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The Grand Chamber of the Supreme Court: Insignificant underpayment is not a ground for termination of land lease agreement

author: Volodymyr Tsiupryk

14 May, 2025 Exclusive

The Supreme Court of Ukraine (SC) provided important clarifications regarding the termination of land lease agreements in cases of non-payment or partial payment of rent. The Court has emphasized that a tenant’s repeated failure to pay rent, even if the debt is subsequently paid off, can still justify the termination of the lease agreement based on a breach of contractual obligations. This is particularly relevant in cases of systematic non-payment of rent, which is considered a significant violation of the contract under Ukrainian law.

Furthermore, the SC has clarified that partial non-payment (underpayment) of rent, while not falling under the provisions of the Land Code for complete non-payment, may still lead to contract termination if the underpayment is deemed “substantial” under Civil Code regulations. The court did not provide specific thresholds but noted that the determination of what constitutes a substantial underpayment should be made on a case-by-case basis, considering the material impact on the landlord’s interests.

This ruling stresses the importance for both landlords and tenants to carefully monitor and adhere to payment schedules to avoid costly legal consequences. Landlords are advised to assess whether a tenant's breach is substantial enough to warrant contract termination, while tenants should be cautious of repeated delays or underpayments to avoid jeopardizing their lease agreements.

The full version of the article is available in Ukrainian by the link.

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