international experience in
TRANSCRIPT
International Experience in
Registering Property Reform
Gavin Adlington
August 24, 2016
Contents
1. Property Rights and the Economy
2. Property Rights Registration Issues in South
Africa
3. The Doing Business Indicators
4. Good Practice Examples Internationally
5. The Example of Russia
6. Some Questions or Challenges
Nearly two-thirds of a nation’s capital wealth is derived from its
property assets. Recording, managing and using property assets
effectively are crucial. Land and property markets, including
construction, may contribute as much as 15% to GDP in a
developed economy, and, returns to property are often greater
than returns to stock and bonds.(The Economist, May 2003).
As an example, investment financing (or loans) secured by charges
upon the properties (mortgages) form the principal financing
mechanism available to the private investor. In countries such as
the USA, the value of mortgages were equivalent to 86% of the
GDP in 2007, and 69% in 2012. For the EU27 countries, these ratios
were 49% in 2007, and 52% in 2012. In South Africa the figure is
currently about 20% and in the UK it is 69%.
Property rights and the Economy
Property markets in South Africa are
limited
• The populations of the UK and South Africa
are similar
– In the UK, the buying and selling of property
averages about 5% per year. i.e. about 1.3 million
sales per year.
– In Europe as a whole the figures vary between 3%
and 5%.
• In South Africa the figure is about 1% to 1.5%,
i.e. about 300,000 sales per year.
Contents
1. Property Rights and the Economy
2. Property Rights Registration Issues in South
Africa
3. The Doing Business Indicators
4. Good Practice Examples Internationally
5. The Example of Russia
6. Some Questions or Challenges
High professional standards in South
Africa – for registering property rights
• Education, capacity and standards of the
professional community is high by any
international standard
• Existing systems work well for those that can
afford them, although they have not kept pace
with changes in OECD countries over the last
30 years and are somewhat slow and
bureaucratic, and the costs are quite high.
Constraints in South Africa include:
• Small percentage of people actually register either their property rights or transactions with those rights –Maybe less than 25%– Unaffordable to most – can not afford conveyancers,
surveyors or taxes
– Inaccessible to many – no local access, especially if parties are working all day
– Too many constraints in the process – clearances, certificates needed, etc.
– Takes too long – most people can not take so much time off work
– Lack of awareness – many people just do not know official requirements
Conveyancers overprotected
Getting clearances certificates for property tax payments, utilities payments,
electricity compliance and entomology is highly unusual and not seen in best
practice countries.
Principle of caveat emptor (buyer beware) applies in South Africa and in most
countries it is the duty of the Conveyancer to check these things.
Deeds registry triple checks deeds that are produced by professional licensed
conveyancers and then requires them to come to the office and sign in front
of the registrar!
Little incentive for conveyancers to provide services to low income people and
for low value properties.
Contents
1. Property Rights and the Economy
2. Property Rights Registration Issues in South
Africa
3. The Doing Business Indicators
4. Good Practice Examples Internationally
5. The Example of Russia
6. Some Questions or Challenges
Doing Business Indicators
• From 2005 to 2015
• Ranking Introduced in 2009
• Distance to Frontier (DTF) Introduced in 2015
• Quality Index Introduced in 2016
1/3 Procedures 1/3 Time 1/3 Cost
1/4
Procedures 1/4 Time 1/4 Cost 1/4 Quality
Contents
1. Property Rights and the Economy
2. Property Rights Registration Issues in South
Africa
3. The Doing Business Indicators
4. Good Practice Examples Internationally
5. The Example of Russia
6. Some Questions or Challenges
Some Examples of Good Practice
See attached handout with comparisons:
• South Africa
• CF Botswana, Nigeria, Mauritius and Rwanda
• Denmark, Lithuania, Netherlands and UK
• New Zealand
• Russia
Contents
1. Property Rights and the Economy
2. Property Rights Registration Issues in South
Africa
3. The Doing Business Indicators
4. Good Practice Examples Internationally
5. The Example of Russia
6. Some Questions or Challenges
The Example of Russia (1)
• Break up of Soviet Union about the same time
as break up of Apartheid System.
• Completely different focus than before for
both – politically and in economic objectives.
• Need to be inclusive, issue new titles and
reform property registration systems.
• Major legal, institutional, educational and
practice changes needed.
The Example of Russia (2)
• Putin ‘required’ all land plots to be registered and a land tax to be implemented between 2000 and 2005 – for 43 million owners.
• Multi-functional centres established so that the public could get all services provided in one place – property tax payments, planning applications, registration, social security applications, banking and payment offices, etc.
• Service to citizens became a central pillar of government.
The Example of Russia (3)
• However, even in the “one-stop-shop”, the ‘customer’ was effectively a messenger, collecting certificates from one agency and handing it to another. To prevent this the government required that any certificate held by one agency must be automatically transferred internally to the other requiring it. The customer therefore only made an application in one place, and everything else was done internally.
• In 2009 institutions for registration, land mapping and surveying, building measurement and control and valuation were merged into one organization.
The Example of Russia (4)
Russia now No. 8 in DB, and has the largest and
busiest registration system in the World.
• Focus on automation – across all of Russia.
• Focus on decentralized services – one front
office in 3,500 districts, but processing done
centrally.
• Focus on improving DB rankings!
• And above all, focus on the customer.
The Result in Russia
• 156 million parcels and buildings registered
• 253 million titles issued by end of 2013
(includes apartments)
• Dealt with 28 million applications in 2015
• Annually deals with 27 million e-documents
• Dealt with 8 million inter-departmental
requests in 2015 through electronic means
https://rosreestr.ru/site/en/about/
Contents
1. Property Rights and the Economy
2. Property Rights Registration Issues in South
Africa
3. The Doing Business Indicators
4. Good Practice Examples Internationally
5. The Example of Russia
6. Some Questions or Challenges
Good Practice -Think of this from the Customer’s Viewpoint
Simple One stop shop. No unnecessary steps. Simple forms.
One visit to an office or to a professional person.
WEB services. Automate/ interlink the approvals and
certificates so that they are done automatically.
Cheap Keep taxes and fees low – especially for low value
properties. No unnecessary steps. Use of para-legal
and para-surveyor?
Accessible Good Publicity! Services provided locally – either
private or by local authority. Services provided out of
normal working hours. Mobile services. WEB
services.
Reliable Transparent services - Fees and service standards
displayed. Accurate and reliable information –
process and records. Track progress. Guarantee and
indemnity provision. Complete coverage - all land.
Fast Aim for one day service. Automation is key.
Questions for the Cities
1. How can you make the process of registration more inclusive? So that all citizens can benefit from services provided?
2. What actions can be taken to make the systems in use more ‘customer friendly’?
3. What data and automated systems should be put in place?
4. How can cities improve public awareness, and coordinate better with civil society and the private sector.
Some areas for consideration
1. Already proposed:a) Electronic issuance of rates clearance certificate or on-line payment
confirmation.
b) Improvements to the deeds registry – automation/ electronic registration.
c) Service standards, including time limits and possibly fast track procedures.
2. Other possibilities:a) One stop shop linked with greater automation.
b) More local access to services.
c) City land information system.
d) Reduce no. of certificates required.
e) Reduce fees and taxes – especially for low value properties.
f) The role of conveyancers.