83 squares for millions: how renting a room in Chernivtsi turned into a four-year lawsuit and hurt the community?

The court found the officials’ decision unlawful, and the community may have to pay – investigation

Over 2 million hryvnias of potentially lost city budget revenue, four years of litigation, and new demands for compensation. This could be the bill for the Chernivtsi community for the story with a municipal premises measuring only 83 square meters in the city center. How much the city government spent on legal battles is still unknown. Who will bear responsibility for the consequences, officials say.

More details – in the report by Dariya Kondratyuk for "Stop corruption TV."

The story began in June 14 of 2022 year. That day an auction for the renewal of the lease of a premises on the first floor of a building on Stepan Bandera Street, 5, with an area of 83,4 square meters, took place. The starting price was 5 621,50 hryvnias.

Three participants took part in the auction. The highest bid, 61 001 hryvnias, was offered by Natalya Vargotska. Larisa Nagornyak placed exactly 61 thousand, i.e., one hryvnia less.

However, on 21 June the Department of Municipal Property of the Chernivtsi City Council disqualified Vargotska: they explained she had not submitted documents mandatory under the auction terms. The electronic system automatically designated the next participant, individual entrepreneur Larisa Nagornyak, as the winner. On 19 July 2022 year the department concluded lease agreement No. 72 with her.

Then, instead of handing over the premises, a multi-year court battle began. Nagornyak effectively received the object with an act of acceptance-delivery only on 1 August 2025 year, more than three years after signing the agreement. This was preceded by decisions of the Economic Court, the court of appeals, and the Supreme Court in case №926/2191/24.

Three years of idling: how much the budget lost

The lease rate set at the auction was about 60 thousand hryvnias per month. Over 36 months, the city could have received approximately 2,16 million hryvnias. That is the calculation journalists cited in a request to the State Audit Service.

These funds could have gone to community needs: support for the military, drone purchases, repairs of shelters, schools, or kindergartens. This amount does not include court costs yet. How much budget money went to court fees and legal support for all cases around the premises, the journalists separately asked the city council.

The contract is invalid, but bills keep coming

After the premises were transferred in August 2025 year, Larisa Nagornyak began paying rent and investing her own funds in preparing the object for operation. According to documents, she paid a total of 554 838 hryvnias in rent. In addition, the case materials indicate expenses for participating in the auction, design documentation, franchising, and construction works totaling 917 632,73 hryvnias.

11 February 2026 year the Chernivtsi Appeal Court found lease agreement No. 72 invalid. In the ruling, the court, among other things, concluded that the Department of Municipal Property unlawfully disqualified the participant with the highest bid. In other words, the ruling from which the whole story began the court deemed unlawful.

After that, Nagornyak appealed to the Economic Court demanding the return of funds and compensation for damages. She stated:

917 632,73 hryvnias of actual costs and damages;

100 000 hryvnias of moral damages;

554 838,28 hryvnias of rent paid.

30 July the Economic Court of the Chernivtsi region partially granted the claimant's suit.

In a request to the DSA journalistic team estimated the total potential financial impact of this story on the budget at over 3,2 million hryvnias. This amount consists of 2,16 million potentially lost rent and compensation payments related to damages to the entrepreneur. At the same time, this is the editors’ calculation based on available documents, not the court-approved amount of budget damages.

The ruling of the first instance did not satisfy Nagornyak. Her lawyer, Vladyslava, said: "My client and I do not agree with the court’s decision. We will certainly appeal it." Appellate complaints from the parties have already been filed, so the dispute is not over.

The lawyer also drew attention to a legal clash. The contract with Nagornyak was concluded by the Department of Municipal Property, and the suit for returning the premises was filed by the Chernivtsi City Council itself. According to her, it is incomprehensible why the city council represented interests in this process. Nevertheless, in the full text of the court decision the court separately explained why the city council as the owner of municipal property had the right to demand its return.

"Double rent": the Department’s position

A separate issue concerns payments. After the contract was deemed invalid, the Department continued to accrue rent on Nagornyak, and the entrepreneur paid it. Journalists asked the head of the Department of Municipal Property Vadym Russ about it.

The official explained that for the Department, the decisive factor is not the court decision, but the act of acceptance-delivery. "From the moment we handed the premises to the person... we begin to accrue rent. And on the day the act of returning the premises is signed... rent stops accruing," Russ said.

Moreover, according to him, if a tenant does not vacate the premises on time, additional charges may accrue. "If a person should vacate by the fifteenth—on the sixteenth they incur double rent... Then, if the person appeals, we will come to court with all these calculations," he explained. So the court saga could spawn another financial dispute.

When asked whether the Department had tried to determine how their decisions 2022 year resulted in four years of court fights, Russ replied that the legal department handles court cases and answering would require pulling all documents. No internal audit was conducted within the Department. That is, the court already found the Department’s decision unlawful, but there was no internal check.

The Department does not plan to stop. "We will go to the end until we put a full stop," Russ said. How much this legal history has already cost the budget was not disclosed during the conversation. Journalists filed official requests for the full list of court cases, costs for their support, and documents on lease payments.

The mayor is not authorized, the lawyer is not either

The main question remains: why is there such principled litigation around a small municipal premises for the fourth year? Officials have not answered. People familiar with the history speculate that such perseverance may indicate special interest in this particular object. There is no documentary evidence of private interest of Román Klychuk or other officials in this premises yet.

During a previous business trip, journalists asked the city mayor Román Klychuk. He advised turning to lawyers. The lawyer who represents the city council in court could not answer either: he said he is only a city hall lawyer and not authorized to comment.

After the new court decision, journalists returned to Chernivtsi and directly asked the mayor whether he believes it is appropriate that errors made during the auction grew into a multi-year legal campaign with financial consequences for the community, and who should be held accountable. There was no substantive on-camera answer again: Klychuk suggested making an official request. Journalists filed a request addressed to him personally, as well as another request regarding budget costs for the courts.

Deputies: "first we will study the documents"

At the city council session, journalists handed materials to deputies and asked them to evaluate the actions of officials. Most interviewees admitted they had not yet studied the details and first need to study the documents. Some deputies said they would join if a separate commission to review this history is initiated.

The first response to the appeal was sent by Dmytro Bilous, a deputy of the Chernivtsi City Council. However, there are no concrete decisions yet regarding a separate review of the situation or checks of officials’ actions. The assessment of this history remains largely within the realm of legal cases. Whether it becomes a subject of parliamentary oversight depends on whether appropriate procedures are initiated in the city council.

What the controllers and law enforcement say

Journalists also reached out to state authorities.

The State Audit Service said that a planned audit or inspection of the Department of Municipal Property for the third quarter 2026 year is not planned. At the same time, the appeal was entered into the risk database for possible consideration during planning future control activities.

The State Fiscal Service forwarded the appeal concerning the Department and the city council to the Main Department of the State Tax Service in the Chernivtsi region for review.

The National Anti-Corruption Bureau responded that at this stage there is not enough objective data to establish criminal offenses under investigation by the Bureau. Therefore, there are no grounds for a pre-trial investigation yet.

Thus, the question of potential personal liability of officials remains open.

The mayor’s business and questions of transparency

Another issue journalists raised in the previous investigation. Mayor Román Klychuk remains the ultimate beneficial owner of a number of companies tied to business in Chernivtsi. Therefore, decisions of the city government regarding municipal property and the conditions for conducting business in the city require special transparency.

Among the journalists’ sources familiar with the history, there is speculation that the principled fight exactly for this premises could be connected to someone’s special interest in the object. The editors note: there is no documentary evidence of Román Klychuk’s or other officials’ private interest in this premises yet.

After journalists’ request, this information was checked by the NACP. The Agency did not establish factual data indicating that after transferring corporate rights to management Klychuk continued to personally manage the economic activities of the relevant companies. Regarding questions about possible use of official position, the NACP noted that their legal assessment falls within the competence of law enforcement agencies.

The bill that has not yet been issued

What is illustrative in this story may be not only its outcome, but also the city authorities’ attitude to the information they are presented with. This is evident, in particular, from a fragment of a session broadcast. And this is not the only situation when questions arise about implementing city council decisions.

Meanwhile, the litigation continues. Whether the appeal will put a final dot, remains unknown. Questions are piling up. Why did the dispute over 83 square meters drag on for four years? Why did the fight not stop after the court found the Department’s decision unlawful? How much will it ultimately cost the budget? And will anyone bear personal responsibility?

Journalists are awaiting answers about the real amount of budget expenditures and will monitor the appeal and whether the deputies create a separate commission.