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Supervisor Elham AbolFateh
Editor in Chief Mohamed Wadie

Legislative changes introduced in Uzbekistan to protect property rights


Thu 16 Nov 2023 | 09:23 PM
Gulnora Mahmudova, Chairwoman of the Association of Businesswomen called "Entrepreneurial Woman"

Uzbekistan has introduced a number of changes to improve legislation on the protection of property rights.

Primarily, the changes were made to the updated Constitution.

In particular, part three of Article 65 proclaims the inviolability of property. In other words, the fundamental law proclaims and strengthens the existence of public and private property. Moreover, it provides equal rights before the law and the court in defense and conditions for the development of all forms of property. For instance, in cases of obtaining a bank loan, application of privileges and preferences for the development of small business and private entrepreneurship.

Also, no one may be deprived of his or her home without a court decision. This principle is enshrined in article 47 of the Constitution. In the event that an owner is deprived of his or her home, he or she shall be provided with prior and equal compensation for the value of the home and the losses incurred.

Simplified procedures

Uzbekistan is also simplifying property registration procedures and introducing new mechanisms for dispute resolution and strengthening anti-corruption measures.

On June 8, 2021, the President of Uzbekistan Shavkat Mirziyoyev adopted a decree “On measures to ensure equality and transparency in land relations, reliable protection of land rights and turning them into a market asset.” According to the decree, land is allocated on the basis of the right of permanent use to state bodies, institutions, enterprises and citizens’ self-governing bodies.

In public-private partnership (PPP) projects cases, a land is allocated to a state body on the basis of permanent use. Land plots are allocated to the private sector on the basis of ownership and lease. In the case of implementation of public-private partnership projects, to the private partner on lease for the term of the agreement.

Uzbekistan has introduced differences in the procedure for allocation of agricultural and non-agricultural land, as well as the right to own them. While agricultural land is allocated only on the basis of lease based on the results of electronic tenders, non-agricultural land can be allocated on the basis of ownership and lease based on the results of an online auction.

On August 24, 2022, the President also adopted a decree “On Measures to Securely Protect the Inviolability of the Right to Property, Prevent Unjustified Interference in Property Relations, and Increase the Level of Capitalization of Private Property.”

This document abolished a number of norms that directly or indirectly restricted the rights to own, use and dispose of property.

In particular, the decree abolished restrictions on the use of the right to land plots, the realization of property rights to housing, the use of land plots, buildings and structures, transport owned by individuals and legal entities, as well as corporate relations.

Changes in the procedure for termination of ownership rights

The right of ownership can no longer be terminated by canceling the document on the basis of which it arose. In other words, the khokim will no longer be able to cancel the decision to allocate land and property. If a document is adopted illegally, it can be recognized as invalid by a court only.

It is possible to voluntarily give up land on the basis of a notarized statement of the owner. This no longer requires a decision of the khokim. These changes are especially relevant for farmers.

When a legal entity is liquidated, its right to a non-agricultural land plot is not terminated and the land is not withdrawn from the state reserve. These lands will be transferred to the founders of the liquidated legal entity.

From now on, the owner or his representative has the right to independently defend his property against any encroachment proportionate to the violation of the right and within the framework of necessary defense to prevent the violation of the right. Also, measures up to criminal liability may be applied for trespassing into private property and its territory without the owner’s permission.

From now on, in Uzbekistan there is no need to obtain the agreement of persons who have no family ties with the owner of residential premises to cancel their permanent registration in the residential premises.

The introduction of UZKAD system

In 2023, Uzbekistan has introduced “Integrated Information System of Cadastre and Real Estate Registration” (UZKAD), a unified information system on real estate.

The authenticity and reliability of information in the system is guaranteed by the state.

If a dwelling was purchased with incorrect information in the UZKAD, it will not be possible to reclaim the dwelling from a bona fide purchaser after three years. The damage to the original owner is compensated by the state, which is subsequently recovered from the perpetrator.

Demolition funds under the government and regional khokimiyats were transformed into republican and territorial trust funds for compensation of property damage caused to individuals and legal entities (compensation funds).

Starting January 1, 2023, affected residents and business owners reimbursed from compensation funds in a number of cases:

• as a result of unlawful actions of a state body, official, in particular, investigator, inquirer, prosecutor and court, determined by a court decision;

• losses caused to individuals and legal entities who acted in reliance on the state register of rights to real estate objects as a result of illegal or unreliable information being entered into it;

• losses caused to the owner as a result of the impossibility of recovery from a bona fide purchaser of the dwelling.

It is also important to highlight the regulation of the procedure for the withdrawal of land plots for public needs, as well as the demolition of facilities located on the withdrawn land plot. The law “On Procedures for Withdrawal of Land Plots for State Needs in Exchange for Compensation” came into force on October 1, 2022. According to it, the procedures for withdrawal of land plots were significantly complicated. Until a decision is made to withdraw only land plots, the initiator will have to go through a number of steps, including fulfillment of mandatory conditions, such as holding an open discussion with the owners.

Meetings of the Jokargy Kenes of the Republic of Karakalpakstan, local councils on preliminary consideration of the initiative to withdraw a land plot should be held openly with the participation of representatives of the media and the public.

Finally, in order to continue to strengthen the inviolability of property and expand its shares in the market asset, the Ministry of Justice is drafting a new version of the Law “On the Protection of Private Property and Guarantees of Owners’ Rights.”