risk of doing this is clear: if a municipality decides to use a prohibited method, it is breaking the law.
Mistake #2: Usufruct as a universal solution
Following changes in the legal framework, many municipalities have turned their attention to usufruct as a new mechanism for transferring property for use. The problems begin when usufruct is perceived as a one-size-fits-all solution: If operational management is not possible, why not use usufruct?
According to Ms Kopchak, “municipal property may be transferred, for example, under the right of usufruct only to those entities in the municipal sector whose founder is the corresponding local council”.
In other words, usufruct only works within clearly defined limits. Otherwise, the municipality must seek another legal remedy.
Mistake #3: Attempting to transfer property “between municipalities”
Relocation often sparks a natural desire to help out your neighbours by transferring rights of use, as if one municipality could simply give property to another without any extra procedures, just by signing a memorandum.
However, the expert emphasises that “the memorandum is not a sufficient legal basis for the transfer of municipal property”.
Mistake #4: Storage instead of a lease
Another common practice is replacing a lease with a storage agreement. It seems like the simpler option, as it appears to involve fewer formalities at first glance. However, if the municipal property that is supposedly transferred for storage is actually being used, the storage agreement becomes nothing more than a legal fiction.
Ms Kopchak stresses: “Current legislation provides for a clear procedure for transferring property for use by third parties — including neighbouring municipalities, the private sector and state bodies. This is called leasing”.
Mistake #5: Open-ended and rent-free lease
Many municipalities show a lot of empathy towards those who are relocating, thinking that if help is needed, they might as well do it for free. However, any lease agreement has certain binding material terms, including the rent (incidentally, the applicable law strictly prohibits the free use of municipal property) and the period of the lease.
“The lease of municipal property must be for a fixed term and require the payment of rent, in accordance with the law on the lease of state and municipal property,” the expert states clearly.
Paperwork is not bureaucracy. It is a safeguard
Municipalities sometimes feel that “it is best not to complicate matters with paperwork,” but properly documenting relations between municipalities actually lays the foundation for transparent, straightforward and productive cooperation.
“There needs to be a legal and documentary basis for the use of municipal property. This is essential both for the municipality that owns it and for all users, as this is the only way they can properly plan their maintenance expenditures. Don’t be afraid of contractual obligations; be afraid of not having them," said Ms Kopchak.
Keep in mind that there are no “minor” property issues in relocation. There are only correct decisions — those that help the municipality function — and hasty ones — those that will cause problems after the move is complete. That is why the most reliable strategy is to act within the limits of legal procedures and to document every step.
