International Experience in

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



Africa





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.

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Africa





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

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Africa





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

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Africa





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.


• 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.


• 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.


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/

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Africa





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.

Documents

International Experience in