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20.01.2026
Adaptation of Commercial Real Estate Lease Agreements Following the Abolition of the Commercial Code of Ukraine
WHAT KEY CHANGES AFFECT COMMERCIAL LEASE AGREEMENTS?
As of 28 August 2025, the Commercial Code of Ukraine has ceased to be in force. The legal regulation of commercial contracts has shifted to the Civil Code of Ukraine and special legislation. This change poses a practical challenge for landlords, tenants, developers, and their legal advisers: commercial lease agreements for premises and buildings must be reviewed and adapted.
Failure to do so in a timely manner and with due regard to the new legal framework may result in loss of legal protection mechanisms, litigation risks, or unexpected changes in liability regimes.
At the same time, lease agreements concluded before 28 August 2025 remain valid — references to the Commercial Code alone do not render them invalid. However, new agreements and those being renewed must comply with the Civil Code and applicable special laws.
Regulatory framework
The general rule now is the application of Civil Code provisions on lease (Articles 759 et seq.) and special legislation (including the Law on Lease of State and Municipal Property, the Land Code of Ukraine, etc.). Accordingly, many “standard” provisions previously based on the Commercial Code should be tested for compatibility with the Civil Code.
Flexibility and court practice
The Civil Code is more principle-based and flexible in many respects. Courts now have greater discretion in interpreting lease agreements, relying on general principles of contract law such as good faith, reasonableness, and dispositiveness.
This means that clearer contractual mechanisms and precise wording significantly increase the parties’ chances of protecting their interests.
Long-term leases of buildings and derivative land rights
Leases of buildings and capital structures are closely linked to derivative land use rights (Article 796 of the Civil Code). This is particularly important for long-term commercial leases, especially where the landlord does not own the land plot.
Compliance of lease terms with land law requirements must be carefully verified.
Contract adjustment mechanisms
In the event of a material change of circumstances, the Civil Code and court practice allow parties to apply to court to amend or terminate a contract. This “change of circumstances” doctrine has become a critical tool in conditions of macroeconomic shocks or force majeure events.
WHAT SHOULD BE REVIEWED AND UPDATED IN COMMECIAL LEASE AGREEMENTS? PRECTICAL GUIDANCE
Below is a checklist of key lease provisions that should be aligned with the Civil Code and current practice. Renegotiating agreements also allows the parties to audit existing arrangements and clarify contentious issues.
Subject matter of the lease
The leased property must be clearly described (address, area, technical characteristics, cadastral number of the land plot where applicable). Shared-use areas (parking, utilities, access routes) should also be expressly defined.
Lease term and renewal
The lease term should comply with land law requirements (for buildings conferring derivative land rights). Clear renewal mechanisms and the right to amend terms should be included, including rent indexation and revision in case of tax or regulatory changes.
Rent, indexation, and revision
The currency of payment or exchange-rate linkage must be specified; indexation mechanisms (inflation index or CPI formula) should be clearly defined; payment procedures and deadlines established; and consequences of late payment (interest, penalties, termination rights) expressly stipulated.
Rights and obligations of the parties (repairs and maintenance)
Routine and capital repairs should be clearly allocated; reimbursement rules for modernization costs defined; and procedures for works approval and utility connections agreed. This significantly reduces disputes over usability of the premises.
Sublease and assignment
Where subleasing or assignment is permitted, the procedure for approval, integrity criteria for subtenants, liability allocation, and damage compensation mechanisms should be clearly set out. Pure prohibitions are often ineffective without enforcement tools.
Security for performance of obligations
Best practice recommends combining several instruments: security deposits, escrow-like mechanisms, bank guarantees, suretyships, or pledges of equipment. Bank guarantees are widely used to enhance tenant creditworthiness.
Force majeure and change of circumstances
Contracts should specify notification procedures, deadlines for mitigation, rights to suspend or reduce rent, and mechanisms for judicial review under Article 652 of the Civil Code.
Confidentiality, access, and security
Commercial premises often involve sensitive information or equipment. Provisions should regulate landlord access (repairs, audits), confidentiality, data security requirements, and restrictions on third-party visits.
Dispute resolution mechanisms
It is advisable to define a multi-tier dispute resolution clause: negotiations → mediation → expert determination → arbitration or court proceedings. Jurisdiction and evidence-preservation mechanisms (inspection reports, photo/video evidence, expert opinions) should also be specified.
Given the flexibility of the Civil Code, arbitration may be particularly attractive for international leasing relationships.
TYPICAL RISKS OF POORLY DRAFTED LEASE AGREEMENTS AND THEIR CONSEQUENCES
- Non-compliance of lease terms with land law — risk of invalidity of certain provisions or restriction of use rights, undermining long-term business models.
- Unclear indexation or currency risk provisions — financial losses or inability to pay during inflationary shocks, increasing litigation risks.
- Lack of security mechanisms — absence of deposits or guarantees complicates damage recovery.
- Insufficient repair and maintenance clauses — unpredictable costs and disputes upon return of the premises.
- Unregulated subleasing — conflicts with third parties using the premises improperly.
Ignoring change-of-circumstances mechanisms — in crises (sanctions, war), weak or absent adjustment clauses may lead to bankruptcy. The Civil Code’s judicial adjustment mechanism fundamentally changes the approach: parties must define procedures and evidentiary standards in advance.
ALGORITHM FOR ADAPTING LEASE AGREEMENTS
Step 1. Legal audit of existing contracts
Identify references to the Commercial Code, conflicting provisions, and risk clauses.
Step 2. Negotiations on amendments or addenda
Where possible, agree on trilateral mechanisms (e.g., bank participation as escrow or guarantor).
Step 3. Update security documents
Replace or supplement guarantees: deposits, bank guarantees, suretyships. For large projects — consider escrow mechanisms.
Step 4. Review force majeure and change-of-circumstances clauses
Define triggering events, notification procedures, deadlines, and alternative tools (rent reduction, deferral, restructuring).
Step 5. Audit and condition-recording procedures
Photo/video evidence, handover acts, inspection logs — all critical for litigation.
Key takeaways
- Do not delay adaptation — even pre-August 2025 contracts require action due to evolving court practice.
- Avoid template clauses — the Civil Code allows broader interpretation; precision matters.
- Secure performance — deposits, guarantees, and pledges strengthen enforcement.
- Define transparent rent revision mechanisms — indexation formulas or indices.
- Prepare for change of circumstances — include pre-trial dispute resolution algorithms.
CONCLUSION
The abolition of the Commercial Code is not merely a legislative change. It is an opportunity to reset the commercial lease market: increase transparency, formalize risk management mechanisms, and attract more sophisticated tenants and financial institutions.
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