Why is bill 7198 on compensation for damaged or destroyed housing needed?

Draft Law No. 7198 creates a compensation mechanism for Ukrainians whose real estate was damaged or destroyed as a result of the Russian Federation’s military aggression against Ukraine. It will allow those whose homes were destroyed to receive assistance from the state budget. Specialists of the Office of Effective Regulation of BRDO participated in the development of the document.

It is important that this draft law is an intermediate link between providing the affected Ukrainians with housing and full compensation, which the Russian Federation must pay for all the damage caused to Ukraine and its citizens. After all, currently the Russian Federation does not pay reparations, and the budget of Ukraine cannot cover all the needs for compensation for all the damage caused by Russia. The same Ukrainians who decide to wait and not take advantage of the compensation for destroyed housing, which will be introduced by draft law 7198, will be able to receive funds after the victory of Ukraine from reparations, which will be paid by the Russian Federation.

How will it be possible to receive compensation for destroyed housing?

The issue of granting or not granting compensation will be decided by the Commission for consideration of issues regarding the provision of compensation, which is created by the executive body of the village, township, city, district in the city (if it is created) council, military or military-civilian administration of the settlement.

An application for compensation for destroyed housing can be submitted to the Commission in two ways:

  1. in electronic form – by means of the Unified state web portal of electronic services;
  2. in paper form – through the center for the provision of administrative services, social protection bodies or a notary public.

There will be drop-off points to ensure that all owners of damaged or destroyed properties can submit claims. Such points will be created by TsNAPAs and public social protection bodies.

Applications for compensation for destroyed housing can be submitted during martial law and within one year from the date of its termination or cancellation in the territory where the destroyed object of real estate is located (was located).

Yes, compensation can be provided in two options:

  • monetary – in this case, the applicant receives funds to an account with a special mode of use for financing the construction of a manor-type house, a cottage house or a country house;
  • financing the purchase of an apartment, other residential premises, a manor-type house, a cottage or country house (including financing the purchase of such premises/houses that will be built in the future, or investing/financing its construction) using a housing certificate. Such a residential certificate is produced in electronic form using the Register of Damaged and Destroyed Property.

Compensation for the destroyed manor house, cottage or country house, construction objects (manor house, cottage and country houses) is provided at the choice of the recipient of compensation in one of the above ways.

The search and selection of an apartment, other living space, manor-type house, cottage or country house (including such a room/house that will be built in the future) is carried out by the recipient of compensation independently. At the same time, such a choice is possible on the territory of any territorial community of Ukraine, except for:

  • the territory of Ukraine temporarily occupied by the Russian Federation, defined in accordance with the Law of Ukraine “On ensuring the rights and freedoms of citizens and the legal regime in the temporarily occupied territory of Ukraine”;
  • territories of territorial communities that are located in the area of military (combat) operations or that are under temporary occupation, encirclement (blockade) in accordance with the list approved by the central body of executive power, which ensures the formation and implementation of state policy on issues of temporarily occupied territories.

It may happen that the price of a new real estate object, the financing of acquisition (investment/financing of their construction) is carried out using a housing certificate, will be lower than the amount of monetary compensation specified in the certificate. In such a case, information about this will be recorded in the Register of Damaged and Destroyed Property, and the unreceived amount of compensation will be paid to the applicant at the expense of funds received from the Russian Federation for compensation for damages caused by the armed aggression of the Russian Federation against Ukraine, in accordance with the procedure established by law.

The compensation will be calculated according to the formula and coefficients taking into account the average indicators of the cost of housing depending on its type. Accordingly, the cost will be averaged.

How will it be possible to receive compensation for damaged housing?

Compensation for damaged housing will be provided by performing construction-related work on the damaged real estate object for the purpose of its restoration (including the development of project documentation for construction, its examination, construction work) and/or the provision of construction products to perform such works. The procedure for obtaining such compensation will be determined by the Government.

Compensation is also provided for damaged or destroyed housing that was not completed before the start of the war, provided that retaining and external fencing structures (except for translucent structures and filling of doorways) were erected in the construction object with such housing, and in relation to such an object, received the right to perform construction works.

In addition, the law provides for compensation for objects damaged or destroyed as a result of circumstances caused by the armed aggression of the Russian Federation against Ukraine (mining, demining, etc.), after the termination or cancellation of martial law. In such a case, an application for compensation for a damaged/destroyed real estate object is submitted to the Commission for consideration of issues regarding the provision of compensation within three years from the date of termination or cancellation of martial law in the territory where the damaged or destroyed object is located (was located) real estate.

The law is aimed at creating a legal basis for citizens to receive compensation for some types of real estate as quickly as possible, without waiting for the decisions of international courts regarding reparations from Russia, as such processes can drag on for years. At the same time, further distribution of compensation to other categories of persons or other types of immovable property is not excluded in case of financial possibility. Receiving compensation in accordance with the adopted law is a right, not a duty of a citizen.

It is important in the draft law that the funds allocated for compensation for damaged or destroyed housing will work for the economy of Ukraine. This will be possible thanks to the fact that Ukrainians who have lost and need housing will be able to use the certificate to obtain housing on the secondary market or to finance the construction of new housing or separate construction materials or services by analogy with eSupport.

During the implementation of the compensation mechanism, it is also necessary to take into account:

  • the possibility to build a private house on one’s own plot, if the apartment was destroyed;
  • the opportunity to build a private house independently;
  • inflation;
  • the need to regulate the activities of commissions that will make decisions on compensation, to ensure transparency and accountability;
  • the need to ensure proper communication of this decision.

We call on elected officials to adopt this law as soon as possible.