International Land Management Symposium 2010-05-10+11 Hannover Land rights and land valuation in Mongolia 2010-05-11 09.05.10 Seite Page 1 1
Some facts about Mongolia Land Size: 1,565 Mill. sqkm. (= 4,3 x Germany - 0,357Mill sqkm) landlocked, borders to China 4,677 km, to Russia 3,543 km Terrain: Altai mountains in west southwest, Khangai central and Khenti east; grassy steppe; vast semi desert and desert plains, Gobi Desert in south-central Natural coal, copper, molybdenum, tungsten, phosphates, resources: tin,nickel, zinc, fluorspar, gold, silver, iron Land use: arable land: 0.76% other: 99.24% (2005) 2010-05-11 09.05.10 Seite Page 2 2
Some facts about Mongolia people Population: Capital city: 2,950,000 (2009 est.) Ulaanbaatar 1,? Mill. Inhabitants Labor force by occupation: agriculture: 38%; industry: 31%; services: 29% Population below poverty line: 36% GDP: USD 1,856 Bill. per cap.: US-Dollar 730,- Administrative divisions: 21 provinces (Aimags) and 1 municipality, 2010-05-11 09.05.10 Seite Page 3 3
Some problems Migration from rural areas to the urban centers i.e. Ulaanbaatar already since the seventies but accelerated because of: Breakdown of communal services supply chains and economic circles in connection with End of USSR: cut-off from economic support, technical assistance and subsidies Continued extreme cold and long winters. Growing population Resulting in: Production of raw material only Initial high unemployment (i.e. in the cities) Individual economic activities concentrate on pasture problems: overgrazing, water supply Arable land partly unused, lack of investment in farming Lack of funds for local communities. 2010-05-11 09.05.10 Seite Page 4 4
Constitution of Mongolia (1992) concerning tenure rights to land 1. The land... shall belong exclusively to the people and be under the State protection. 2. The land, except those allocated to the citizen of Mongolia for private ownership, shall be the property of the State. 3. The State may allocate for private ownership plots of land, except pastures and areas under public utilization and special use, only to the citizens of Mongolia. 4. Citizens shall be prohibited to transfer the land in their ownership to foreign nationals and stateless persons by the way of selling, bartering, donating or pledging as well as transferring to others for exploitation without permission from competent State authorities. 5. The State shall have the right to hold responsible the land owners in connection with the manner that the land is used, to exchange or take it with compensation for the purpose of special public need, or confiscate the land if it is used in a manner adverse to the health of the population, the interests of environmental protection and national security. 6. The State may allow foreign nationals, legal persons and stateless persons to lease land for a specified period of time under conditions and procedures as provided for by law. 7. Citizens of Mongolia shall be guaranteed the privilege to enjoy the rights to healthy and safe environment and to be protected against environmental pollution and ecological imbalance. 8. It is a sacred duty for every citizen to protect nature and the environment 2010-05-11 09.05.10 Seite Page 5 5
Process of privatisation 3 Types of land rights Ownership Mongolian Citizens only Possession rights up to 60 years, extension possible, Mongolian Citizen, joint ventures use rights foreigners included, up to 5 years, extension possible Free Privatization of land for family needs (for mongolian citizens only) since 2003 it is possible for Mongolian citizens it, to own land (after the Period of privatisation of appartments,1993-2001) In Ulaanbataar up to 0,07 ha In Aimagcenter up to 0,35 ha In Sumcenter up to 0,5 ha 2010-05-11 09.05.10 Seite Page 6 6
2010-05-11 09.05.10 Seite Page 7 7
2010-05-11 09.05.10 Seite Page 8 8
2010-05-11 09.05.10 Seite Page 9 9
2010-05-11 09.05.10 Seite Page 10 10
Cropland in Mandal soum: overlay of existing data from 2005 and 2007 2010-05-11 09.05.10 Seite Page 11 11
Cropland in Mandal soum: land use 2010-05-11 09.05.10 Seite Page 12 12
Cropland in Mandal soum: soil quality assessment 2010-05-11 09.05.10 Seite Page 13 13
Cropland in Mandal soum: duration of possession rights 2010-05-11 09.05.10 Seite Page 14 14
Cropland in Mandal soum: use and possession rights 2010-05-11 09.05.10 Seite Page 15 15
Cropland in Mandal soum: use and possession rights 2010-05-11 09.05.10 Seite Page 16 16
Cropland in Mandal soum: status of land possessors 2010-05-11 09.05.10 Seite Page 17 17
GTZ Project Land Management- Fiscal Cadastre in Mongolia Implemented in Cooperation with the Administration of Land Affairs, Construction, Geodesy and Cartography (ALACGaC) financed by German Federal Ministry for Economic Cooperation and Development (BMZ) 11.05.10 Seite Page 18 18
The German contribution towards the establishment of a National Land Information System supports the creation of a market oriented, publicly disseminated, independent valuation of immovable properties. This includes the standardization, improvement and updating of existing real estate data, the data exchange with other institutions and the development of new applications. The collected data will be an integral part of the development of a mortgage system, it is also paramount for the function of a transparent real estate market, for an efficient land management by government authorities as well as for an impartial and equal raising of ownership taxes and land fees. 11.05.10 Seite Page 19 19
The project covers advisory services: for the implementation and maintenance of a nationwide land information system based on a consistent structure for land data to increase the use of land related data by the provision of new customer orientated services in the implementation of modern and transparent valuation methods for immovable properties for the efficient and user group oriented land management of state land in law examination and recommendations for amendments to the legal framework for the education and training of local experts and professionals and information for users and public 11.05.10 Seite Page 20 20
Pilot Regions Main Project Office SELENGE DARKHAN-UUL Pilot Office resp. Region ULIASTAI ULAANBAATAR Project budget: 3.500.000 EUR (1.phase: 1/2005 6/2008 2 mill. EUR) (2. phase:7/2008 6/2011 1,5 mill EUR) Overall duration: 01/2005 6/2011 The present Project activities which are focused on areas with different types of land use in the eastern part of the west region, (Zavkhan province) the northern part of the central region (Selenge and Darkhan-Uul) and two districts of Ulaanbaatar will be extended to other Aimags (provinces) in Mongolia during the second phase of the project. 11.05.10 Seite Page 21 21
GTZ-Project Land Management Land Administration in Mongolia 2 nd phase (7-2008 to 6-2011) 4 main activities Education and Training Use of the geodatabase Support improvement of legal framework Advisory services - institutional development 11.05.10 Seite Page 22 22
Valuation Database Parcel information (Size, identifier, boundaries, geometrical relations) Registry information (tenure rights, right holders, encumbrances, rights of lien) Available information (soil, use, zoning, building, -material, -size, -age, utilities) NLIS Valuation Database Spatial analysis Calculation of criteria Land fee + land tax collection Mass valuation Price collection and additional information Questionnaires Contracts Base value maps market reports, statistical information Queries Real estate market analysis 11.05.10 Seite Page 23 23
11.05.10 Seite Page 24 24
11.05.10 Seite Page 25 25
Real estate valuation needs: Information about purchase prices (Market observation) Essential for comparison method, for the development of statistical data about market development and for determination of base-prices for land - Difficulties: Price information is not reliable No systematic collection available A (cadastral) database for storing the relevant information and an organisation for data processing An independent board to control the data processing institution, to decide about relevant market information and to inform regularly about the market situation Changes in the existing legislation 11.05.10 Seite Page 26 26
Khashaa prices without buildings between 7,000 and 172,000 MNT/sqm (2009) 11.05.10 Seite Page 27 27
Khashaa prices with buildings between 7,000 and 133,000 MNT/sqm (2009) 11.05.10 Seite Page 28 28
Thiessen/Voronoi polygons 11.05.10 Seite Page 29 29
Extract of price contour map with the base values in thousand Tg / m 2 11.05.10 Seite Page 30 30
Building coeff. for Ger Areas in Ulaanbaatar 2009-12 11.05.10 Seite Page 31 31
Base values (Price conture map) for Ger Areas in Ulaanbaatar 11.05.10 Seite Page 32 32
Legal framework 2.1 Cadastral law Support working group Geodetic reference Delineation of administrative- block- and parcel boundaries Parcel identifier and attributes Datamodel Institutional requirements Updating procedures and quality control Private sector participation Conformity between cadastre and registry Draft of Guidelines 11.05.10 Seite Page 33 33
Legal framework 2.2 Valuation of real estate Support working group Definition of market value and valuation objects Definition of appropriate valuation methods Valuation purposes Independent Valuation institutions Data collection and data storage Market information Access to information, copyright Private sector support Draft of Recommendations 11.05.10 Seite Page 34 34
Legal framework 2.3 Acquiring private land for public purpose Support working groups: Compulsory purchase law Legal requirements for compulsory purchase against compensation State institutions to carry out compulsory purchase Value of compensation Legal procedures Land readjustment law Legal requirements for land readjustment Land readjustment board Land readjustment by size / Land readjustment by value Procedures Recommendations 11.05.10 Seite Page 35 35
Legal framework 2.4 Land Policy Support working groups: Land allocation Land use planning: public private Allocation of land to public institutions Allocation of land according to land use and tenure rights Condominium and land ownership Legal bodies for condominium cooperatives Delineation of condominium parcels Individual extensions to Condominiums Land fee, land tax and land transfer tax collection and its contribution Suggestions for changes in land tax and land fee Real estate transfer tax and its implication on price collection Beneficiaries of the collected fees and taxes Financing ALAGaC Draft of recommendations 11.05.10 Seite Page 36 36
3.1 Development and use of the Geodatabase Complete coverage of cadastre + basic information > Geodetic network, Coordinate system > Territorial and administrative boundaries > cadastral units (blocks, parcels, plots) > Parcel Identifier (numbering system, parcel address) > Parcel attributes (additional information i.e. geometrical, legal, value, meta data ) > Quality control 11.05.10 Seite Page 37 37
3.2 Development and use of the Geodatabase updating of cadastral information > definition of updating cases > reporting procedures for changes > Participation of citizens involved > procedures for data collection > Public Private Partnership (PPP) > Data model, Programming 11.05.10 Seite Page 38 38
3.3 Development and use of the Geodatabase Development of the Geo database (GDB) > Research and definition of user Requirements > development of Products - in house requirements (other production and controlling units) - Land Registry - Taxation department - Ministries and other administrations - private sector (i.e. banking, planning, building) > Data model, programming > distribution of cadastral products (offices, shops, Internet) > cost recovery, copy rights 11.05.10 Seite Page 39 39
3.4 Development and use of the Geodatabase Development of valuation application > collection and storage of value related information - Market price collection - building information - land quality information - land use planning information > statistical analysis > derivation of base value maps for real estate > development of computer aided mass appraisal > application for tax collection based on market value > application for land fee collection based on market value > applications for other users 11.05.10 Seite Page 40 40
Thank you for your attention 2010-05-11 09.05.10 Seite Page 41 41
Professional approach 6 Priorities : 1. Implementation of modern and transparent valuation methods for real estate in compliance with international standards 2. User orientated and efficient Land management of communal and state land 3. Piloting the development of a mortgage market 4. Advice for amendments to the legal framework for land management 5. Updating of the (multifunctional) cadastral database, which is used by different target groups; timely data exchange between institutions 6. Comprehensive and effective Information of main users, professionals and public, active demand of target groups for the projects training and capacity development programs; Qualification of target groups to become market participants 2010-05-11 09.05.10 Seite Page 42 42
Implementation of modern valuation methods Initial position: Valuation according to fixed parameters, regulated by state law Prices in transfer documents not reliable No systematic documentation and allocation of prices to transfer objects Project approach Information und agreement about standardized procedures with partner organization and professional bodies (valuer institutions, audit companies, banks, real estate agents, lectures of local universities) Recommendations for adjustment of existing legal framework Organization of market price collection Capacity building for real-estate valuers Base price documentation and mass appraisal + High interest from professionals Existing private market reports Dynamic market for apartments - Market price collection difficult Prices for land transfers limited market disturbance due to free of charge privatization of state land for housing Allocation of prices difficult due to missing cadastral database Spatial and land use planning insufficient 2010-05-11 09.05.10 Seite Page 43 43
Land management of communal and state land Initial position: Spatial planning (if existing) not connected to land use planning and land management Only selected coverage of cadastral objects (parcels) i.e. for registration Non systematic appropriation of assets Project approach Documentation of existing spatial planning and GIS presentation in pilot area Darkhan Proposals for a complete partition of settlement areas Proposals for the privatization of arable land Technical support to the Land Office Darkhan for compilation of the land management plan + Existing basic planning structure - Insufficient planning and communication culture in spatial planning Existing regulations for appropriation of assets diffuse No clear delineation of real estate Limited influence for local authorities Lack of enforcement 2010-05-11 09.05.10 Seite Page 44 44
Development of a mortgage market Initial position: Mortgage law framework under discussion, orientation towards US-mortgage market Present situation more demand- than investment orientated High administrative and risk costs cause high interest rates, including long term loans Project approach: Capacity development for bank personnel focusing on real estate valuation and use of cadastral data Cooperation for the collection of market prices for real estate (GIS against price information) Information about mortgage and covered bonds market in Germany in cooperation with GTZ-project for development of the banking sector + Business banks very interested Building-boom needs mortgage backed long term financing Investment capital potentially available - Construction and development mainly in the capital city Mortgage securitization not well known Trust in public ownership documentation limited 2010-05-11 09.05.10 Seite Page 45 45
Recommendations for the legal framework Initial situation: Free of charge distribution of land for housing, ongoing discussion overfree land distribution Existing laws for real estate valuation use static methods with fixed parameters for assessment Centralized administrative decisions Project approach Investigation of the existing land laws Initiation for amendments to the land laws focusing on a legal environment for a market oriented real estate valuation and the necessary infrastructure Support in drafting land related laws and regulations (i.e. cadastre, valuation) + Existing awareness for necessary changes in the legal framework Cooperation with other stakeholders has developed positively - Existing fragmentation in law making Extremely limited time frame for law drafting 2010-05-11 09.05.10 Seite Page 46 46
Updating of the (multi functional) cadastre Initial situation: Several specialized cadastral systems but no multi functionality Development of a National Land Information Systems has been delayed Isolated parcels in newly surveyed areas Project approach Set up of a basic cadastral database to connect the valuation data with the cadastral information (considering the planned NLIS structure) Quality check and improvement of the existing survey data Development of applications for a GIS supported collection of land tax and land fees Capacity development and raising of awareness for updating regulations, involvement of the private sector + Active participation of local ALAGaC branches Existing private survey-sector - Delay in NLIS development leads to Need for own GIS- (interim) solution Partly parallel development of GIS application between GTZ and ADB project 2010-05-11 09.05.10 Seite Page 47 47
Capacity development and Information Initial situation: Universities offer education for land managers with different and inhomogeneous curricula Limited number of real estate valuators with partly out dated and insufficient knowledge First private market reports for real estate in Mongolia Project approach Draft of a (70%) standardized curricula for land managers Basic and advanced training for lecturers and professionals (Summer School) Translation of technical literature and supply of teaching material in Mongolian language Future information about market situation using market reports and base price maps + Growing number of participants in the trainings Readiness for Cooperation has grown - Technical knowledge very inhomogeneous and partly outdated 2010-05-11 09.05.10 Seite Page 48 48
Land Information System Ownership Possession User Rights Legal User Rights 3 rd Party Rights Land valuation Building information Value of land and buildings based on: market observation International valuation standards Fiscal (Cadastre) Rights registration Parcel Information (Identification) Footprints of Buildings Legal boundaries Based on a common Coordinate System Survey + Mapping + Listing Creating Land objects H. Finkemeyer GFA Consulting Group 2009-03-26 Seite 49