Government land administrative programs in the EU accession countries generally consist of land registration, land appraisal and tax administration, land use planning, and in some cases consolidation programs.
A great deal of focus has been placed on registration in EU accession countries by donors. For this reason, in many if not most countries the registration system is in place and functioning reasonably well. There are several key registration issues that have been handled better by some countries than others. A discussion of these issues follow.
The Czech Republic has a relatively solid system of land registration, titling and cadastral registration. In 1992, a new cadastre law was adopted and the land cadastre and land registry were united into a single instrument.462 Some of the goals of the 1992-1993 cadastral reform were to facilitate land transactions, define boundaries, create the ability to use the registry as a tax tool and provide easy access of information to the public.463 Modernization of the cadastral system, including digitization of owner’s folios and maps, has also been undertaken in partnership with international development agencies under the rubric “The Conception of Digitization of the Cadastre,” a project being funded through 2006.
In Hungary in 1972 the land registration and cadastral system were changed into a single land registration system, which consists of titles and boundary descriptions. Since 1991, the system has been under the authority of a Department within the Ministry of Agriculture, and is administered through a national network of Land Offices.
By contrast, Estonia’s land administration system is bifurcated into a land (legal) register and a cadastral register. Land registration is based on the German legal system, and all real properties are to be registered with basic data on ownership and other rights in land, including mortgages.464 Cadastral registration has been significantly reformed by the Law on Land Cadastre.465 For each parcel a cadastral map, cadastral index, map of restrictions, map of land use, map of land quality, and land valuation are made.466 Land valuation is regulated by the National Land Board, but is actually conducted by licensed land valuers.467 All land valuation assessments are public.468 International support has been vital for the reorganization of the land administration system, including a PHARE loan project, as well as other international assistance from the FAO and World Bank.469
Slovenia also has a bifurcated system, which has been in place for several centuries. Both the Land Register and the Cadastre Register are in need of modernization in order to support the free functioning of land markets. Currently, the Land Register records the relationships between people, objects, and rights, while the completely separate Land Cadastre records physical boundaries and land usage and forms the basis for property descriptions and tax assessments.470
This bifurcated system is basically working, but has some inefficiencies and problems. For example, the Land Register is totally manual,471 problems exist with titling in areas still undergoing land reform,472 the cadastre component suffers from more severe accuracy problems than the Land Register, and there is inadequate sharing of information between the registers.473 In addition, land cadastre problems are exacerbated by the lack of institutional responsibility for land valuation. Valuation commissions were established in response to a specific government act, yet there is no authority for the update, maintenance or renewal of any valuation data.474
In Lithuania, the 1996 Law on the Real Property Register is basically adequate. Registration is carried out by the "State Land Cadastre and Register." However, there is one emerging problem in that there is now a separate Mortgage Registry, maintained in the courts by the Ministry of Justice. In addition, there is discussion as to whether the registration process will be further fragmented by turning over registration of other encumbrances or servitudes to the Ministry of Justice.475
In Bulgaria, the law On Cadastre and Property Registration was adopted in April 2000. The law created a new agency to implement the cadastral aspects of the law. The new Cadastral Agency took over the existing regional cadastral offices, which had few staff (only sixty-six), few and poor quality premises, and very little facilities or equipment.476 Registration of legal rights to land is handled by the entry judges under the Ministry of Justice. Transactions of rights to immovable property must be notarized.477 Although the notaries are private, the fee schedule is set by law.
In addition, decisions of the land commissions (equivalent of notarized title if accompanied by a map) are registered with the commissions, and the commissions also keeps a file of encumbrances on each parcel of land. In many regions, there is little communication between the entry judges and the land commissions.
Romania, due to its history of being divided between the Austro-Hungarian and Ottoman empires, has two different registration systems currently in use.478 These are the "land book" system and the "inscription-transcription" system. The 1996 law On Cadastre and Real Estate Publicity, the primary legal act dealing with land registration, contemplates use of the land book system throughout Romania, and outlines the procedure for switching over from the inscription-transcription system. Rights under the latter system, however, are protected under this law until each particular jurisdiction is ready to make the change. (There will be 170 land book offices, under each of the 170 local court offices.)
A potential problem is that the land book offices have little capacity to gather information; they rely on the local units of the National Office of Cadastre, Geodesy, and Cartography for all information upon which registration decisions are made.479 Unless these cadastre units are exceptionally responsive to requests from the land book offices, the land book offices may not be able to carry out registration activities in a timely manner. Unfortunately, these local cadastre units are required to accomplish a myriad of cadastre-related activities, and thus it is possible that their most important task, supplying information to protect legal rights, will not receive the needed attention and resources.
In Latvia, according to the existing laws all properties must be registered in the Cadastral Register, but it is not mandatory to register them in the juridical registry. Ownership rights to land occur upon the decision on privatization or restitution of ownership, but the owner has not right to perform transactions if the property is not registered in the Land Book (juridical registry).480 Whereas registration in the cadastre has been virtually complete for several years, only 45% of land has been registered in the Juridical Registry.481
Estonia’s land tax has played a detrimental role in completing cadastral registration. Presently, if an owner arranges for a survey and registers ownership, he must pay those fees and must also commence paying land tax. However, if the owner does not register ownership in the cadastre, the State pays the land tax, a significant incentive not to register land. The World Bank has recommended that all land owners (registered and non-registered) pay the tax, but municipalities have resisted. As a compromise, Estonia plans to establish a deadline by which cadastral registration must take place. After this deadline, unregistered land will be considered state land and can be sold or leased to people who want to make use of it.482 Estonia is one of only a few countries where real estate taxes are applied solely to land, and buildings and other improvements to land are not taxed.483
In Slovakia, the transfer tax on a transaction is from 4-20% of the price or valuation of the property, discouraging registration of land transactions.484
Hungary’s land registration system is fundamentally sound. However, it has faced challenges during computerization and digital modernization of the system and due to the vast increase in the number of new parcels through the Land Compensation program. The average lag time between possession of land and issuance of titles was about 18 months at one point.485
In Poland the registration system is fundamentally sound, but extremely slow.486 This has probably contributed to an estimated 30-40% of land in Poland being unregistered, though unregistered rights remain valid. At this point, registration is “sporadic”; when a transaction involving unregistered land begins, the notary must apply to open a registration volume on the plot. Even this sporadic registration is slow and subject to much complaint. Delays range from a few months in the countryside to as much as two years in Warsaw. A judge must make the entries, the land and mortgage registers are kept by approximately 300 different district courts, and the system is seriously under-funded and understaffed. Legal registration of previously unregistered land involves examination of notarial documents, documents held by the rights-claimant, and materials kept in the separate offices of the land and building register. Registration in Poland is not prohibitively expensive, but the fees do not go back into the registry system.
In Romania, the land book system is, in theory, supposed to provide conclusive evidence of ownership and other registered rights. However, the description of the land book in the law raises the possibility that the rights inscribed in the land book can be annulled in the future by court judgment. In addition, some rights, such as successions and rights obtained through court judgment, are enforceable even if not inscribed in the land book. These exceptions make it difficult for third parties to rely on the land book, since inscripted rights can be overturned, or non-inscripted rights may be enforceable.487
Restitution of agricultural land has created small land plots and spatially dispersed land in many countries. These countries have struggled with how to encourage land consolidation without over-interfering with the market. State involvement is often not welcomed because countries in transition are moving away from State involvement in agricultural land. At the same time, very small or dispersed land holdings can make it difficult to reach a level of livelihood seen in Western Europe. Below is a description of how several countries have dealt with their desire for land consolidation.
In the Czech Republic, the Land Consolidation Act determines administration of land consolidation and creation and function of Land Offices. The law determines in details the object, forms, participants and procedures of land consolidation. There are two forms of land consolidation described by the law (both voluntary depending on the consent of the landowners): simple land consolidation (to create compact land units in shorter time); and complex land consolidation. While simple consolidation involves marking boundaries of several original lots, complex land consolidation usually involves whole cadastral units and must respect the requirements of production and environmental and landscape formations. The costs of the land consolidation are paid by the State. 488
The Slovenian Agricultural Land Act (October 1996) regulates use, protection, sale and lease of land. The Act supports the goal of increasing farm size by granting preferences to tenants, neighbors and the Land Fund in farm sales.489
The Land Fund acts as a market trader and promotes land consolidation through sale and lease.490 The Land Fund, which is made up of state land not yet restituted, leases 22,000 hectares to small private farmers and 50 large enterprises. Where small units are held by the land fund, and the land ownership pattern is complex, the small units will stay in the hands of the State unless a buyer comes forward. Where the restitution process results in the fragmentation of a larger land unit, then the Land Fund will purchase the small piece from the new owner if the new owner desires. The Fund will then add the land to its own stock, thus preserving a larger continuous unit. The Land Fund also buys odd shaped parcels, parcels difficult to access, and will even buy land adjacent to an existing farm, at the request of the farmer, and then lease the land to him or her. However, at the present time, the amount of land sold to the Land Fund is very small.491
Furthermore, while restrictions on the maximum size of private landholdings were abolished in 1991, current agricultural land units over 5 hectares must be conveyed as a whole unit and cannot be subdivided.492 Some have argued that the existing land tax system does not support land sales, and that low land taxes have encouraged land ownership to the detriment of land sales.493 It may be questioned, however, whether land taxation is either an appropriate or an effective instrument to encourage land sales. Land taxes that would be at a high enough level to have an impact on land sales have rarely, if ever, been seen in global practice. It is possible that such taxes if actually levied, would cause widespread economic harm to farmers and rural communities, and might actually bring about a series of undesirable impacts, such as distress sales at low prices, sales to non-farmers who have the financial resources to hold the land for speculative purposes only, and loss of prime agricultural land to non-agricultural uses that might be more profitable but in many ways less desirable.
The World Bank has recommended that Slovenia: (1) use land taxation to encourage land consolidation; (2) restructure the state land agency to actively support land consolidation by buying, holding and reselling land to improve farm structure; (3) complete a land register as soon as possible; (4) support long term leases; (5) introduce a retirement scheme; and (6) support transfer of land from less competitive to prosperous farms.494 At least several of these points, however, (some of the possible applications of (1), (4), and (6)), might involve measures of market interference that could end by doing more harm than good.
The Hungarian and German Ministries of Agriculture have also initiated a cooperative project, the joint German-Hungarian Land Reorganization Consolidation Project (TAMA), to improve agricultural productivity by improving the accessibility, size and configuration of fields.495 The project will support legal regulations and technical aspects of land reorganization and consolidation. The project also features a land-exchange service for landowners.496 Hungary also suspends the transfer tax when voluntary consolidation occurs.497
In order to address some of the problems created by Hungary’s land reform process, legislation to hasten consolidation has been proposed for the last several years, but has not yet passed. These include:
Latvia, along with Slovakia and the Czech Republic have instituted a land improvement and reparcelling effort, backed by the EU, scheduled for 2002-2006.501 The EU has identified the following primary challenges: the high number of co-owner shares; the incomplete land register; and the physical inaccessibility of some plots.502 Eligible investments will include: the preparation of necessary documentation; preparation and implementation of land use projects (such as marking out the division plan, surveys and earthworks); and the building of access roads.503
In Romania, the farmers themselves have dealt with land fragmentation. The average plot size is two to three hectares, sometimes divided into 3 to 5 plots.504 Fifty percent of the land is owned by people outside of the agricultural sector.505 Many plots are not being cultivated at all.506 Litigation concerning parcel location and soil quality has arisen.507 After the difficulty of attempting to individually farm fragmented plots, it appears that a significant number of farmers are opting for some kind of larger association.508 The formation of family associations to some degree has helped overcome the fragmentation problem.509 However, these association agreements have, in effect, reintroduced some of the difficulties of cooperative ownership and have resulted in a weakened sense of security in ownership that has translated into restricted investments in the land.510 Leasing agreements have been suggested as an alternative to these association relations that would likely foster a stronger sense of security and thus more investment.511 The active but informal leasing market has resulted in some consolidation of farms with highly fragmented land ownership.512
Many of the EU accession countries have a policy of government involvement in conversion of agricultural land to non-agricultural use. Conversion often falls outside of the ordinary land use planning process, and requires extra steps and expenses.
Land use planning in Poland falls under the 1994 law On Spatial Development. Under the law, if the spatial development plan zones a particular plot as agricultural, and that use has been approved by the village-level administrative body (gmina), then the land must be rezoned before it may be put to a non-agricultural use.513 The change in zoning requires a many-step process that can take as much or little time as the local gmina desires.514 The law also provides that when the beneficiary of such a zoning change then sells the affected land, the gmina can impose a fee of up to 30% of the increase in the value of the land resulting from the change in zoning.515 Where a change in zoning decreases the value of land, the government must compensate the owner for the diminution.516
In Lithuania, certain legal issues arise when a landowner wants to change the use of his or her parcel from agriculture use to non-agricultural use. If a town-planning document designates land as available for non-agricultural purposes, then the conversion can be simply made. Otherwise, change in the town plan must be obtained under a rather complicated procedure. In addition, a special compensation must be paid based on a multiple of the difference in profitability between the land as used for agriculture, and the land as used for non-agricultural purposes (i.e., a number of years of expected profit for the change must be surrendered up-front). Such conversions of land are rare, especially since land usually can be found which is already properly designated.517
In Romania, the law On Land Resources requires holders of agricultural land to cultivate the land, to protect the land, and not to actively degrade the land. Moreover, to convert agricultural land to non-agricultural uses, the law requires that such conversion be approved by the Ministry of Agriculture and Food. Locally developed land use plans also play a role. In addition, the law imposes a heavy tax on land that is converted. The tax, ranges from two times to four times the sale price depending on soil quality.518
In the EU accession countries land policy is often not consistent and administration of land policy is frequently fragmented at the national and local level.
In Estonia, land reform has necessitated a major overhaul of the land administration system created during the Soviet period.519 While some elements of the land administration system have been privatized (land valuation and surveying), for the most part the system remains governmental. Several different government authorities are responsible for land administration, including the Ministries of Environment, Interior, and Justice. The most important government agency is the National Land Board (under the Ministry of Environment), which operates the land cadastre and the local cadastre offices.520 The National Land Board also organizes cartography and geodesic activities, as well as land management decisions and international support.521 However, local governments undertake activities such as land restitution and privatization are.522
In Slovenia, lack of a cohesive land policy infrastructure has thwarted land markets. Land administration is decentralized and all decisions are initially undertaken locally.523 Furthermore, there is no central body overseeing land policy;524 currently there are at least nine different institutional entities responsible for land policy and administration.525 Despite these shortcomings, the need for efficient land policy has been acknowledged and the technical infrastructure is in the process of being upgraded.526
Latvia also appears to have limited planning or coordination of land policy.527 Instead, many institutions are responsible for various aspects of reform without a centralized or coherent plan or agency to coordinate these activities.528
Private land market services are beginning to develop in the EU accession countries. Some real estate agencies exist, as well as surveyors, and land valuators. Often these services grow out of the urban land markets, and urban land makes up most of the business of private companies.
In Slovakia and Bulgaria valuation and financial services are still underdeveloped, and information about finance and markets is not effectively publicized or exchanged.529 Even in 2000 it was conceded that Slovakia has little information on the status or the development of agricultural land markets because of an absence of functional statistical research and information networks.530
In Bulgaria, although there is limited demand for purchasing agricultural land, there appears to be great interest in selling and exchanging land and buildings of all types. Anecdotally, real estate agents estimated that the ratio of would-be sellers to buyers is 90/10 for agricultural land. However, while there are many real estate agencies (40 in Plovdiv), there is virtually no information exchange between real estate agents in separate regions.531 In Slovenia as well, there is no mechanism to bring buyers, seller and financing tools together, so knowledge of saleable plots is held locally and not widely disseminated. This lack of information will hinder the exchange market as well as the purchase and sale market. 532