Posted by Dan on January 26, 2001 at 13:19:16:
In Reply to: Re: Police and Taxes (and MUCH More). . . posted by Alexander on January 26, 2001 at 12:50:30:
I will, of course, be returning to Ukraine - and soon.
BTW - do you have any nice apartments for rent --smile--???
: Hi Dan,
: I am always reading your posts with great interest amd must say that all of them are very informative.
: It is pity that you had such a big trouble with police. But you should understand that our police do not defend us, Ukraine citizens, also. They want money every step you make with them. There is no working laws here (especially if you have opponent with "high" connections). Nobody call the police in case of problems everyone try to cope with that by yourself. Civil law is not working also - it is a question of money and connections. Normal people here suffer because of that. Level of police credibility is ~0%
: But the main problem here is people's mentality, I think. Really, Ukrainian model of business is -"believe nobody if you want to succeed". I do not want to say that there is no honest businessmen here but that they are in big minority.
: I think, the couple of generations should disappear for improvements. Quality of life here depends only on what is going on in heads of simple people. When they start to elect proper politicians and work hard for the perspective life will improve here.
: I hope you will be returning to our country and will not have such unpleasant experience again.
: Regarding real estate laws - there is still no law which regulating real estate business (agents activity) - they take no responsibility for all they are doing.
: : Actually, Ukraine already has quite a few laws regarding real estate. Truthfully, I don't know if anyone would be better off if those laws were all followed, but the laws already exist and are widely ignored.
: : Yes, I much more than "communicated" with your local Police. I met with them on a daily basis for about a week. I ended up working with a guy that is a Major in the Militsia and supposedly highly-respected. I thought he had resolved the problem - only to discover that the opponent apparently pulled in a 'bigger' contact and was able to defeat the truth. Ultimately, that is what I discovered about the legal system in Ukraine. Truth and being law-abiding is NOT what is important. What is important is - how high up your contacts go and how willing are those contacts to step in for you. Since some contacts can be purchased, the equation is quite variable.
: : Taxes. As I understand it, nearly 50 percent of the working population in Ukraine works in some capacity as an enforcer of laws. If this is true, then think for a moment about the drain on Ukrainian society to support this infrastructure - and further consider the fact that enforcement of laws does little to contribute to a country's economic health. It is sad.
: : I further understand that many of these same authorities find ways to supplement their incomes. The most noticeable of these being the traffic cops that issue immediate fines that are paid on-the-spot and nobody ever sees the proceeds - except, of course, for that traffic cop - as only one example.
: : However, the problem is not restricted to law enforcement. It seems it is the Russian/Ukrainian way to find alternatives to paying for ANYTHING. Consider the situation with natural gas right now in Ukraine. Russia is, once again, threatening to stop the flow of natural gas into Ukraine for failure to make payments. Now, all of a sudden, there is a HUGE government campaign to get everyone to pay all their past debts so that Russia can be appeased. Hopefully, they are applying the same pressure on the oligarchs and businesses that they are on the common people - but I doubt it.
: : And how many people do you know that have worked on their electrical meter so as to slow it down - or made some other provision so that they pay less to the authorities??
: : Alexander, I recognize that much of this dates to the Soviet-era mentality. I further recognize that it takes time for people to adjust to a different way of thinking - and the economy is in shambles right now. I am very sympathetic to the issues created by 'forced democratization' and I wish there were alternatives.
: : In spite of all this, I still find there to be no excuse for someone to stand in front of me and make a bald-faced lie. It defies reason and comprehension that society's ills should be used as an excuse for individuals to behave towards one another in a way that is unreasonable and illogical - as these real estate snakes do as a matter of course.
: : I trust that your message was not a defense of these snakes - but rather, an attempt to help me understand the issues and mindset. I am not sure if I will ever fully understand the mindset as it is not my country of birth and my experience-set is vastly different. I try very diligently to be empathetic - and I believe I am. But I also have a refined sense of fairness and right and wrong - admittedly shaped from a western perspective. I am more and more convinced that people in Ukraine who adapt quickly to the mindset and practice of western countries have an enormous opportunity to make a profitable business there. We need only wait now to see if these people emerge. I pray they will.
: : - Dan
: : : Until Ukraine has law regulating real estate activity and licensing we will not have fully transparent relationships in that field. Actually we have the situation when agency takes no responsibility when minor (something broken in apartment) or major problem arises.
: : : Until that the most wise solution is to work with honest owners or agencies which own their apartments or have formal realtionships with owners (subrent contracts). It is not well-advised to deal with company which do not have formal relationships with apartment owners - you may be scammed since majority of apartment owners still have Soviet mentality (they do not know what real estate business is, how visitors should be treated and what real service should be).
: : : Regarding taxes - i think that question should not bother our visitors (I know 5-6 foreigners who are letting their apartments here for profit and do not pay taxes at all). It is up to owner of apartment. Some of them are paying taxes, some of them not. Dan, since you "communicated" with our police - do you want to support this guys by paying taxes?
: : : : For instance:
: : : : * Who owns the apartments you rent?
: : : : * What, exactly, is Kievrent's relationship with them? Formal or not?
: : : : * Are all the apartments officially registered with JAK?
: : : : * What is your policy regarding payment? Credit card OK? Partial payment OK?
: : : : * What is your policy regarding customer satisfaction?
: : : : * What is your policy regarding advance reservations?
: : : : * How many days in advance will you hold a specific apartment?
: : : : * What, exactly, happens if a customer decides after a few days that the apartment is unsuitable?
: : : : * If something breaks in the apartment - through no fault of the tenant (just normal wear and tear) - how is this problem handled?
: : : : * Do you provide written receipts?
: : : : * Do you provide any form of written agreement?
: : : : * Is the payment in US Dollars or other currency?
: : : : * How can you assure me that no-one else has a key for entry into the apartment?
: : : : I looked all around your website for anwers to these - and other questions - and was unable to find anything at all.
: : : : Please respond.
: : : : For those readers that are interested, you should know that the US Consultate in Kyiv advised me 2 weeks ago that dispute cases with illicit real-estate transaction are resulting in some serious problems for Americans traveling to Ukraine. In a few cases, the problems were so severe, the Consulate had to intervene to assist in expedited repatriation of the American travelers. The Consulate also told me the numbers of these incidents has been increasing dramatically recently. Be Cautious!
: : : : Also, it is illegal for an apartment owner or a real-estate agent to receive payment for an apartment in any currency other than Hryvna. Note: it is NOT illegal for a traveleler to pay in his/her home currency - the Ukrainian law is written towards the recipient.
: : : : It is further illegal for an apartment to be rented if it is not officially registered with JAK - a state-run agency that monitors and controls all activity with residences in Kyiv. Virtually NONE of the apartments for rent in Kyiv are registered with JAK. It is because once registered, JAK also advises Ukrainian taxing authorities to be expecting to see income from this property.
: : : : Seriously folks - I had a VERY serious problem during my last visit to Ukraine and discovered a side of Ukrainian society that was unpleasant indeed. Be sure you know the answers to all these questions before you choose an apartment or real-estate company to do busines with. I learned the hard way - that even after a successful experience or two with a real-estate agent - the tables can be turned VERY quickly if any sort of dispute develops. Just be careful.
: : : : - Dan
: : : : : new info and new location of Travel services for foreigners. www.kievrent.com.ua
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