Luxury property of enemies after arrest: ARMA’s managerial failure and the price of protracted procedures

While the displaced are looking for housing, the seized real estate of traitors, Russian generals and oligarchs has been closed for years or is stuck in endless ARMA procedures. Some of these objects could have been used for the state budget for a long time, but after their high-profile arrests, the state is demonstrating not rapid asset management, but protracted bureaucratic real estate, in which square meters lose value faster than officials find solutions for them.

Empty estates of enemies: how seized real estate is stuck in the hands of the state

The seized apartments, houses, office centers, hotels, restaurants, land plots and other objects associated with Russian generals, oligarchs and Ukrainian traitors, after high-profile decisions, should have become a real resource for the state, and not beautiful statistics in official reports. In many cases, such real estate has become an expensive monument to bureaucracy, because it was legally withdrawn from circulation, transferred to the control of the state, but it has not actually been converted into its income for years and has not been used for people whose homes were destroyed by the war.

The property of Russian Colonel General Valery Kapashin looks especially indicative due to the scale and duration of the administrative pause that occurred after his arrest. In Poltava and the region, dozens of objects are associated with him: residential and commercial real estate, offices, restaurants, hotel premises, land plots and other assets that, under normal management, could provide money to the state or perform a social function. Part of this property was estimated at hundreds of millions of hryvnias, and 11 assets with a total value of over 679 million hryvnias were put up for search for managers only in 2025, although the transfer to the management of the Asset Tracking and Management Agency (ARMA) took place much earlier.

After the arrest, the big news very quickly falls into a slow clerical stream, where public interest collides with procedures, assessments, competitions and postponed decisions. For citizens, the property of the Russian general is perceived as an obvious resource for the country, but for the state machine it has become a protracted competition and another phrase about the search for an effective manager.

The real estate of the former Minister of Internal Affairs Vitaly Zakharchenko, who fled Ukraine after the Revolution of Dignity, adds another sharp contour to this story. His property was arrested back in 2021, and the ARMA announced competitions for the management of individual facilities only in 2025. Four years for an arrested house is not just a gap between legal actions. During this time, the facility ages, requires protection, loses its attractiveness for business, and the state actually keeps a problem on its balance sheet instead of an asset.

Zakharchenko’s house, which could work for the country, has been waiting for a management model for years, and after announcing the competition, it did not find anyone willing to manage it. This result indicates not only the indifference of the market, but also late preparation, weak economic logic and the lack of a convincing answer to what the state wants from this property.

Odessa real estate, associated with Russian and pro-Russian figures, adds another important touch to this picture. Open messages included the arrested apartment of Russian Lieutenant General Mikhail Dmitriev, who held the position of Deputy Minister of Defense of the Russian Federation General.

This is a giant two-story penthouse with an area of ​​1012.6 sq. meters, located in an elite business-class building near the sea coast in the prestigious district of Odessa – Otrada. After the general’s family was sanctioned by the National Security and Defense Council in 2023, in April 2024 the Kyiv District Court of Odessa imposed an arrest on the property, and in September 2024 the apartment was officially transferred to the management of ARMA. In 2026, the competition for the management of General Mikhail Dmitriev’s Odessa penthouse continues. At the same time, an official manager for the property has not yet been found.

A similar situation exists with the sale of housing associated with Russian oligarch Mikhail Shelkov and collaborator Volodymyr Saldo for almost 7 million hryvnias through an electronic bidding system. This case shows that arrested property can be monetized when the procedure reaches a practical result. The problem is that such stories look like exceptions, not stable practice.

Volodymyr Saldo became one of the most famous Ukrainian collaborators after the occupation of part of the Kherson region, so any property associated with him has more than just financial significance for society. When a traitor’s apartment or house does not provide any benefit to Ukraine for years, it is perceived as mismanagement by state authorities after the fact of treason. In such cases, the state must show not only the arrest, but also the result, which can be measured in money, housing, or specific public benefit.

In these and other cases, the state often goes through the first stage quite loudly: it finds, arrests, transfers assets to the ARMA. Then begins the much more complicated part, which requires speed, a sober economic model, and public responsibility. Property that should work as a resource hangs in the gray zone between a court decision and the real result. Such a zone is convenient for reports, but destructive for trust.

The Assets Tracing and Management Agency was not created to be a warehouse for other people’s property. Its task is to preserve the economic value of seized assets and transfer them to management so that they do not deteriorate and bring benefits. In theory, this model is understandable: the state does not wait for years for a verdict, but temporarily manages the property, receives income, maintains the asset in proper condition, does not allow the owners or persons related to them to regain control. In practice. As we can see, a different picture emerges: the asset is transferred, a competition has not been held, a manager has not been found, there is no result.

Against the backdrop of the housing crisis caused by the war, such slowness looks especially sharp. Millions of Ukrainians have been forced to leave their homes, hundreds of thousands of people have been living in temporary conditions for years, communities are looking for dormitories, old sanatoriums, schools, modular towns, any suitable premises. At the same time, Ukraine has seized houses, apartments, hotels and other facilities, some of which have not been used properly for years. The contrast between empty square meters and people without housing is too obvious to be hidden behind procedural explanations.

The government’s decision to transfer 112 state and seized real estate, including assets managed by ARMA, for the resettlement of internally displaced persons was an important signal. The list mentioned communal houses, hotel and office premises, and public buildings in various regions. The emergence of such a decision effectively acknowledged the obvious: some of the idle real estate can work for people. At the same time, it is unclear why it took years of war, public pressure and hundreds of stories about unused assets to reach such a conclusion?

ARMA’s inaction rarely looks like a direct refusal to do something, because more often it is hidden within formally correct procedures. First, the asset must be accepted, then evaluated, then inspected, then prepared for a tender, then a manager must be found, then a contract must be concluded, then the implementation must be monitored. Each of these stages individually may seem logical, but together they often form a labyrinth in which the meaning is lost. The goal is not the number of actions taken, but to make the property work.

The complexity of managing seized real estate cannot be ignored, because not every object automatically becomes attractive to business or the community. An elite house may require expensive maintenance, security, repairs, legal guarantees, insurance, resolving issues with land or communications. Commercial premises may be difficult to rent if its reputation is associated with a toxic owner or if the documents contain risks. However, this is what a state agency exists for, so as not to wait for the ideal investor, but to prepare the asset for management so that the market or the community sees clear conditions.

After a failed tender, the state should quickly change its approach: divide the lots, clarify the conditions, involve communities, offer social use, transfer part of the objects for housing for displaced persons, military personnel, rehabilitation centers or other needs, if the law allows it. In many cases, the opposite impression is formed: the failure of the tender becomes not a reason for a new model, but a convenient pause, after which the asset disappears from the public field again.

In this situation, society gradually ceases to believe in the practical meaning of arrests, when after loud news about the property of a Russian general worth hundreds of millions of hryvnias, a year or two later it sees only a message about the search for a manager. The state seems to be showing the keys to the enemy’s house, but cannot open the door to those who need it. For a country at war, this is not a technical weakness, but a managerial failure with a human cost. Behind each empty house is not only lost rent or a depreciated object, but also a specific opportunity that the state did not use.

Reasons why seized housing does not work for the state for years

The problem of ARMA does not begin with a single unsuccessful tender or one neglected estate, but with a management model in which the seized asset too easily turns into a paper object without a real owner. The agency can keep property for years in the preparation stage for transfer, without having a hard deadline after which officials would have to explain the failure. In such a system, empty luxury property of enemies or the elite estate of a sanctioned businessman hang in a convenient gap: formally the state controls them, but in fact they do not bring a single hryvnia and do not solve any social need.

For years, the discriminatory conditions of tenders have weeded out those who could work with residential real estate quickly and professionally in practice. Potential managers were required to have a separate office, full-time employees with higher education, and experience working under contracts under the Civil Code of Ukraine, which are almost never used in the ordinary commercial sector. For a large structure, such conditions could still be met, but for a private realtor or sole proprietor who rents, maintains, and promotes apartments on the market every day, they became an artificial barrier. As a result, the state seemed to be looking for a manager, but wrote the rules in such a way that real market players would not reach the finish line.

The preparation of seized housing for transfer to military and internally displaced persons failed where it should have been the simplest proof of the benefits of ARMA. In 2025, the government allowed the transfer of such property under a simplified procedure without competitions, but the relevant anti-corruption committee of the Verkhovna Rada stated that the agency did not do the basic work: it did not identify the objects, did not determine their market value, did not assess the technical condition. Because of this, the decision, which could quickly turn empty apartments into housing for people, rested not on complex politics, but on the lack of elementary accounting.

The situation with the register of arrested assets shows why the state often does not know what it actually owns after judicial arrests. The single state register worked intermittently, the data was kept chaotically, the technical condition and exact coordinates of some of the real estate remained irrelevant or incomplete. When an institution does not have a clean map of its own assets, it is unable to quickly decide what can be rented out, what needs repair, what is suitable for displaced persons, and what should be sold after legal procedures. Without proper accounting, management turns into a movement in the dark, where each next step requires a new check.

The underestimation of the economic return on expensive assets has become another symptom of systemic weakness. For example, Viktor Medvedchuk’s Transcarpathian complex “Vedmezha Dibrova”, estimated at 493.5 million hryvnias, was transferred in 2025 to a company that appeared in the case of embezzlement of funds from the Armed Forces of Ukraine. In five months, the budget received less than a million hryvnias from this facility, although according to market estimates, the potential income could have been many times greater. Such an example destroys ARMA’s main argument about preserving value: if an expensive asset gives the state pennies, then the question is no longer in the seizure, but in the quality of management after it.

The agency’s legal passivity works in favor of the old owners much more effectively than their public statements. When ARMA fails to assess the property for years, does not initiate the transfer to management, and does not demonstrate to the court the practical meaning of the seizure, the lawyers of sanctioned persons receive a strong argument: the asset is blocked, but the state does not manage it. In such conditions, the courts can lift the seizures, as happened with Pavlo Fuksa’s estate in Kozyn worth 214 million hryvnias. Oksana Marchenko’s Kiev apartments also figured among the examples of delayed assessment, due to which the seized property did not go into normal use for years.

In addition, the lack of control over the preservation of property opens the door to gray schemes, in which an officially empty house can actually bring income to outsiders. Stories with seized property show that without constant supervision, transparent contracts, and quick transfer to the manager, the asset becomes a convenient territory for informal use. The state officially has an arrested object, but the state budget does not receive money, and someone can use the property through a shadow sublease or other agreements that do not go through official accounts.

Corruption risks increase every time an arrested asset is in an uncertain state for a long time. Prolonged inactivity gives former owners time, their lawyers arguments, and intermediaries space for informal earnings. According to available estimates, a significant part of management contracts does not bring profit to the state, and about a third may have zero return for the budget. In such a structure, not only the state as the owner of temporary control loses, but also society, which hears about the arrest of enemies’ property, but does not see where its value disappears.

Personnel and reputational claims against the ARMA leadership increased distrust of each decision of the agency. Civil society organizations have repeatedly stated the risks of nepotism, closed communications, and possible contacts with representatives of sanctioned individuals in matters of preserving assets from confiscation. Even when such allegations require separate legal verification, their appearance against the background of empty estates, failed tenders, and weak revenues creates a toxic atmosphere. For an institution that manages the property of enemies and those involved in criminal cases, reputational opacity becomes not a trifle, but a direct threat to trust.

The economic picture of ARMA’s work looks particularly alarming due to the imbalance between high-profile reports and the real profitability of most assets. The agency may report billions in revenues, but the audit showed that almost all of its revenues are provided by one large asset — PJSC Ukrnafta. Against this background, thousands of other properties, including luxury housing, commercial real estate, and expensive complexes, remain financially dead. This result is more like a chance success from a single resource than a systematic ability to manage a portfolio of seized property.

The low efficiency of bidding through Prozorro.Sales also explains why even formally open competitions do not save the situation. Only a part of the announced procedures is successfully completed, and big business and international networks often bypass ARMA assets due to legal uncertainty, the risk of lawsuits from previous owners, and weak guarantees of stable management. For a serious investor, an seized estate or hotel may look not as an opportunity, but as a future legal conflict with an unknown ending.

The reform of the manager market, launched through draft law No. 12374-d and related amendments in 2025–2026, was supposed to clear some of this debris, but its launch ran into bylaws. Without decisions of the Cabinet of Ministers, new transparent selection procedures through Prozorro cannot work fully, and old practices continue to live by inertia. When the agency’s management is accused of sabotaging such acts, it looks especially dangerous: an institution that is being reformed due to inefficiency gets the opportunity to slow down the tools of its own correction.

The story with the real estate of Russian Lieutenant General Mikhail Dmitriev shows that back in October 2025, ARMA tried to find a manager for his elite penthouse through Prozorro. The acceptance of proposals was supposed to end on October 22, but the competition actually failed: neither large real estate companies nor hotel operators entered it.

As a result, as of May 2026, the penthouse still stands empty, while the property under state care does not earn anything, although it could bring the budget at least 200–300 thousand hryvnias from rent every month. While ARMA is preparing new documents, the state is not actually managing the asset, but simply storing it.

The current course of the audit has already shown how deeply the problems have accumulated within ARMA. Several inspections are underway at the same time: an institutional assessment of the agency’s functions, an audit of the register of seized assets, monitoring of Ukraine Facility indicators, and internal operational control. Under the pressure of this attention, the agency conducted its first large-scale inventory and assessed 89% of assets that had been on the balance sheet for years without a defined value. The very fact that such work had to be done only during the audit speaks volumes about the previous level of management discipline.

It should be noted that the ten-year absence of a full-fledged external audit explains why the ARMA problem has become so neglected. The norm on mandatory inspection existed in the first version of the law in 2015, but over the years the President, the Cabinet of Ministers, and the Verkhovna Rada have not formed a commission to conduct an assessment. Only under pressure from European obligations in 2025 were the rules revised, and Law No. 4503-IX restarted the mechanism involving international experts. It turns out that the agency had been operating for almost ten years without the regular external audit that was supposed to curb chaos, errors, and abuse.

At the same time, the change in ARMA leadership at the audit stage created a separate personnel conflict. The audit was launched after the period associated with Olena Duma, but at the time of active procedures, the agency was already headed by the acting head Yaroslav Maksymenko. Because of this, a possible negative audit conclusion may lose some of its direct personnel effect, because the mechanism for dismissing the head looks less effective when there is no full-fledged head. For society, such a situation is unpleasant: the audit may be called a failure, but the issue of personal responsibility risks dissolving again between positions, dates, and formalities.

So, the main reason for the inefficiency of ARMA lies in a combination of three things: weak accounting, lengthy procedures, and the lack of personal responsibility for downtime. When the agency does not know the exact state of the property, it cannot quickly manage it. If the competitions are structured in such a way that market players are eliminated, the assets do not receive managers. In a situation where no one loses their position or is responsible for lost income during years of downtime, the system has no internal incentive to move faster. Because of this, the seized housing of Russian generals, oligarchs, and traitors does not work as a resource for a warring country, but lies in the state waiting corridor, where time plays against the state budget, displaced persons, and the very idea of ​​justice.