This article discusses the peculiarities of municipal property rental in Kyiv, in particular the rental of premises. Since there is not so much information on this issue, we will try to tell you in what cases and for whom such a lease can benefit, and for whom, on the contrary, it does not even make sense to consider this option, because the negative result of this idea is known beforehand.
Perhaps the biggest disadvantage in this process is that in most cases it is almost impossible to determine in advance the rental rate on the property due to some features of its calculation. Consider the cases in which utility property is a good alternative to private.
Features of calculation of rent for utilities
In order for the city (Kyiv) to calculate the cost of leasing the property, the potential lessee must first order the conduct of real estate evaluation. The starting point for such work is a power of attorney (or letter) from a public utility that is the formal owner (balance-holder) of the property and statements of property characteristics. By the way, negotiate with appraiser about the definition of undervalued or inadequate value is meaningless, as such estimates are subject to mandatory coordination (review) in the Department of Rental of Municipal Property of Kyiv. If the property evaluation will be lower than the price for such premises, such work simply will not be agreed, and the customer will lose time and money.
But we moved away from the main topic of the article. After contacting with appraisal company the customer receives expert evaluation of the real estate, in which the market value of the premise is determined, for example, 15000 UAH per sq.m. But what does rent have to do with it?
The fact is that the rental rate depends directly on two factors:
- market value of the immovable property, which was determined by the appraiser and agreed by the Department of KSCA (Kyiv City State Administration);
- the ratio of annual rent to the cost of the premises, which depends on the planned activity, that is, the direction of business (look the method of calculation of rent №786).
Let’s look at the examples of different types of activity, the value of coefficients and the size of the rental rate for the conditional premises, the cost of which is 15000 UAH.
| Type of activity | Coefficient | Annual rent, UAH/sq.m. per year | Monthly rate, UAH/sq.m. per month |
| Jewelry store | 0,40 | 6000 | 500 |
| Office space | 0,18 | 2700 | 225 |
| Hairdressing or shoe repair | 0,04 | 600 | 50 |
As you can see, renting a communal property to place a jewelry store there is a rather dubious idea. In the case of office accommodation – the main advantage of public space over private is greater protection of the tenant from various force majeure. For example, early termination by the lessor. Since utility leases are usually for a period of three years, this argument can be decisive for many entrepreneurs. After all, the stories, when the landlord as they say «changed his mind» to rent the premises after the tenant has spent certain finishing work there, enough and even in abundance.
But it is most reasonable to consider the rental of municipal real estate in Kyiv, if your business is connected with the types of activities that have the lowest values of the above coefficients. The most common option is to provide various household services to the population.
Or for more information about the procedure of registration, please refer to our article about evaluation for rent. Or simply call us, we will explain you everything in detail!
