REPUBLIC OF LITHUANIA                                     
                                                                                
                               LAW                                              
                                                                                
                               ON                                               
                                                                                
                       THE LEASING OF LAND                                      
                                                                                
                                                                                
     Article 1. The Purpose of the Law on Land Lease                            
                                                                                
     This Law  shall establish  the procedure for leasing land to               
natural   and legal  persons of  the Republic  of  Lithuania  and               
foreign states   as  well as  to joint  ventures and  firms  with               
foreign capital,  and shall   regulate  the relations between the               
lessee and the lessor.                                                          
     The procedure  for leasing  land to  diplomatic and consular               
missions   of foreign  states is  established in  the Law  of the               
Republic of  Lithuania   "On the Procedure and Conditions for the               
Sale and  Lease of  Land to   Diplomatic and Consular Missions of               
Foreign States".                                                                
     Buildings, structures and other facilities located on leased               
plots   of land  shall  be  rented  according  to  the  procedure               
established by  law, and the conditions for the use thereof shall               
be established  in  the lease. With people who are using land for               
the purpose  of agriculture   which has been assigned to them for               
their private holdings or as service  allotments, contracts for a               
lease of  State-owned land  shall  not  be  concluded  until  the               
complex land-use planning projects of land reform  are designed.                
                                                                                
     Article 2. The Concept of a Land Lease Contract                            
                                                                                
     By a  land lease  contract the lessor shall obligate himself               
to permit   the  lessee to  temporarily use  the land,  while the               
lessee -  to use   the  land under the conditions provided for in               
the contract  and established   by  the laws  of the  Republic of               
Lithuania, and to pay land rent.                                                
                                                                                
     Article 3. The Form of a Land Lease Contract                               
                                                                                
     Land lease  contracts shall  be  concluded  in  writing  and               
registered   with the  institution which  keeps  the  State  Land               
Cadastre according   to  the procedure established by the laws of               
the Republic  of Lithuania  and the Government of the Republic of               
Lithuania.                                                                      
     In the  event that  the above  regulations are  not complied               
with, the  land lease contract shall be invalid.                                
     The plan  of the parcel of land subject to lease, the manner               
of designing   of  which shall  be established by the Ministry of               
Agriculture, must  be attached to the land lease contract.                      
     When land  is leased to natural and legal persons of foreign               
states,   the land  lease contract, at the request of the lessee,               
may be  executed   in two  languages: in  Lithuanian and  in  one               
foreign language. Should  a dispute concerning the text arise, it               
shall be settled on the basis  of the Lithuanian version.                       
                                                                                
     Article 4. Contents of Land Lease Contracts                                
                                                                                
     The following must be stated in a land lease contract:                     
     1) the lessor of the land;                                                 
     2) the lessee of the land;                                                 
     3) the  subject of  the lease  and the  data from  the  land               
cadastre characterising  the parcel of land subject to lease;                   
     4) the term of the lease of land;                                          
     5) the principal particular purpose of land utilisation;                   
     6) conditions for construction on the leased plot of land;                 
     7) conditions for land utilisation;                                        
     8) restrictions on land utilisation;                                       
     9) land easements;                                                         
     10) land rent and the procedure of payment thereof;                        
     11) other obligations of the lessor and lessee in connection               
with  the use and return of the leased plot of land; and                        
     12) liability for the violations of the land lease contract.               
                                                                                
     If plots  of agricultural  land are  leased for  more than 3               
years,  the   data  which   characterises  the   quality  of  the               
agricultural land  according   to the  indices  approved  by  the               
Ministry of Agriculture shall also  be included in the land lease               
contract.                                                                       
                                                                                
     The data specified in Pars. 1, 3, 5, 7, 8 and 9 hereof shall               
be recorded   in  the contract according to the data of the State               
Land Register.                                                                  
     In the  event that  a contract for the lease of private land               
is concluded,   the  above data may be recorded therein according               
to the  extract from   the  State Land  Register presented by the               
owner.                                                                          
     Land lease  contracts must  state the conditions of transfer               
of the   buildings,  facilities, plantations  of trees  and areas               
under crops   belonging  by ownership right to the former user or               
owner of  the land  or compensation therefor, as well as the date               
from which the use of  the leased land is to begin.                             
     When land designated for agricultural purposes is leased and               
the parcel   is  under crops, cultured plant grass, fruit-bearing               
fruit-trees and   bushes,  the lessee  may begin to use said land               
only after  the former   user  of the  land has  gathered in  the               
year's  harvest,   unless  the   land  lease   contract  provides               
otherwise.                                                                      
     In the  event that  the leased  land contains  buildings  or               
engineering   facilities and  lines of  communication  which  are               
owned by the State or a third person, or if it contains protected               
objects of  cultural   heritage or nature which are not connected               
with   the   lessee's   activities,   taking   the   above   into               
consideration, the  following must  be stated   in the land lease               
contract:  the   lessee's  rights,   obligations   and   activity               
restrictions.                                                                   
                                                                                
     Article 5. The Lessor of Land                                              
                                                                                
     The lessor of land shall be the owner or co-owner of private               
land,   town (district)  Board or  other State  institution which               
performs the   functions  of the  owner of  State-owned land, the               
manager of  the  State-owned  land  appointed  according  to  the               
procedure established  by law  and (when   land is subleased) the               
user of State-owned land.                                                       
     During the period of implementation of land reform and prior               
to the  approval of land reform projects of land-use planning for               
appropriate   territories, State-owned  land in rural localities,               
with the  exception   of land  allotted, on  the county Council's               
decision, for  use  in  the  residents'  private  holdings,  land               
assigned for  service allotments,   and  land allotted for use on               
the decision  of the  district Board  or   the Government  of the               
Republic of  Lithuania, shall  be leased  by the  Agrarian Reform               
Agency of the county.                                                           
     If a  plot of  land (or portion thereof) is owned by several               
persons   by the  right of joint ownership, it may be leased only               
on the  consent  of all of the co-owners. In such cases, the land               
lease contract shall  be signed by all the co-owners or by one of               
them, provided  that said   co-owner  has  a  notarised  document               
testifying to the consent of the  other co-owners. Disputes among               
the co-owners  of a  plot of  land shall  be settled in court. In               
                                                                                
the event  that the State is a co-owner, it  shall be represented               
by an officer appointed by the local government.                                
     If the  lessor of  a land  plot is a town or district Board,               
the land   lease  contract shall  be signed, on the commission of               
the Board,  by   the head  of the  district  Agency  of  Land-use               
Planning.                                                                       
                                                                                
     Article 6. The Leasing of State-owned Land by Competitive                  
               Bidding                                                          
                                                                                
     State-owned land  may be  leased by  competitive bidding  in               
accordance   with the  procedure established by the Government of               
the Republic of  Lithuania.                                                     
     Land shall be leased by competitive bidding provided that it               
is not   built  over with  structures owned  by  the  prospective               
lessee or  is not   built over with structures which are owned by               
other persons  and which   are not leased with the land, and that               
the land  is  not  planned  to  be  assigned,  according  to  the               
territorial  planning  documents,  to  the  land  tenure  of  the               
prospective tenant.                                                             
                                                                                
     Article 7. Land Tenants                                                    
                                                                                
     Citizens of  the Republic  of Lithuania  who are 18 years of               
age or  over,   or foreign  nationals who  possess a  permit  for               
permanent residence   in  the Republic  of Lithuania,  as well as               
enterprises, institutions,   organisations,  joint  ventures  and               
foreign capital  firms which  possess    a  licence  for  foreign               
investment in  the Republic  of Lithuania  and   which have  been               
registered in the established manner, may be land  tenants.                     
     Agricultural land  may be leased to citizens for the purpose               
of establishing  or expanding a farm, to agricultural enterprises               
and  other  enterprises    for  the  production  of  agricultural               
produce, and  to other  persons for   developing non-agricultural               
activities.                                                                     
     Land shall  be leased  to persons who are establishing a new               
farm only  after the preparedness for farming of said persons has               
been acknowledged   in  accordance with the procedure established               
by the Ministry of Agriculture.                                                 
     Land  tenants   must  observe   the  land  use  requirements               
established by   laws  for business  and other  activities taking               
into  account   the  territorial   planning   documents,   nature               
protection and public interests, and the  interests of the owners               
and users of the neighbouring land parcels.                                     
                                                                                
      Article 8. The Object of Land Lease                                       
                                                                                
     The  object  of  land  lease  shall  be  a  parcel  of  land               
registered in  the  State Land Register or a portion of such land               
parcel formed  in  accordance    with  the  project  of  land-use               
planning or any other document of territorial  planning.                        
                                                                                
     Article 9. The Term of Land Lease                                          
                                                                                
     The length  of the  term for  which land  is leased shall be               
established  by an agreement between the landlord and the tenant;               
however, the  term may not exceed 99 years.                                     
                                                                                
     Persons who  have had  their land  returned  to  them,  when               
concluding   a contract  in advance  for  the  lease  thereof  to               
agricultural enterprises   under the terms established by the Law               
on the Procedure and Conditions  of the Restoration of the Rights               
of Ownership to the Existing Real  Property, may lease the land:                
     1)  prior   to  the   termination  of   activities  of  said               
enterprises, if   the  leased land  has been assigned to the land               
purchased by the State;  and                                                    
     2) for  a term  of no  less than 3 years and no more than 99               
years.                                                                          
     If, according  to the  territorial planning  documents,  the               
land  parcel   is  set   aside  to   be  used  for  public  needs               
(construction, exploitation   of  mineral resources,  etc.), such               
land parcel  shall be  leased only   for a period which shall end               
prior to the appropriation of said land  for the above purposes.                
                                                                                
     Article 10.  Change of  the Pricipal  Particular Purpose  of               
Utilisation of Leased Land                                                      
     The principal  particular purpose  of utilisation  of leased               
land may   be changed only according to the procedure established               
by the  Government   of the Republic of Lithuania at the request,               
or upon  the consent,   of  the land owner. In the event that the               
principal particular  purpose   of utilisation  of leased land is               
changed arbitrarily,  the land  lease  contract may be terminated               
and the  lessee shall  be obligated  to restore  the land plot in               
its previous  condition so  that it  can be  used for  the former               
principal  particular  purpose  or  to  pay  the  funds  required               
therefor.                                                                       
                                                                                
     Article 11. Land Rent                                                      
                                                                                
     The amount  of rent  to be  paid for leased State-owned land               
shall be   established  according to  the procedure prescribed by               
the laws and  the Government of the Republic of Lithuania.                      
     The amount  of rent to be paid for leased private land shall               
be circumscribed  by the land lease contract.                                   
     An agricultural  enterprises shall  not have  the  right  to               
refuse to   take  on lease  the land  parcel which  is subject to               
being restored  to   private ownership and which, pursuant to the               
Law on  the Procedure   and  Conditions of the Restoration of the               
Rights of  Ownership to  the   Existing Real  Property, has  been               
assigned to the land purchased by  the State for the needs of the               
agricultural enterprise,  if the  amount  of land rent offered by               
the prospective  lessor does  not exceed  the  amount of rent for               
State-owned land  as established  for said  parcel  of land or is               
not in  excess of  the total amount of the land rent recorded  in               
the contract for the lease of State-owned land concluded with the               
previous lessor of the land and the State land tax imposed on the               
land owner.  Upon improving agricultural land or in any other way               
increasing   the value  of the  land subject to lease, the lessor               
may request  that  the land rent be raised, unless the land lease               
contract provides otherwise.                                                    
     For  a   lessee  who   with  his   own  funds  improved  the               
agricultural land  or in any other way increased the value of the               
leased land,  land rent   may  be raised  no ealier  than after 5               
years from the completion of  land improvement works or any other               
works which  increased the  value  of land, unless the land lease               
contract provides otherwise.                                                    
     The lessee  shall have  the right  to request  that the land               
rent be appropriately  lowered if, by reason of circumstances for               
which he  is not responsible,  the conditions of land utilisation               
as  established   in  the   contract  deteriorate  or  additional               
restrictions are imposed thereon.                                               
     The terms  and conditions of land rent for foreign investors               
shall   be regulated  by the  Law on  Foreign Investments  in the               
Republic of  Lithuania.                                                         
                                                                                
     Article 12. The Lessor's Obligation to Repair Land                         
               Reclamation  Facilities, Roads, Bridges and other                
               Engineering Facilities                                           
                                                                                
     The lessor  of land  must with  his own  funds  repair  land               
reclamation   facilities, roads,  bridges and  other  engineering               
facilities which   are  owned by him and which effect utilisation               
of the  leased land,   unless the laws or the land lease contract               
provide otherwise.                                                              
                                                                                
     If the  lessor fails  to fulfil  the above  obligation,  the               
lessee shall  have the right to perform repair works provided for               
in the  land lease   contract  and to recover from the lessor the               
costs of  the repair  work,   or to include the sum in the rental               
account, or  to terminate  the land   lease  contract and recover               
damages incurred by failure to implement  it.                                   
                                                                                
     Article 13. The Lessee's Obligation to Preserve the Soil                   
               and its Quality, and to Keep Land reclamation                    
               Facilities, Roads, Bridges,  other Engineering                   
               Facilities and Green Plantations in Good Order                   
                                                                                
     The lessee  shall have  no right  to perform  actions  on  a               
leased land   parcel  whereby the  fertile layer  of the  soil is               
damaged or polluted,  and must use the land in such a manner that               
the quality  of agricultural   land does not deteriorate, orderly               
use, maintain  and perform at his  own expense minor repair works               
of  land  reclamation  facilities,  roads,    bridges  and  other               
engineering facilities  and preserve  protective and  other types               
of green  plantations owned by the lessor, unless the land  lease               
contract provides  otherwise. If  the lessee  fails to fulfil the               
above obligations,  the lessor  shall have  the right  to recover               
from   him funds for performing the works specified above as well               
as recover   damages  incurred by  failure to  fulfil duties  set               
forth in this Article  and to terminate the land lease contract.                
                                                                                
      Article 14. The Lessee's Obligation to Pay Land Rent                      
                                                                                
     The lessee  of land must pay land rent by the date specified               
in the  land lease contract.                                                    
     The procedure  for paying rent for State-owned land shall be               
established  by the Government of the Republic of Lithuania.                    
     If privately-owned  land is  leased, the  lessee may  assume               
liability   to pay land tax for the lessor at the expense of land               
rent or  discharge   other lessor's  monetary liabilities  to the               
State.                                                                          
                                                                                
     Article 15. The Rights of Land Lessee                                      
                                                                                
     Unless the  lease contract provides otherwise, the lessee of               
land shall  acquire the following rights:                                       
     1) to  use  the  land  parcel  according  to  the  principal               
particular purpose of land utilisation for the activity permitted               
under law;                                                                      
     2) to  use agricultural  land of  the land  parcel  for  the               
production   of agricultural  produce, to  dispose of the produce               
and of the income  received from land;                                          
     3) to  build buildings, structures, facilities and roads and               
install     water  bodies   required  for   his  activities  upon               
coordination of  the  above actions in the established manner and               
with the consent of the  land lessor; and                                       
     4) to  use, for  the needs  of his  farm (but not for sale),               
surface and   subterranean  waters, mineral  resources (with  the               
exception of  amber,   oil, natural gas and quartz-sand) found on               
the land  parcel as  well   as other  useful  properties  of  the               
entrails of  the earth  in accordane   with  the requirements set               
forth in laws and other standard acts.                                          
     The  exploitation,   sale  and   leasing  of  other  natural               
resources located   on  the land  parcel shall  be  regulated  by               
appropriate laws and standard  acts.                                            
                                                                                
     Article 16. Sublease of Land                                               
                                                                                
     Upon leasing land designated for agricultural purposes for a               
period  in excess of 3 years, the lessee may sublease the land to               
a third  person and only for the term of 3 years.                               
     Natural and legal persons specified in Article 7 of this Law               
may be  sublessees.                                                             
     Land  designated   for  agricultural  purposes  may  not  be               
subleased for  any other purpose.                                               
     A contract  of the  sublease of  land shall  be concluded in               
accordance   with the requirements established for the land lease               
contract.                                                                       
     The sublessee  shall pay  to  the  sublessor  rent  for  the               
subleased land   according  to the  procedure established  in the               
contract. In  the event  that State-owned land is subleased, rent               
for the  subleased land may  not be in excess of the rent for the               
leased State-owned lans set to  the lessor.                                     
     Upon the  expiry of  the term  of the sublease contract, the               
sublessee   shall have  no right  to request  that  the  sublease               
contract be renewed.                                                            
                                                                                
     Article 17. Reimbursement of the Lessee's Funds Used for                   
               the Improvement of Land Designated for                           
               Agricultural Purposes                                            
                                                                                
     The  lessee's   funds  used  for  the  improvement  of  land               
designated for  agricultural purposes  shall be  reimbursed  only               
provided that,  prior   to the  commencement of  land improvement               
works, both parties agree  on the character and scope of the work               
and the amount of costs thereof.                                                
                                                                                
      Article 18. The Lessee's Right to Compensation for Built                  
               Buildings, Structures and Facilities                             
                                                                                
     Upon the  expiry of  the term of land lease or when the land               
lease contract  is rescinded prior to the expiry of its term, the               
owner of  the land   must  compensate the  lessee for  the  built               
buildings, stuctures  and   facilities or  he  may  use  them  by               
easement if  this was provided for  in the land lease contract or               
in a supplementary written agreement.                                           
     Disputes concerning  the amount  of  compensation  shall  be               
settled in  court.                                                              
                                                                                
     Article 19. Validity of the Land Lease Contract upon the                   
               Death of the Lessee                                              
                                                                                
     Upon the death of the lessee, the rights and duties incident               
to the   lease contract shall, upon the lessor's consent, descend               
to the  heirs   of the  lessee who must present, according to the               
procedure established   by  the Government  of  the  Republic  of               
Lithuania, data  for the  revision   of records in the State Land               
Register. The  right to  lease land  designated for  agricultural               
purposes may pass only to the heir of the deceased lessee of land               
who meets  the requirements  specified in part 2 of Article  7 of               
this Law.                                                                       
                                                                                
      Article 20. Validity of the Land Lease Contract upon the                  
               Change of the Lessor                                             
                                                                                
     Upon the death of the land owner, or upon the passage of the               
land   ownership right to another owner in the case of conveyance               
of land   or  bankruptcy, or  upon the  change of  the lessor  of               
State-owne land,   the  land lease  contract shall continue to be               
binding to  the new owner  of land or lessor of State-owned land.               
The lease contract may be terminated  only in the cases and under               
the terms specified in Article 22 of this  Law.                                 
                                                                                
     Article 21. Prohibition to Lease Mortgaged Land                            
                                                                                
     Upon the  failure of  the owner of mortgaged land to satisfy               
debt obligations   by the date fixed in the mortgage contract and               
after he  receives from    the  agency  to  which  the  land  was               
mortgaged a  notification to the effect  that upon his failure to               
repay the  debt within  a two  months period   the mortgaged land               
will be sold by auction, said land may not be leased.  Land lease               
contracts concluded  in violation  of the above restraint  may be               
declared invalid by court.                                                      
                                                                                
     Article 22. Termination of the Land Lease Contract                         
                                                                                
     The land lease contract shall terminate:                                   
     1) upon  the expiry  of the  term of  lease,  if  the  lease               
contract was   not prolonged within one month after the expiry of               
the term;                                                                       
     2)  upon  the  death  of  the  lessee,  if  the  rights  and               
obligations incident   to  the lease  contract do not pass to the               
heirs or if there are no  heirs, or if the heirs of the lessee of               
land designated  for agricultural    purposes  do  not  meet  the               
requirements set forth in Article 7 of this  Law;                               
     3)  upon   liquidation  of  the  entrprise,  institution  or               
organisation  which were the lessees of land;                                   
     4) upon  the sale  of the  leased land, or its transfer as a               
gift or  in any other way to the lessee; and                                    
     5) upon  the termination of the land lease contract in cases               
provided  for in Article 23, 24 and 25.                                         
     The  contract   for  the   lease  of   land  designated  for               
agricultural purposes   may  be terminated  only after the lessee               
has gathered in the year's  harvest.                                            
                                                                                
     Article 23. Termination of Land Lease Contract upon the                    
               Taking of Land for Public Use                                    
                                                                                
     When the leased land is taken for public use, the land lease               
contract  shall   be  terminated  and  compensation  for  damages               
according to the procedure established by law shall be determined               
for the lessor and  the lessee.                                                 
                                                                                
      Article 24. Termination of Land Lease Contract at the                     
               Lessor's  Request prior to its Expiry                            
                                                                                
     The land  lease contract  may be  terminated at the lessor's               
request  prior to its expiry if the lessee of land:                             
     1) fails  to pay  land rent  within a  period in excess of 3               
months, if   the  leased land  is privately-owned,  or  within  a               
period in excess of  6 months, if the leased land is State-owned,               
after the  date when the  rent is due and payable as fixed in the               
land  lease   contract,  or   if  he  fails  to  discharge  other               
liabilities specified in part 3 of Article  14 of this Law;                     
     2) arbitrarily  changes the  principal particular purpose of               
land utilisation;  or                                                           
     3) fails  to fulfil  the obligations specified in Article 13               
of this  Law.                                                                   
     A land  lease contract  with natural  and legal  persons  of               
foreign states   shall be terminated if their licence for foreign               
investment is revoked.                                                          
     Upon the  termination of  a land  lease contrsct  the lessor               
shall have  the right to recover losses incurred by him.                        
     A land  lease contract  may also  be terminated prior to its               
expiry if  land designated for agricultural purposes is inherited               
by a  farmer  or a person whose preparedness to engage in farming               
has been  confirmed   in the established manner and provided that               
the above  persons desire  themselves to engage in farming on the               
leased land. In the above case,  if the contract is due to expire               
after more  than a  year,  the  lessor  must  pay  the  lessee  a               
compensation amounting  to 2  years' average net  income received               
from the leased land parcel.                                                    
                                                                                
     Article 25. Termination of a Land Lease Contract at the                    
               Lessee's Request prior to the Expiry of its Term                 
                                                                                
     A land  lease contract  may be  terminated at  the  lessee's               
request prior  to the expiry of its term provided that the lessee               
of  agricultural   land  designated   for  agricultural  purposes               
notifies the  lessor thereof  no later than before 6 months, and,               
in the case of land designated  for other purposes, no later than               
before 3 months.                                                                
     A land  lease contract  may be  terminated at  the  lessee's               
request prior  to the expiry of its term if the land lessor fails               
to fulfil the obligations  specified in Article 12 of this Law.                 
                                                                                
     Article 26. The Priority Right of the Lessee of Land to                    
               Prolong the Land Lease Contract                                  
                                                                                
     If, upon  the expiry  of term of the lease contract, several               
other persons  besides the previous lessee apply for the lease of               
the land  under   identical conditions,  the previous  lessee who               
orderly fulfilled  obligations   under the  lease contract  shall               
have the right of priority.                                                     
     Disputes concerning  the prologation  of land lease contract               
shall be  resolved by court.                                                    
                                                                                
     Article 27. Investigation of Disputes Concerning Land                      
               between  the Lessors and Lessees of Land                         
                                                                                
     Disputes concerning  land between the lessors and lessees of               
land as   well  as disputes  concerning  the  contents  of  lease               
contract, compliance   with  the terms and conditions thereof and               
liability  shall  be  investigated  according  to  the  procedure               
established by the Republic of Lithuania  Law on Land.                          
     Disputes concerning  land arising from civil matters may, by               
agreement   between the  parties, be referred to the arbitration.               
The regulations   of  the arbitration  shall be  approved by  the               
Government of the Republic  of Lithuania.                                       
                                                                                
     Article 28. Control over the Compliance with the Land Lease                
               Contracts                                                        
                                                                                
     Town and  district  local  governments  and  State  land-use               
planning agencies shall exercise control over the compliance with               
the contracts of lease  of State-owned land.                                    
                                                                                
                                                                                
                                                                                
     I promulgate  this Law  passed by the Seimas of the Republic               
of  Lithuania.                                                                  
                                                                                
                                                                                
                                                                                
ALGIRDAS BRAZAUSKAS                                                             
President                                                                       
of the Republic                                                                 
                                                                                
Vilnius                                                                         
23 December 1993                                                                
No. I-354                                                                       
                                                                                
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