PROPERTY REGISTRATION IN UZBEKISTAN July 2011 Investment Climate Advisory Services World Bank Group With funding from FIAS, the multi-donor investment climate advisory service
Contents SECTION 1. EXECUTIVE SUMMARY... 5 Background Information... 5 Challenges... 7 Recommendations... 8 Report Structure... 10 SECTION 2. CURRENT LAND AND REAL ESTATE REGISTRATION IN UZBEKISTAN... 11 Organizational Structure the Services... 11 Laws and Regulations... 13 Office Processes... 14 Cadastre File (Case)... 15 Spatial Cadastre Data... 17 Policy and Institutional Arrangements... 20 Procedures... 21 SECTION 3. USAGE OF THE INFORMATION TECHNOLOGIES... 24 City Tashkent Land Use and Real Estate Cadastre Service... 24 The Service Tashkent Oblast and Zamgotinsky Rayon... 25 Other regions... 26 Archives... 26 Unified Cadastre... 27 SECTION 4. REGISTRATION PROCESSES ANALYSIS... 28 Registration Process a Commissioned Construction or an Allotted Land Plot... 28 Registration Secondary Transactions... 31 Doing Business Report - Registration Analysis... 38 SECTION 5. BEST PRACTICE CASE STUDY - PUBLIC REGISTRY REFORMS IN GEORGIA... 42 Pre-reform status... 42 Property Registration Reform... 42 SECTION 6. RECOMMENDATIONS... 45 Policy and Institutional Arrangements... 45 Procedures... 46 Some Specific Comments... 46 APPENDIX 1. WORKFLOWS FOR LAND PARCEL SELECTION AND ALLOTMENT PROCESS... 51 Igor Popiv & David Egiashvili, World Bank Group Page 2 84
APPENDIX 2. ORGANIZATIONAL STRUCTURE OF GOSKOMZEMGEODEZCADASTRE DIVISIONS... 53 APPENDIX 3. STATE REGISTRATION OF RIGHTS FOR LAND PARCELS, BUILDINGS AND DEPARTMENTS AND TRANSACTIONS WITH THEM.. 54 APPENDIX 4. TYPES OF TRANSACTIONS... 57 APPENDIX 5. DOING BUSINESS: REGISTERING PROPERTY IN UZBEKISTAN... 67 APPENDIX 6. SCHEDULE OF MEETINGS... 74 List Tables Table 1. Transfer the Real Estate (Building/Construction)... 31 Table 2. State registration rights for land parcels, buildings and departments and transactions with them... 54 Table 3. Types transactions... 57 Table 4. Sample Standard Property Transfer... 67 Table 5. Schedule Meetings... 74 List Figures Figure 1: Map Uzbekistan... 6 Figure 2: Structure the Service organization... 11 Figure 3: Reception department... 12 Figure 4: Registration Books for real estate properties... 14 Figure 5: Registration Books for land plots... 15 Figure 6: A State Certificate for a Building... 16 Figure 7: Cadastre Materials and Cadastre Plan... 16 Figure 8: Cadastre Index and Land Use Maps... 18 Figure 9: Sample map in CorelDraw stware... 18 Figure 10: Base map in MapInfo Pressional stware... 19 Figure 11: Archives... 26 Figure 12: Registration allotted LP in rayon (town) service land-use and real estate cadastre... 29 Figure 13: First Registration a LP in rayon (town) service land-use and real estate cadastre... 30 Figure 14: Transfer the Real Estate (Building/Apartment) Stage I: Extract... 40 Figure 15: Transfer the Real Estate (Building/Apartment) Stage II: Notarization and Registration... 41 Figure 16: Selection land parcel (LP) for the construction design... 51 Figure 17: Allotment land parcel (LP) and field boundaries setting... 52 Figure 18: Organizational structure Goskomzemgeodezcadastre divisions... 53 Igor Popiv & David Egiashvili, World Bank Group Page 3 84
List Acronyms BTI CAD DB GIS GoU GPS HARN IFC ILS MoJ NSDI TACIS UZS WBG WGS Bureau Technical Inventory Computer Aided Drafting Doing Business Geographic Information System Government Uzbekistan Global Positioning System High Accuracy Reference Network International Finance Corporation International Land Systems Ministry Justice National Spatial Data Infrastructure Technical Assistance for the Commonwealth Independent States Uzbekistani Soms World Bank Group World Geodetic System Igor Popiv & David Egiashvili, World Bank Group Page 4 84
Section 1. Executive Summary The World Bank Group (WBG) is pursuing property registration reform as a component its broader investment climate reform efforts in Uzbekistan. Property registration was selected by the Government Uzbekistan (GoU) as one the priorities for reform among the areas business regulation measured by the WBG s Doing Business (DB) report. The Government Uzbekistan has requested specific support in the following Doing Business areas: construction permits and property registration. WBG s fact-finding, technical mission visited the Republic Uzbekistan from June 20-30, 2011 to prepare a report for the GoU to improve its property registration and transfer system with specific emphasis on the policy, legal and institutional reforms. The mission has met with central and local government authorities, the Chamber Commerce as well as private sector representatives (please see Appendix 66 for details meetings). The mission was able to visit Tashkent, Tashkent region and rayon registry fices that enabled the team to assess the property registration system in the country. The consultants reviewed the current legislation and regulations in the area cadastre, property registration and construction permits. Recently, the GoU made serious efforts in advancing the legal reform in the area construction permits which resulted in the adoption the Resolution the Cabinet Ministers #146 dated May 25, 2011 On measures to improve regulations land plots allocation for performing construction activities and other non-agricultural needs. The mission has carefully analyzed the Resolution and mapped the multistaged process that integrates various stakeholders. The report provides analysis the active legislation and regulations. The recent legislation sets a solid framework detailed regulations for the development inter-agency interactions and actual implementation the mapped information flows. The mission was not able to evaluate the practical implementation the Resolution and judge its efficiency due to short time to have the Resolution turned into real actions the concerned stakeholders. The consultants used international best practices to advice on recommendations for a transparent and equitable process to facilitate property administration in Uzbekistan. Background Information Uzbekistan is located in the middle Central Asia and borders Turkmenistan, Kazakhstan, Kirgizstan, Tajikistan and Afghanistan. The total area Uzbekistan is 447,400 km 2. The economy is based on agriculture (mostly cotton and wheat farming) and natural resource extraction. The population continues to be heavily rural and dependent on farming for its livelihood. Igor Popiv & David Egiashvili, World Bank Group Page 5 84
Figure 1: Map Uzbekistan According to the Doing Business 2011 report, in terms property registration Uzbekistan is ranked 135 out 183 countries. It is important to note that there is a separation between ownership land and buildings. Despite the fact that the country favors private ownership apartments, buildings and residential houses, private ownership land (both agricultural and non-agricultural) is nonexistent, even though legislation recognizes the terminology regarding private ownership land. Article 18 the Land Code allows for transferring land into private ownership for targeted uses; namely for commercial and food security purposes. Household land (including a residential house with a small plot agricultural land) which is considered to be in private ownership is actually a lifetime land use right which is inherited and can be mortgaged. Agricultural land can be leased, but the country prohibits subleasing. The nonexistence land ownership acts as disincentive for investors and impedes the involvement land into economic activity/development the land market. Consequently, the lack a land market decreases liquidity collateral that preconditions little interest from the banking sector. Goskomzemgeodezcadastre is a public institution subordinated to the Cabinet Ministers Uzbekistan responsible for ensuring development and implementation state policy on effective use land resources, regulating land issues, organizing land planning and monitoring, and maintaining and increasing land fertility. From the institutional standpoint, all land administration responsibilities are Igor Popiv & David Egiashvili, World Bank Group Page 6 84
under Goskomzemgeodezcadastre (further might be also referred as committee). However, under the committee there are four independent registries operating: land, residential buildings, non-residential buildings and mortgage registry. Goskomzemgeodezcadastre has 14 regional and 214 district level services which include cadastre, registration, surveys and land use monitoring. Goskomzemgeodezcadastre district services have responsibility for land management and land administration and are subordinated to two different Institutions Goskomzemgeodezcadastre and local government. There is clearly an overlap between land administration and land management responsibilities held by Goskomzemgeodezcadastre -- Land administration (cadastre and registration) functions are combined with land management (effective use land resources, land use monitoring, land reclamation/conservation) responsibilities. A properly functioning system requires a clear separation land administration and land management responsibilities. Challenges A number challenges for property registration have been identified through examining the available materials and conducting on-site interviews and analysis. The following overview the challenges is detailed in the report: Property registration as a proper legal process has not been clearly established and is covered by multiple codes (land and civil), Cabinet Ministers resolutions, institutional instructions and orders, many which are outdated and contradicting. The registration procedures, while essentially sound in their structure, in practice have too many manual and paper-based operations that decrease efficiency and are prone to errors. There is very little use information technology outside Tashkent and the Tashkent region. Furthermore, the technology used is not standardized, systematically supported and enhanced. The level qualified human resources is low and, with the lack uniform legislation and clear guidance for the procedures, presents significant problems especially in the rural areas. There is no single central body under Goskomzemgeodezcadastre that would be solely responsible for managing registration services, coordinating the interests the various stakeholders in the property registration, developing a strategy and implementing a plan for the future. The registration fees are ficially set and seem to cover only the minimum costs involved in the registration process. More costs are recovered via the property assessment services, which undoubtedly poses a significant barrier to formalization from the side the executing agencies. Igor Popiv & David Egiashvili, World Bank Group Page 7 84
However, note that costs can be quickly recovered where there is an active land market with reasonable registration fees. Fees for services provided are outdated and there is no specific, long-term plan for cost recovery and reinvestment in modern technologies. The self-financing structure the individual district services is not stimulating for the improvement the processes. Instead, this results in a survival strategy rather than a pragmatic and coordinated development. Current property owners and other stakeholders are most concerned with poor access to information. This is especially a problem for realtors who have restricted access to the registry and for banks that have trouble accessing the actual status pledged properties. Planning, land plot selection and construction permit procedures pose additional challenges that adversely affect the overall functioning the property registration system. Most the surveying is done by Goskomzemgeodezcadastre local fices and there is no real involvement private surveyors in the survey work. It is not clear to what degree the surveys are tied to the national geodetic coordinate system nor is the quality the produced cadastre plans evident; especially those that are conducted on paper maps. The main archives are all in hard copy with no adoption information technology to assist in their management and usage. Security workspaces and records needs upgrading. Existing registration facilities should be upgraded for customer convenience and comfort. An improved communications strategy to reach out to current and potential customers is needed, especially if any reform is to be undertaken. Recommendations Reorganizing the one-stop-shop operation to include registration and obtaining building and use permits will require a multi-phase approach with interventions in a number areas. These include streamlining legal norms and regulations, institutional and business process re-engineering, fee Igor Popiv & David Egiashvili, World Bank Group Page 8 84
rationalization, introduction standardized information technology, strengthening human resources, and improving physical facilities. Specifically, we recommend the following actions that are further developed in the body this report: Consolidate the Institutional and Financial Aspects Registration. International best practice suggests merging different registration and cadastral services into a unified organization with a consolidated account. The fee regime for the registration services should be reviewed and restructured. Consolidate the Legal Framework. Consolidate the legal framework for land/real estate registration by bringing together various acts, norms and regulations for different aspects the registration. Modernize Procedures by Greater Use Information Technologies. Updating and modernizing information technology will increase efficiency, reduce mistakes, eliminate opportunities for rent seeking, provide better access to the records, improve billing and fee collection, and allow full auditing registration operations. The benefits are time reduction, increased transparency, easier transaction traceability, lower transaction costs, ease searches, longevity documents, and access and sharing the information for all stakeholders. Revise Registration, Surveying and Mapping Procedures and Develop Registrar s Manual. In addition to increasing the use ICT, business process re-engineering can eliminate some the more bureaucratic and manual steps that are currently causing delays and accumulating possible errors. All procedures should be set out in a comprehensive Registrar s Manual. Allow Private Sector Involvement in Surveying. Greater reliance on the private sector could add to efficiencies and stimulate development the related services, especially in the creation spatial data and population the integrated national cadastre with different thematic layers. Government Mapping Agencies Should Focus on Standards, Quality and NSDI. With involvement the private sector into surveying activities, the governmental agencies will have a chance to focus on developing data standards, quality procedures and integration various data into NSDI (National Spatial Data Infrastructure). Having this systematic process NSDI will serve as the base to launch other related activities regional and territorial planning and facilitate local development. Digitize Archives. Previous records need to be digitized and organized in searchable databases in order to take full advantage available information. Improve Human Resources. Increase the number qualified staff and, most critically, define, develop and deliver the training and certification programs for registrars, administrators and engineers the integrated cadastre and registry. Igor Popiv & David Egiashvili, World Bank Group Page 9 84
Enhance Data Security. Building or outsourcing data processing centers should be considered in an effort to enhance security and protect sensitive documents. Increase Outreach. Targeted public awareness campaigns should be developed to better inform the masses about the benefits registration and future reforms. Report Structure This report consists the following sections and appendices: Section 1 Executive Summary Section 2 Current Land and Real Estate Registration in Uzbekistan Section 3 Usage the Information Technologies Section 4 Registration Processes Analysis Section 5 Error! Reference source not found. Section 6 Recommendations Appendix 1 Workflows for Land Parcel Selection and Allotment Process Appendix 2 Error! Not a valid bookmark self-reference. Appendix 3 State registration rights for land parcels, buildings and departments and transactions with them Appendix 4 Types Transactions Appendix 5 Doing Business: Registering Property in Uzbekistan Appendix 6 Schedule Meetings Igor Popiv & David Egiashvili, World Bank Group Page 10 84
Section 2. Uzbekistan Current Land and Real Estate Registration in Organizational Structure the Services According to the Resolution the Cabinet Ministers N483 dated October 19, 2004 -- Regulation for the State Committee on Land Resources, Geodesy, Cartography and State Cadastre -- Goskomzemgeodezcadastre absorbed the cadastre Bureau Technical Inventory (BTI) and integrated the responsibility for cadastre activities and for conducting the state registration the rights for all types properties buildings, constructions as well as land. The cadastre activities are conducted at the rayon level by self-financed organizations formed by Goskomzemgeodezcadastre -- the Land Use and Real Estate Services (further referred to as the services ). Overall, there are 412 services in the Republic Uzbekistan that conduct cadastre activities while performing property registration. The services are funded by regional administrations for land resources and state cadastre, which are part Goskomzemgeodezcadastre and receive budget financing (see the Goskomzemgeodezcadastre organizational chart). The head each rayon service is appointed by the regional land cadastre administration with the consent the rayon Khokim (the head the rayon municipality). That makes a double subordination which is not needed to conduct the state regulated cadastre and registration duties. The typical structure a service organization is presented in Figure 2 and consists the following departments: 1. Reception 2. Registration 3. Surveying 4. Inventory and Valuation 5. Archive 6. Admin and Accounting Service Organization Reception Registration Surveying Inventory and Valuation Archive Admin and Accounting Figure 2: Structure the Service organization Igor Popiv & David Egiashvili, World Bank Group Page 11 84
Under Resolution N483, the Services operate a single window and reception department. The front desk receives all application documents and delivers them to the back fice for processing. A typical client service area is shown in Figure 3. Figure 3: Reception department The registration department consists an authorized registrar and at least one assistant capable conducting the registrar functions in case the registrar s absence. The registrar or his ficial delegate reviews the applications and all supporting materials, registers the application in the applications register, communicates with the surveying or inventory departments to perform the technical inspection the property, performs registration the property, and prepares the registration certificate. The surveying department must be licensed to perform survey work and be familiar with modern surveying equipment to conduct fieldwork and produce cadastre plans. These services are provided according to the fees established in 2006 for land, buildings and construction inventory, topographic work, and valuation activity. The fees were recently reduced by half pursuant to the Presidential Resolution. The surveying department is primarily established at the level the Central Service Office the city Tashkent as well as at the Tashkent oblast Central Service Office. It consists up to 50 surveying engineers serving the needs all rayons. The inventory and valuation department is the largest as it conducts field inspections and collects the technical characteristics objects to define the value for taxation purposes 1. In the city Tashkent, each city rayon fice has at least 15 inventory engineers out a staff 20. 1 According to the Law Republic Uzbekistan on 19.08.1999 N 811-I About Valuation Activity the valuation has become a licensed activity to be performed by nongovernmental organizations but still carried out by the Services due to Tax authorities requests (see article 4-1: Establishing the the valuation organization,and also conducting the valuation activites by bodies the state authority and state control are prohibited if other is not defined by legislation - edition the Law introduced on 09.04.2009). Igor Popiv & David Egiashvili, World Bank Group Page 12 84
Archive department is operated by at least two persons who track the move and storage the cadastre files and other documents. The administrative and accounting staff consists a chief account manager and an assistant, a director and a deputy and some other supportive staff depending on the size and activity within the administered rayon. Laws and Regulations The registration and cadastre regulations are very detailed and have been evolving over a long period time. They address different aspects registration and cadastre processes. Presently, the relevant legal and regulatory framework includes the: Law the Republic Uzbekistan N666-I dated 28.01.1998 about State Land Cadastre; Resolution the Cabinet Ministers N543 dated 31.12.1998 for Conducting State Land Cadastre in Republic Uzbekistan; Resolution Cabinet Ministers N278 dated 02.06.1997 for Conducting State Cadastre Buildings and Constructions in Republic Uzbekistan; Instruction About Regulation State Registration Rights for Land Plots in Republic Uzbekistan (registered by Ministry Justice by N736 on 27.05.1999); Instruction About Regulation State Registration Buildings and Constructions (registered by Ministry Justice by N387 on 07.01.1998); and Temporary Instructions about Regulation State Registration Hypothec (registered by Ministry Justice by N1798 on 25.04.2008). In addition to these normative and regulatory documents, there are internal orders various organizations regulating specific aspects registration and the maintenance registration books. Since these regulations were adopted, the institutions mentioned in those documents have been reorganized. For example, Uzgeodeszadastre, State Land Committee, and BTI were merged into Goskomzemgeodezcadastre where the registration and cadastre activities are now performed by district level self-financed organizations formed by Goskomzemgeodezcadastre. There are no regulations on how to register various servitudes and easements and no detailed instructions for the registrars on what to check and verify for each specific transaction. The authority the registrar and his responsibilities remain vague and undefined. The existing laws and regulations are outdated and do not comply with the actual reality on the ground. This has already been addressed by the Ministry Justice (MoJ) in a notice to the Goskomzemgeodezcadastre. MoJ is tracking the state the documents that are registered in the MoJ legal documents register. There is an urgent need to review the current regulations for cadastre and registration in order to develop a uniform set regulating documents taking into account legal, institutional and technological aspects the current situation as well as the future vision for land administration in Uzbekistan. The GoU has already adopted a series rather general laws and resolutions concerning electronic documents, digital signatures and e-government. Nevertheless, the Igor Popiv & David Egiashvili, World Bank Group Page 13 84
usage modern computer technology still has not been reflected in the land administration legal and regulatory base. Office Processes Currently, the registration services are maintaining two main registers for real estate properties a cadastre book for building and construction for non-residential properties and a registry book building and construction records for residential properties with the following eight different supplementary registration books (according to Instruction N387): Registry building and construction under republican ownership; Registry building and construction under join (collective) ownership; Registry building and construction under municipal ownership; Registry building and construction under private ownership; Registry building and construction under ownership foreign legal and physical persons; Registry arrests and prohibitions; Registry building and construction rent; and Registry building and construction hypothec. These books are manually maintained by the Service staff (see Figure 4). There are also a number acts and conclusions that have to be produced upon completion property surveying (inventory). Figure 4: Registration Books for real estate properties In addition to these registry books, there are two more registries to track interactions with the applicants: Registry reception applications for registration rights on buildings and constructions and transactions with them; and Registry requests for information extracts. Igor Popiv & David Egiashvili, World Bank Group Page 14 84
Similar books are maintained by the Service staff for land plots. Due to the fact that land plots are not subject to ownership rights (with the exception special cases defined by law and related mainly to the land foreign and diplomatic entities), there are fewer books since the transactions with the land are less numerous comparing to the transactions with real estate properties and apartments. The main book for land is The State Register the Rights for Land Plots with five different supplementary registration books (according to Instruction N736) and one more for tracking the applications see Figure 5: Registry land plots under the right permanent possession; Registry land plots under the right permanent use; Registry land plots under the right lifelong inherited possession; Registry land plots under the right temporal use; Registry land plots under the rent right; and Registry reception applications for registration rights on land plots and transactions with them. Figure 5: Registration Books for land plots Maintaining the books is time consuming, extremely inefficient and prone to various manual errors. It seems to generate little value other than serving the current operational control needs. Cadastre File (Case) According to the Law on State Cadastres article 16, a Cadastre file consists the documents, materials and data cadastre survey, technical inventory and categorization, special inspections and inquiries, qualitative and cost valuation the cadastre object necessary for formation, recording and following state registration the rights for the cadastre object. This sets a cadastre file as a unique case for each Igor Popiv & David Egiashvili, World Bank Group Page 15 84
cadastre object that stores in paper form all legal and technical history the object. Creation new cadastre objects requires setting a new cadastre file so the number the cadastre files in the archive is ever growing. Due to the fact that the land belongs to the state, the cadastre files are maintained primarily for buildings and construction with inclusion the land parcel on which they are located (the land plot is under the right rent or lifelong possession or use). The cadastre files contain all the technical and legal documents that are produced for the property (land plot and the real estate objects), including state certificate for the plot under certain right agreements for use or lease the plot, Khokimyat decisions, certificate inheritance, court decisions, certificate acquiring the right at auction or contest, hypothec and other agreements, materials for land allocation, land cadastre and land plot plan, and plans buildings and construction prepared and endorsed by the cadastre service. A sample the cadastre file documents is presented in Figure 6 and Figure 7: Cadastre Materials and Cadastre Plan. Figure 6: A State Certificate for a Building Figure 7: Cadastre Materials and Cadastre Plan Igor Popiv & David Egiashvili, World Bank Group Page 16 84
Spatial Cadastre Data One the main principles established by the Law on State Cadastres is the use a common system spatial coordinates. Goskomzemgeodezcadastre is responsible for developing and maintaining a state cartographic-geodetic cadastre, which establishes the base maps and geodetic grid network for all the other surveying and spatial data production. The national coordinate system is SC-42 and the geodetic network in SC-42 is classified information. This imposes quite a serious restriction on the ability for different state organizations to produce spatial information. It also jeopardizes the livelihood private surveying companies to produce spatial data for the state cadastres because receiving classified grid coordinates requires a license issued by the Cabinet Ministers, and special conditions are established for the facilities and storage where those data are located. Within Goskomzemgeodezcadastre the base maps are prepared by the Uzdaverloikha enterprise. Due to the lack a uniform approach for modern technologies and only sporadic automation in rayon (town) fices, the base maps are produced in paper form 1:25000 and 1:10 000 for rural and 1:2000 and even 1:500 for urban areas and distributed to the registration and cadastre services (Figure 8: Cadastre Index and Land Use Maps). Most critical are cadastre index maps that serve as the base to define and assign unique cadastre numbers for every cadastre object. The delineation the cadastre zones and quarters is done at the local level, in many cases using the aforementioned paper maps. The degree accuracy demarcations is not verified, and to what degree field surveys the plots match the index maps cannot be determined. Therefore, the working cadastre maps where all plots are presented are serving the need referencing the objects on the index maps but cannot serve as a reliable source the exact position plots on the ground. However, with neighbors signing a consent on the boundaries the plot s cadastre plan, legally qualifies as an object s undisputed location according to so-called general boundaries principles. Despite this approach satisfying the need the registry, more efforts in aligning and integrating the various spatial data produced through digitization the paper maps or acquired by modern surveying equipment will be necessary. All the cadastre work for land and buildings and construction outside the cities and towns is performed by the Rayon Land Use and Real Estate Cadastre Services. The cadastre work within towns and cities is performed only by rayon representatives the design-exploring enterprise UzGASHKLITI GosArchitectStroy (State Committee Republic Uzbekistan for architecture and construction) 2. Upon completion the work in the settlement areas, those cadastre data produced by UzGASHKLITI should be shared with Goskomzemgeodezcadastre and its rayon land cadastre departments, however, this is not happening. Neither organization is sharing information. 2 Defined by article 67 the Cabinet Ministers Resolution N146 dated 25.05.2011 On measures to improve regulations land plots allocation for performing construction activities and other non-agricultural needs. Igor Popiv & David Egiashvili, World Bank Group Page 17 84
Figure 8: Cadastre Index and Land Use Maps Some Services receive a raster image the map and use it to obtain a printout on a large size plotter. A sample such a raster map received by the Tashkent region (oblast) Land Use and Real Estate Service is presented in Figure 9 (notice the map is displayed in CorelDraw graphics design stware). Figure 9: Sample map in CorelDraw stware Igor Popiv & David Egiashvili, World Bank Group Page 18 84
The staff the cadastre department the Service manually outlines the land plot on the paper cadastre index maps, and the registration department staff defines and assigns the unique cadastre number for every new land plot, building and construction 3. Using paper cadastre index maps (or even raster images) is inaccurate and cumbersome, leading to potential errors with misplacement and overlapping plots. Some Services (city Tashkent, Tashkent oblast) are using commercial GIS or internally developed applications to maintain the cadastre index maps and working cadastre maps. Figure 10 presents a screen with the MapInfo GIS stware used at the Tashkent oblast service to automate the production cadastre and topographic digital plans. The Service the city Tashkent has been using their own internally developed stware to maintain the cadastre digital data, which they say they are gradually migrating into ESRI ArcGIS stware. Figure 10: Base map in MapInfo Pressional stware However, these solutions are not compatible among themselves nor do they match any specified and accepted standards. This imposes difficulties building an integrated cadastre database. Having this limited and inconsistent use automation and different technologies used by various authorities only partially helps in certain stages cadastre production. These systems have not been designed for a comprehensive technological process for data production, quality control and integration at the central level. 3 Cadastre numbers are assigned according to the unified system coding the land plots, buildings and constructions, adopted by Cabinet Ministers Resolution on 21.01.1998 N35 On conducting inventory and valuation activities for buildings and constructions owned by physical persons under the right ownership. Igor Popiv & David Egiashvili, World Bank Group Page 19 84
Policy and Institutional Arrangements From the institutional standpoint, land administration responsibilities are under one institution the Land Committee (Goskomzemgeodezcadastre). However, there are four independent registries operating under the committee: land, residential buildings, non-residential buildings and mortgage registry. These multiple registries for different types property fail to meet the requirements the registration systems designed to meet the needs for market real estate transactions. Furthermore, multiple registries lead to system inefficiencies affecting the quality the services. There is no comprehensive registration law that regulates the land and property registration issues. According to the Instructions for Registration Buildings, registration non-residential buildings is conducted by the district and regional state cadastral fices, residential buildings by bureaus technical inventory, and mortgages by the Ministry Justice. Since 2005, all these responsibilities have been integrated into the Land Committee. Overall, the system is regarded as bureaucratic and cumbersome, and while the registration fee is low, the total cost a property transaction is high. According to the Doing Business report, Uzbekistan performs poorly on the number procedures and days for property registration; however, the cost burden is only half the regional average. Even though international best practice recognizes the importance a uniform, self-financed property registration system, Uzbekistan has favored a strange variation this model. Each rayon service fice (which is actually a division Goskomzemgeodezcadastre) is a self-financed entity. The existing practice does not promote a balanced development the system, yet the GoU is responsible for guaranteeing a consistent high quality services all over the country. A properly functioning system requires a clear separation land administration and land management responsibilities. In Uzbekistan, land administration (cadastre and registration) functions are combined with land management (effective use land resources, land use monitoring, land reclamation/conservation) responsibilities. This naturally creates a conflict interest from the public administration perspective. Such a mixing land management with the registration functions can create disincentives for registration, since the land institutions ten use the registration system as a policing mechanism rather than as a focus to support land transactions. There is always a fear that the registration system and data gathering will be used to police compliance with other administrative and regulatory provisions regarding real estate, such as building codes, building permits, taxation, and other requirements. This can give rise to a black, f-the-books market in real estate transactions. This is a common phenomenon worldwide, and where it occurs the registration system soon does not reflect the situation on the ground, and is thus ineffective for both monitoring and management. Roles also overlap with the functions assigned to the Ministry Agriculture. The government strictly controls farming in the country. Farmers are required by the municipality to grow specific crops. The Igor Popiv & David Egiashvili, World Bank Group Page 20 84
state purchases 100% cotton produced in the country and 50% wheat with prices fixed by the government. The state controls land use in Uzbekistan far more than in most other countries. This creates tension between the state registration system and the land monitoring and management system. Here again, the registration functions are in conflict with the management systems, and rather than being a tool to support market-based real estate transactions, the registration system becomes a policing tool. The fact that the head the district Cadastral and Registration Service is appointed with the agreement the local government bodies, makes these services dependent on and accountable to municipalities, compromising the independent functions the registration system. In general, land use monitoring is the responsibility the municipality and should not be linked with the transaction process. Moreover, the cost monitoring should not be borne by the customer. Another problem is that customers are required to submit a new land survey for every transaction, even where there is no change in the configuration the parcel. This redundancy and only adds time and expense to real estate transactions without adding any value and is vulnerable to corruption. Although the law recognizes the institute private land surveyors and the government licenses private surveyors engaged in surveying activities, this system is poorly developed and the state cadastral fices compete with the private sector in providing survey services. Consequently, the private surveyors are in a disadvantaged position vis-a-vis government institutions that provide surveying services. For example, there are no private land surveying companies in Tashkent that are involved in cadastral surveys. Such companies are primarily performing geodetic and topographic surveys for construction, road and infrastructure projects. Private land surveying companies have very little chance to develop and penetrate into the real estate market. Procedures While the registration services different entities have been integrated into the Land Committee (Goskomzemgeodezcadastre) since 2005, the registries still operate as independent services. A unified registry implies the existence one land book that registers real estate and all rights related to this property as well as property restrictions. As already discussed, the registration service Uzbekistan keeps separate land books for mortgage, municipality property, private buildings, leased buildings, jointly-owned buildings, property transferred for management, state buildings, and foreigner-owned property. These are essentially separate registries that violate the whole concept a unified registry. In countries where there is a unified registry, the status a land title and the existing encumbrances and their relative priorities can be easily determined by consulting the single registry. In countries where multiple books need to be consulted, the procedure is time consuming and subject to errors. Moreover, in Uzbekistan the various registries are not compatible since they have not been developed according to the pre-defined standards. This complicates the integration the data into a central database. Igor Popiv & David Egiashvili, World Bank Group Page 21 84
Inadequate differentiation roles and responsibilities among state institutions leads to ineffective and extremely bureaucratic procedures. For example, each transaction requires an inspection the property, submission an updated land survey, and cadastral documentation. Almost 90% registration time is spent on compiling cadastral documents. The cost cadastral works is determined only after the data processing. As a result, the applicant has to visit the cadastral fice once again to ascertain what must be paid for the cadastral services. Article 2 Chapter 1 the state provisional instructions for mortgage registration from 2008 requires the borrower and lender to notarize the mortgage agreement. This should not be a mandatory requirement. Stakeholders should be able to save time and additional costs by signing the agreement at the registration service. It should be underlined that although the law does not provide for this requirement, existing practice obliges the borrower to notarize the lending agreement. Owners/users obligations towards state or other institutions should not be linked with the registration system. Notarization the contract requires submission all paid utility bills. Utility payments should not be policed by the state in the course a property transaction. Firstly, it is unfair and belongs to a completely different field management; secondly, it reduces an owner s obligations to pay utility bills if he/she is not interested in a property transaction. Such requirements negatively affect property registration and complicate and delay the process. According to the law, an ownership right arises after registering the transaction at the registry service within one month the actual transaction the property. However, because the aforementioned deficiencies in the registration system, most persons engaged in real estate transactions ignore the registration requirement. Consequently, their rights to the property are not recognized or secured by the state, cannot be identified by others interested in a transaction regarding a piece property, and a black market may emerge. In addition, failure to register may lead to multiple sales the same property by the recorded owner. Legally, the state requires registration a property after the acceptance the building into operation by state authorities. This creates an additional constraint for the already poorly developed real estate market. The right to the real estate is already existent when it formally emerges, i.e. when the state has approved the construction design and issued construction permission to the applicant/customer. From this moment, the building under construction or its part, is already involved in real estate market and is available for sale. About 40% apartments are sold before the construction is finished and the building is put into operation. This is an accepted practice in the region. In fact, people prefer to buy buildings under construction as their price is much lower. This mainly refers to multi-story buildings and require registration even before they are approved for operation. Otherwise, the rights a buyer are only secured with a purchase agreement that does not guarantee the ownership right and the property can easily be sold several times to other buyers leading to disputes and potential loss property. Igor Popiv & David Egiashvili, World Bank Group Page 22 84
Demand for registration and cadastre information is huge. However, there is no clear procedure for obtaining such information. If the registration system was functioning properly, it could be a significant source income for the Service as many state organizations (e.g. courts, tax agency, Ministry Statistics, others) request information from the cadastre and registration service and currently receive this information free charge. In jurisdictions with a well-functioning land and real estate market, fees collected by the registry for the provision information provide sufficient revenues for the organization to be self-sustaining, and ten generate additional revenue to contribute to the general budget the government. At the central level, the task unifying the cadastre is split between two organizations the National Center Geodesy and Cartography and the Uzgiprozem" Institute. The National Center is developing the cadastre database for central buildings and construction, while the "Uzgiprozem" Institute is developing a central cadastre database for land. This contradicts the principle unification and these two cadastres should be consolidated. The success any effort to create an effective registration system to support transactions in land and other real estate will be largely based on the public s willingness to participate in the process. International experience illustrates that citizens resist providing information to data collectors because they fear that the information might be used in detrimental ways. Changing laws and issuing new decrees will not be enough to overcome this reluctance. There will have to be a focused and sophisticated information and outreach campaign that educates people regarding the benefits registration and instills confidence in the process. In addition, registration services employees will need to be trained on land and registration laws, the administrative structure for registration and land management, obligations and responsibilities the different organizations, the purposes registration to support market transactions as well as to improve land management and administration, the detailed procedures to be followed in the daily operations the registration service, and the technology deployed to implement the system. Igor Popiv & David Egiashvili, World Bank Group Page 23 84
Section 3. Usage the Information Technologies City Tashkent Land Use and Real Estate Cadastre Service As has already been noted, the registration process performed by the registration departments the Services is fully paper-based with the registration books manually completed. However, market pressure and the need to quickly respond to requests for information by the public as well as other agencies (courts, tax authorities, statistics, etc.) have forced some the self-financed services to invest in modern technologies. Visiting the city Tashkent Land Use and Real Estate Cadastre Service, we found that the organization has established a rather modern infrastructure: It has a central fice and 11 branches in each the city rayons; Each rayon has online access to the central database the Service; Every branch has a client stware application for a central Microst SQL Server enabling registration, inventory and valuation data entry into a central common database for every transaction concerning a residential property; The central database contains references to the owners and their rights back to 1992 when privatization the properties (apartments and buildings) and their registration first started; There is established communication with the city tax authority enabling a regular remote electronic exchange updated records over the period (for example new owners, etc.); The department geodesy is located in the central fice and builds cadastre plans and maps in 1:500 scale (use AutoCad, MapInfo and ArcGIS); There is a graphics stware developed internally by the Service IT specialists that integrates working cadastre layers and some auxiliary layers (streets, historical objects, etc.) and that serves the purpose quality control for the location the registered parcels; The inventory non-residential properties is maintained within 1C Enterprise commercial, f-theshelf stware; All stware development and implementation was funded by the Service generated revenue and there was no Goskomzemgeodezcadastre involvement in the conceptual design or implementation these IT applications. This IT infrastructure allows the Service to process 300-350 non-residential property transactions per day (half those are secondary transactions), 500-600 residential property transactions per day (from Igor Popiv & David Egiashvili, World Bank Group Page 24 84
citizens) and conduct inventory and valuation 40-50 objects per week. The data for the past two years presents a growing trend on the real estate market in 2010, there were 213,000 transactions (140,000 applications related to residential properties and 73,000 to non-residential.) In 2009, the overall number was 180,000. The interaction with notaries, courts and other agencies is still in paper form, but the extracts are generated out the central database. The Service Tashkent Oblast and Zamgotinsky Rayon A similar situation with IT modernization was observed at the Service the Tashkent oblast and the Service the Zamgotinsky rayon. In 14 rayons and 4 towns the Tashkent oblast, there are about 500,000 residential and 400,000 non-residential objects, which 60% are registered and up to 250,000 are recorded in the ILS UzLR database. Goskomzemgeodezcadastre took the lead and initiated the computerization through a European Technical Assistance for the Commonwealth Independent States (TACIS) donor program with its last phase finished in 2007. Upon finishing the donor program, commercial stware ILS UzLR 2.2 was customized for registration processes automation. That enabled Goskomzemgeodezcadastre to build a unified registry all types properties (land, residential and nonresidential) and all rights and restrictions related to the property. The UzLR central database is installed at the oblast service fice with 14 oblast rayon services fices connected to that central database through the UzLR client application. The stware controls uniqueness the cadastre numbers and generates various reports and extracts. It also supports printing the registration certificates. However, the registration books are filled in and maintained manually and continue to serve as the only legal source the registration records. The UzLR system stores references each property in manual book records. Due to the shortage the generated revenue, the Services have not been able to upgrade UzLR since 2007. This stware upgrade effort requires state assistance as well to collect specific inventory data and valuation the properties. Some statistics provided for the Zamgotinsky rayon (one 14) illustrates the level revenue generated by a rayon fice. On average per month, the rayon service performs 300-350 registrations and up to 200-250 extracts. Monthly total revenue the rayon service registration department is about 4 Mil. UZS, generated through registration and extract fees. Considering the staffing situation (one registrar and two registrar s assistants, two reception staff, two archive staff and a few administrative staff), this revenue distributed equals about 500 000 UZS per employee (about $300 according to the ficial exchange rate) and serves only to cover the labor and operational costs with no reserve for any modernization. The oblast central fice is in slightly better shape as it is able to generate higher revenue through its topographic department with a license requirement for mapping production and all the modern surveying equipment to conduct fieldwork and produce cadastre plans for all oblasts. Igor Popiv & David Egiashvili, World Bank Group Page 25 84
Other regions The TACIS program has provided the same UzLR stware to the Samarkand oblast and Khoresm. We understand that Samarkand continues to use the stware. It also appears that some stware has been developed locally at the Karakalpakstan autonomous republic. The National Center Geodesy and Cartography is using UzLR to integrate all real estate registration records into one central database. However, it faces numerous problems concerning the lack access to the data -- even digitized data for the city Tashkent are not compliant and need to be converted before being loaded into the integrated UzLR storage. Archives In city Tashkent service, there are about 600,000 registered residential properties (including houses and apartments). Each these objects has its own cadastre file kept in the archives the rayon fices. The cadastre files for non-residential properties are stored in the archive the central fice. These archives are already quite full and given the overall growth trend, will need to be expanded. A similar situation was observed in the rayon services (see Figure 11). Along with the fact that some documents are unique and in some cases can be lost (for example fire or earthquake), it is evident that introduction a computerized document management system is required to provide easier access to the records and their backup to digital format. Figure 11: Archives At present, each file stored in the archive is indexed in a separate archive application (we have seen it in Excel) as well as in the manual archive registry which references the key file attributes (such as address the property) to the location at the archive shelf (line, row). Igor Popiv & David Egiashvili, World Bank Group Page 26 84
Archive files are used daily to check existing files and populate the files with new documents, but there is no backup technology like micrilming or scanning 4. The city Tashkent service has been contemplating the scanning archives but considers that a major capital investment for required equipment and labor. Also, such a project implies implementation a document scanning IT solution that should follow international best practices. Oblast services, in fact, have the scanning and indexing stware available as part the UzLR functionality, but they have neither the resources nor the equipment to begin such efforts. The ongoing need to access archived records to extract information will continue to present a significant roadblock to increasing the efficiency the registration processes. Unified Cadastre The services are also responsible for surveying land plots as well as maintaining an inventory buildings, apartments and construction. These functions are regulated by separate instructions one for conducting the State Land Cadastre, and one for the state cadastre the buildings and construction. Those activities are done by different groups specialists in the Services; the surveying requires special geodetic equipment and license while inventory is performed by former BTI engineers. There is no established regular flow information from rayons/towns to the central cadastre databank maintained at the Goskomzemgeodezcadastre central level. As noted earlier, the task building an integrated cadastre is split between two Goskomzemgeodezcadastre subordinate organizations the National Center Geodesy and Cartography and Uzdaverloikha (former Giprozem). Both organizations are part different central branches (see the Committee organization chart in Figure 18: Organizational structure Goskomzemgeodezcadastre divisions) and there is no coordination between the organizations in conceptual designs and data models. Having the central databases developed and maintained by different organizations without coordination introduces not only duplication the efforts but prevents detection possible inconsistencies and errors by cross-referencing the information. One such immediate verification would be to check the right holder(s) the land plot and the building on the plot. More rigorous checks might be performed when cadastre plans the plots and outlines buildings and construction are available in digital form and referenced in the same state coordinate system (CK- 42). There is an urgent need to design a unified cadastre, which would integrate spatial data for the land plots, buildings and construction as well as present their actual legal status established through registration. The unified cadastre would also serve as the base layer for other types land cadastre information land use and land quality (bonitets) mapping and control, land valuation, protective zones, irrigation, etc. 4 There is a Law Republic Uzbekistan About Archival Business (N 252 15.06. 2010) which defines insurance copy the archive document to which scanning the original document is related. Igor Popiv & David Egiashvili, World Bank Group Page 27 84
Section 4. Registration Processes Analysis According to Article 13 the Law on State Cadastres, state registration the rights for the cadastre objects is obligatory for all owners and beneficiaries the other rights for the cadastre objects. A classification rights and restrictions that have to be registered are presented in the Appendix 4 - Types Transactions. The law does not stipulate a penalty for not registering objects but provides security for the properties with the registered rights. Registration is required if an owner or a beneficiary the rights wishes to transfer or pledge the property, or to fix his/her rights in a modified property after receiving a permit for its physical extension or reconstruction. As a result, in urban areas, the majority real estate properties have been recorded in the registries. However, according to an unficial evaluation, there are about 1 million illegal residential buildings and constructions (meaning no permits received and no registration conducted) in Uzbekistan. Those are located mainly in so-called makhallya 5 areas cities and in rural areas. Registration Process a Commissioned Construction or an Allotted Land Plot The registration process is rather straightforward and consists a series the following macro steps: 1. Review the application and its supporting materials; 2. Register the application in the applications register; 3. If needed, review the cadastre plan for the property to define and assign a cadastre number; 4. Communicate cadastre number to the inventory/surveying department for including into the operational cadastre map; 5. Finalize the registration the property by filling out the registration books; and 6. Prepare the registration certificate (two copies). This process is mapped out in Figure 12 and involves all departments the Service. 5 Makhallya are densely populated settlements based on artisan or national criterion and closely ruled according to the internal customs (at the beginning XX century in Tashkent there were up to 200 makhallya). Igor Popiv & David Egiashvili, World Bank Group Page 28 84
Registration allotted LP in rayon (town) service land-utilization and fixed property cadastre Applicant (Legal or Private Person) Department Reception and Delivery Department Real Estate Cadastre Registration Department Archive Department Land Use and Real Estate Cadastre Service (Self financed organization at rayon/town level) Application for registration right LP usage Check-out application and list the supplementary materials. Record into Registry Applications Validate technical documentation and the need to do field inspection Check-out content the legal documents on LP allotment Supplement to application materials: - Kokimyat Decision for allotment; - Acts Endorsement and field boundaries setting; -Payment the registration due fee Enter assigned cadastre number in working cadastre plan Define and assign cadastre number Record into State Register Rights for Land Plots Layout boundaries the LP at the working cadastre plan Enter records into relevant registration books Formation the cadastre file (dossier) 2 copies Registration Certificate Printing Receiving registration certificate and 2 nd copy the cadastre file Deliver materials for the Applicant Submit data to department for land resources and state cadastre rayon (town) Formation the registration part the cadastre file (dossier) 2 copies Record indexes into archive registry book Storing cadastre file in Archive Term registration up to 10 days (For legal persons 3 days) Figure 12: Registration allotted LP in rayon (town) service land-use and real estate cadastre The key assumption for this process is that it comes right after the lengthy process the land plot allotment or the acceptance the constructed building by a special Khokimyat commission. That means Igor Popiv & David Egiashvili, World Bank Group Page 29 84
the object cadastre documentation has been recently prepared by a licensed surveyor and reflects the actual object state, so there is no reason to spend any time on the object on-site inspection. In such a case, the registration takes 10 days for a physical person and up to 3 days for a legal entity. For the properties that do not have a cadastre plan and technical documentation, the overall process takes at least 40 days. The time is required for a licensed surveyor the Service to do the fieldwork, set/survey actual boundaries and obtain the property neighbors consent on setting the boundaries. This more general process, which includes property demarcation and preparation the cadastre plan and technical materials, is presented in Figure 13: First Registration a LP in rayon (town) service land-use and real estate cadastre 1 st Registration a LP in rayon (town) service land-utilization and real estate cadastre Khokimyat rayon (town) (Authority territory) Applicant (Legal or Private Person) Commercial Bank Department Reception and Delivery Department Real Estate Cadastre Registration Department Archive Department Land Use and Real Estate Cadastre Service (Self financed organization at rayon/town level) Decision for LP allotment stating the purpose the usage Application for Cadastre File formation and setting boundaries in the field Check-out application and the supplementary materials. Record into Registry Applications Validate technical documentation define the payment for the field work service Check-out content the legal documents on LP allotment Payment thru the bank for the field work services Bank receives payment and issue receipt Define the date for field inspection Define and assign cadastre number Delivery the receipt to the fice Check the payment and notify Applicant about the date the field visit Visit the field and survey the Land Plot and setting the boundaries The applicant will have to have neighbors ready at the date the cadastre engineer visit Payment thru the bank for the registration the LP Filing application for LP registration and deliver with the receipt to the fice Receiving registration certificate and 2 nd copy the cadastre file Bank receives payment and issue receipt Check the application and the payment Deliver materials for the Applicant Prepare the cadastre plan Visit field and have the boundaries to be signed on with every neighbor Formation the cadastre file (dossier) 2 copies Enter assigned cadastre number in working cadastre plan Layout boundaries the LP at the working cadastre plan Record into State Register Rights for Land Plots Enter records into relevant registration books Registration Certificate Printing Adding registration documents to the cadastre file - 2 copies Record indexes into archive registry book Storing cadastre file in Archive Figure 13: First Registration a LP in rayon (town) service land-use and real estate cadastre Igor Popiv & David Egiashvili, World Bank Group Page 30 84
Registration Secondary Transactions The registration process is more complicated for secondary transactions in cases when the object might have been modified since its previous registration. In fact, any reconstruction or change to the property s physical characteristics should legally be done upon receiving the permit and updating the cadastre plan. Considering very few owners apply for registration when the object changes, the secondary transactions become more complicated than the straightforward process reviewed above. In general, the process the secondary transaction is divided into three stages. The first stage is to receive an extract for the property showing its current title status and verify the object s actual state as presented by the registered records and cadastre plan stored in the Service cadastre file. The second stage is to legalize the transfer agreement between the Grantor and Grantee. The final stage is to apply for registration the new legal status (new rights holder/beneficiary or/and new encumbrance) the property. The details the stages are described below in Table 1. A diagram the workflow steps the first stage mapped in Figure 14 and the second and final stages are presented in Figure 15. Table 1. Transfer the Real Estate (Building/Construction) No. Procedure Agency Time to Complete Stage I Extract 1 Payment a fee at a commercial bank for obtaining an extract from the State Registry. The service fee is paid to the settlement account the cadastral services through a bank. The seller pays the fee for the services before applying at the Cadastral Service fice. 2 The seller applies for the extract concerning the real property at the Service fice the district. The seller submits the application and the bank receipt confirming the payment the service fee (obtained in Procedure (1) through the single window reception department the district service. A commercial bank (in the City Tashkent it is located in the same building floor as the Service) The Service fice 1 day Same day Igor Popiv & David Egiashvili, World Bank Group Page 31 84
No. Procedure Agency Time to Complete 3 Review the extract application and the requested property status and perform an inspection the property to determine its actual state and compliance with the cadastre file. Prepare the extract. As presented in the diagram, the application comes through the reception and is recorded into the registry the requests for extracts. It is then forwarded to the registration department for a preliminary examination. The examination has to check that the requested property is not in the registry suspensions and prohibitions. If it is, the extract is not provided and the applicant is only notified if any transactions with the property are suspended. To avoid fraudulent actions (i.e. trying to conclude and notarize several transfer contracts with the same property) it is also checked if there were any other extracts provided in the last 30 days (i.e. the term the validity the extract). If so, then the extract is not provided. Upon completion these checks, the request goes to the Service inventory staff to visit the property and confirm its current state and compliance with the cadastre records stored in the archive. In case any major modifications are identified either in the building construction or land plot area, the extract will not be provided. Instead, a notice is prepared for the applicant informing them to apply for the legalization the modifications. That may involve applying at the Khokimyat one-stop-shop to receive a permit for the modifications (see the Land Selection and Permitting process workflow). After receiving all legal decisions, the cadastre plan is updated and the modifications are registered (the process is presented as Land Allocation workflow). Only after the cadastre file records are in full compliance with the actual state the property, may the applicant (Grantor) apply for the extract to start the transfer the property to the Grantee. The Service fice 3 days for legal entities; For physical persons: 10 days for apartment; 30 days for building Once the actual state the property is compliant with the Igor Popiv & David Egiashvili, World Bank Group Page 32 84
No. Procedure Agency cadastre documentation, the Service prepares the extract and provides it to the applicant. The Service records the issuance the extract in the registry issued extracts. The extract includes the details about the property holder s name, type person (legal or physical), type property, address and location, type right, main technical parameters the property and land plot, registered rights and restrictions and the references to the State Registry records. The extract is effective for 1 month. Time to Complete Stage II Notarization the Transfer 4 Collecting all debt clearance statements from the municipal service agencies If the transfer is between two physical persons and related to a residential property, the Grantor must clear the property all debts for the communal and utilities services such as electricity, water, heating, telephone, building service, passport registry on other family members living at the property, gas lines, sewage and some other. Some services are using the provision such clearance statements as means to enforce the maintenance the meters inside the apartment or building (such as water supply). For the family members registered for the same property (there is a so-called institution the citizens household registration by address living performed by a district passport fice) the written consent for the transfer will have to be received. We were told there are two ways for the Grantor to deal with this situation one is ficial and another is to involve an agent (realtor). The ficial procedure to request the debt clearance statements takes at least 3-4 days per each agency statement. Obtaining some statements requires presenting other agencies statements. The entire process may take up to 30 days. The other option, through a realtor, costs more for the Municipal and local service agencies, tax authority From 7 to 30+ days Igor Popiv & David Egiashvili, World Bank Group Page 33 84
No. Procedure Agency agreed on service and takes about 7 days. Time to Complete For a legal entity, the entire process is simplified because the property recorded in the company books and the debt status is checked by an audit. 5 Payment state fees and notarization costs at a commercial bank The cost notarization is paid to the state budget as only state notaries operate in Uzbekistan. Note that the current minimum monthly wage (MMW) is UZS 49,735 and most the state fees are defined as a percentage the current MMW. The fee for notarization the real estate property transfer agreements depends on the building/construction area (2% the MMW per sq.m the property) and about 72-80% goes to the notaries, 10-15% to the Justice Department and the remaining amount is a stamp duty (the exact percentage depends on the type the transaction and persons involved legal or physical). 6 Notarization the transfer agreement between the Grantor and Grantee The sale agreement is notarized by a state notary. To notarize the sale agreement, the following is required: - Present the original Grantor certificate registration as well as the valid Extract the State Registry; - The transfer contract; - The acceptance act which certifies the completion the financial arrangement between the Grantor and Grantee; - The company establishment documents and passports; - The debt clearance statement the prescribed list the municipal and local agencies (9 in Tashkent); Commercial bank State notary 1 day 1-3 days Igor Popiv & David Egiashvili, World Bank Group Page 34 84
No. Procedure Agency - The consent the persons registered at the address the transferred property. Time to Complete There is no legal requirement for the contract a transfer a building and land plot to be prepared by a lawyer. The parties may prepare the contract themselves or use a model contract for a specific type transfer. However, under the Uzbek legislation, all economic contracts with the cost exceeding 200 minimum monthly wages shall be concluded only after the issuance a lawyer's legal opinion on the contract. The legal opinion shall be made either by an in-house lawyer or by an advocate. The Grantor and the Grantee sign and seal the transfer contract and the acceptance act. There is no standard or specific form established for the acceptance act. According to the Civil Code, the parties shall sign an acceptance act or any other document on the transfer real property from the Grantor and the Grantee. The companies may use a lawyer to prepare the acceptance act that might charge between UZS 10,000 and 30,000. At the same time, the notary will notarize the copies company establishment documents (in the case a limited liability company, these would be charter and company establishment agreement) the Grantor and the Grantee. The originals the company establishment documents shall be presented to the notary. The notary makes copies the original documents and notarizes them. Another specific duty the state notary is to verify the absence debts on the property by checking all the debt clearance statement received by the Grantor in Procedure 4. The notary has to verify that all the related to the Seller persons (family members) have endorsed in writing the property transfer. At the completion this procedure, the Grantee receives the cadastre file from the Grantor and all the notarized documents to apply for the property registration in the name the Grantee. Igor Popiv & David Egiashvili, World Bank Group Page 35 84
No. Procedure Agency Time to Complete Stage III Registration the Transfer 7 The Grantee pays the registration fee at a commercial bank Commercial Bank The registration fee (amounting to half the Minimum Monthly Wage, i.e. = UZS 24,867) shall be paid by the Grantee to the account the fice for the registration transfer the property rights in the real estate. The payment shall be made prior to the application for registration. The Grantee will need to provide the registration fice with the payment receipt. 8 Grantee applies for registration at the Registration Office The Service fice The Grantee shall apply to the District (City) Office The Cadastre Service (in this case, it will be the Service Land- Utilization and Real-Estate Cadastre the city Tashkent) for state registration the transfer title. He/she should produce the original sale agreement as well as the other documents required, including: 1 day Same day - Transfer agreement; - Acceptance Act as the certificate the arrangement between the parties taking place under the Transfer Agreement; - Extract for the property (prepared in Procedure 3); - Grantor s cadastral package documents (obtained from Grantor at the completion Procedure 6) including: (a) A certificate the right the Grantor to the building/land plot (b) The inventory (cadastral) plans the land and the building Igor Popiv & David Egiashvili, World Bank Group Page 36 84
No. Procedure Agency - Application (in the established form); Time to Complete - The notarized copies foundation documents (in case a Limited Liability Company, these are Charter and Foundation Agreement) the Grantor and the Grantee or (obtained in Procedure 5); - The document establishing the right ownership for the building. This document is not compulsory for submission the secondary registration which we present here, however, usually this document must be in possession the owner the building; and - Bank receipt confirming payment registration fee (obtained in Procedure 7). 9 The Service fice issues a registration certificate with the name the Grantee The Grantee s application is reviewed by the registration fice. The registrar inspects the authenticity the presented documents, including verification through the database, registers the transaction electronically in the cadastral book and issues the certificate title registration to the new owner. The district (city) service fice enters the new information into the district (city) cadastre book for non-residential properties, the district (city) registry book for residential properties ( the buildings and constructions) and the state registry for the land plot rights. The registrar also records all information in the relevant supplementary registration books (see chapter Office Processes). The registrar terminates the certificate registration the property recorded in the name the Grantor and issues a new registration certificate in the name Grantee. After the registration, the following documents included in the cadastral package are provided to the Grantee: The Service fice 10 days for physical persons 3 days for legal entities Igor Popiv & David Egiashvili, World Bank Group Page 37 84
No. Procedure Agency Time to Complete (1) Cadastral document (file) the building, with the new certificate registration the right ownership to the building; (2) Cadastral document (file) the land plot with the certificate registration the right lease to the land plot; (3) Cadastral plan the building; (4) Cadastral plan the land plot; (5) The lease contract for the land plot between the new lessee (the Grantor) and the Khokimiyat (local government); and (6) The original registration certificate establishing the right ownership to the building (the one submitted to the registry) and the certificate for the right registered for the land plot with the name the Grantee. The cadastre file has the other original version the new documents stored in the fice archive. 10 Submit the cadastral package to the local tax authorities Local tax authorities In the city Tashkent, the Service submits the information concerning the change the registration records for the property to the local tax authorities in order to update the land and property taxation records for new taxpayer. 2-3 days Overall, the process a property transfer may take a minimum 35-40 days for a physical person and a minimum 10 days for legal entities (considering the legal entities do not need procedures 4 and 5; and procedure 9 is performed faster for legal entities). Doing Business Report - Registration Analysis As part the World Bank mission assessment, there a specific property transfer case reviewed in the Doing Business report (http://www.doingbusiness.org/data/exploreeconomies/uzbekistan/registeringproperty). The presented case assumes the transfer the existing property (land and the construction on it) from one legal entity to another. The case assumes that the Seller has all legal and technical documents for the properties in order (a registration certificate for ownership on the construction, a registration certificate for land lease agreement, and cadastre documentation on the construction and the land plot). For that particular case, the above general secondary transaction process executes in Igor Popiv & David Egiashvili, World Bank Group Page 38 84
rather straightforward sequence steps. The details the case s related steps are presented in Appendix 5. Doing Business: Registering Property in Uzbekistan. The summary for the case is about 10 days for the completion the transfer the land plot and the construction on it, and receiving the registration certificates for the construction and the land plot with the Buyer s name within 8 steps. The difference between these results and what was presented by the Doing Business report (see http://www.doingbusiness.org/data/exploreeconomies/uzbekistan/#registering-property) is due to the Doing Business analysis including a few extra steps from the general secondary transaction process, which are not applicable for this particular property case transfer. Specifically, they included steps 4, 5 and 6 (inspection the property, preparation the cadastre plan and neighbor consent on the boundaries, and issuing the registration for the Seller) which took more than 50 days, but are not applicable for the particular case transferring an existing registered property with all the documentation in place. Those steps are applicable only if the Sellers have not previously registered the properties or if their cadastre documentation is either missing or found to be incompliant with the actual state the property. Igor Popiv & David Egiashvili, World Bank Group Page 39 84
Transfer the Real Estate (Building/Apartment) Stage I: Extract Commercial Bank Tax Agency and Various Utilities and Services Agency State Notary Grantor (Private Person - Seller) Grantee (Private Person - Buyer) Department Reception and Delivery Department Real Estate Cadastre Registration Department Archive Archive Department Department Land Use and Real Estate Cadastre Service (Self financed organization at rayon/town level) Bank receives payment and issue receipt Payment for the Extract the State Registry for the property state fee Application for an Extract the State Registry Check-out application and the payment. Record into Registry Applications Check-out records for the property in State Registry and other registries No transactions are allowed with the property Is property under arrest? Yes No Visit the field and inspect the property on compliance with the Cadastre File records/ plan No Has there Extract been issued within last month? Yes Is property matching the plan? Yes No No other extracts allowed within a month The Grantor will have to apply for the property modification registration before applying for the registration the transfer Applicant is notified that his property has been modified and the modifications will have to be ficially permitted and registered before applying for receiving an extract and proceed with the transfer Record in the Cadastre File that the actual state the property is not matching the registered plans the property Prepare notification the Applicant Prepare the Extract out the State Registry Register the Extract in the Registry the issued Extracts and add the Extract to the Cadastre File Receiving Extract out the State Registry Deliver Extract to the Applicant Storing cadastre file in Archive End Stage I - Extract Figure 14: Transfer the Real Estate (Building/Apartment) Stage I: Extract WBG Page 40 84 Igor Popiv & David Egiashvili June 2011
Transfer the Real Estate (Building/Apartment) Stage II: Notarization and Registration Commercial Commercial Bank Bank Tax Tax Agency Agency and and Various Various Utilities Utilities and and Services Services Agency Agency Bank receives payment Bank receives and issue payment Bank receives receipt and issue payment Each Bank receipt Agency and receives issue prepares payment Statement receipt and on issue the Property receipt and Owner debt status State State Notary Notary Grantor Grantor (Private (Private Person Person - - Seller) Seller) Applying to various agencies to confirm no debts are over the property Collect all debt clearance statements, Cadastre File, Extract the Registry and prepare the Transfer Agreement to apply for notarization Grantee Grantee (Private (Private Person Person - - Buyer) Buyer) Continuing the Transfer Process Stage II Department Reception and Delivery Check-out application and list the supplementary materials. Record into Registry Applications Department Real Estate Cadastre Registration Department Land Use and Real Estate Cadastre Service (Self financed organization at rayon/town level) Validate technical documentation and the need to do field inspection (in case the registration is within a month after the Extract the field inspection is not needed) Check-out content the notarized transfer agreement and the Seller s cadastre file. Record right holder (Grantee) name into State Register Rights for Land Plots Archive Department Bank receives payment and issue receipt Notary checks all the documents provided Is everything OK? - No Debts - Extract - Persons - Fees Yes Notarize the transfer agreement Pay the due notarization fees including state fee, notary services and stamp duty No Both Parties or their attorney will have to come to the notary Fix the problem and reapply to the notary Submit data: - to department for land resources and state cadastre rayon (town); - to tax authority. Enter records into relevant registration books Registration Certificate Printing with the name the Grantee Formation the registration part the cadastre file (dossier) 2 copies Bank receives payment and issue receipt Grantor transfers to Grantee all the documents for the property: - Cadastre File - Notarized Transfer Agreement Grantee receives all the documents for the property and begins registration in its name from paying the due fee for the registration Pay the registration fee Record indexes into archive registry book Storing updated cadastre file in Archive Apply for the property registration with all the supplementary documents End the Transfer Process Registration Completed Receiving registration certificate and 2 nd copy the cadastre file Deliver materials for the Applicant Figure 15: Transfer the Real Estate (Building/Apartment) Stage II: Notarization and Registration WBG Page 41 84 Igor Popiv & David Egiashvili June 2011
Section 5. in Georgia Best Practice Case Study - Public Registry Reforms The mission has considered best practices for registration reforms and identified Georgia as a case study since Georgia is similar to Uzbekistan in being a post-soviet country. Reforms implemented in its property registry ranked it as top reformer in the Doing Business Report 2006. In 2010-2011 ranked Georgia as second in the world on the property registration. Pre-reform status From 1998-2004 property registration in Georgia was performed by two different institutions; the Technical Bureau Inventory and the Georgian State Department Land Management. This caused great confusion for the general public. The State Department Land Management (SDLM) was the responsible institution for land administration and land management, creating a conflict interest in terms public management. Besides the need to refer to different institutions for registration, the procedures were vague and not clearly defined. For example, the timeline registration was not specified and the fice used the general administrative code that allowed one month for issuing certificate (usually violated). Document flow in the registration fices was chaotic, going through unnecessary administrative chains control leading to inefficient use time and human resources. The State Department Land Management, directly subordinated to the Government, had a wide range responsibilities and functions, including registration property rights and maintaining the cadastre, privatization state owned land, leasing state owned land, categorization and valuation land for taxation purposes, compiling land statistics, controlling the use land and natural resources, mediating land disputes and other land management tasks. Some these responsibilities conflicted with each other which lead to corrupt practices. In addition, roles and responsibilities SDLM were overlapping with some other government entities: Ministry State Property Management, Ministry Urbanization and Construction, Bureau Technical Inventory, State Department Geodesy and Cartography, Ministry Agriculture and the Chamber Public Notaries. Moreover, the local fices SDLM were accountable to the local authorities which led to serious political influence over land valuation, registration and land dispute processes. A persistent lack funding (SDLM was State funded) created serious constraints for SDLM in performing its services. For consumers -- individuals as well as legal entities -- the registration process was very complicated and time-consuming. Citizens had to pay many ficial or unficial fees. According to Doing Business 2005 (reflecting the situation prior to 2004), registration property required 8 procedures, 39 days and the cost was 2.5% property value. Property Registration Reform After the Rose Revolution the government launched radical reforms in the country and initiated large anticorruption measures. A working group was established within the SDLM for developing a reform strategy Igor Popiv & David Egiashvili, World Bank Group Page 42 84
and drafting new legislation. Its guiding principles were securing registration and recognition property rights subject to legal registration; ensuring accessibility Public Registry information, and establishing a unified, customer-oriented processes and systems for information about property. This was the ideology the reform. The cadastre and registration system reform had four main pillars: institutional, legislative, administrative and technological. The first phase the reforms focused on legal and institutional issues that took almost 10 months. In June 2004 the Parliament approved the Law on State Registry. In line with the structural reorganization the Government Georgia, the State Department Land Management was liquidated and the National Agency Public Registry (NAPR) was established under the Ministry Justice as a self-financing public legal entity. Some the duties and responsibilities the Bureau Technical Inventory (BTI) were absorbed by the NAPR. Currently the role BTI is limited to serving as a repository the registry archives in Tbilisi. The land management functions the SDLM were shifted to the Ministry Environment and Ministry Agriculture, and the surveying service was transferred to the private sector. The new structure allowed the NAPR to become a self-sustainable agency. The creation the NAPR practically provided a basis for the establishment a new registration system. Land management fices have been transformed into regional registration fices which are free from the influence the local government. The central government is responsible for the registration property rights. In December 2004 the Law on Registration Fees for Services the National Agency Public Registry was approved. This law defined the fees chargeable by the NAPR for its services and established a specific timeline for the provision these services. With the exception agricultural land registration, the fees under the new law were slightly higher than the ficial fees charged by the SDLM. To eliminate the corruption in the registration process, customers had the ability to refer to the fee schedule and payment terms the law. NAPR introduced expedited services with increased fees for those customers that were willing to pay extra to register their property in a day. The processing all payments was transferred to the commercial banks, and the agency discontinued the fee payment practice at the registry. Through the institutional reform the agency created a one-stop-shop for customers that significantly simplified the registration procedures and fered improved services. Currently customers apply only to the National Agency Public Registry, instead the BTIs, the Chamber Notary and the Land Management Office. By optimizing registration procedures the time period for registration was significantly shortened. Registration fees were also differentiated based on the complexity the application. Registration municipal properties as well as registration real estate under construction was added to the system. In terms the administrative reform, the agency selected qualified pressionals through a qualification exams system, and the recruited staff were fered increased salaries. The administrative reform included dramatic changes. The old management the SDLM was terminated. The staff moved to the new registry, but had to apply for their positions and take an exam to retain their positions. A massive recruitment campaign launched through the mass media invited all interested candidates to apply. NAPR conducted over 3,000 examinations. The average salary an SDLM employees 41 GEL ($23) in 2003 was increased to 740 GEL ($411) in 2005. This increase was possible due to the introduction the new registration fee Igor Popiv & David Egiashvili, World Bank Group Page 43 84
system. For further pressional development the NAPR staff, qualification, training and workshops were regularly conducted. NAPR began the process centralization the information and structuring the registry. The accountability the local fices was shifted from the local governments to the NAPR central fice. The maintenance the information was transferred to the information management center. Accounting and procurement was conducted through the NAPR central fice. The main objective the technological reform was the development a registration stware, integration the registration fices into an electronic network; creation a unique database for the system; accessibility information through the internet; online operation and assurance disclosure information. The registration stware called NAPReg was developed based on an Oracle database interface with mapping information produced through an ESRI (GIS stware provider) based format. Integration the cadastral data for the whole country (that is, ortho-photos, satellite photos and other electronic data) was undertaken with the assistance donor funding and placed on the server. Currently, the information can be accessed through an NAPR web-page (www.napr.gov.ge). The database allows searches by name, surname, address, cadastral code, registration number and by any specification implied by the database. It also provides information on the existence liens on properties. The new set legislative amendments from December 19, 2008 unified all regulations for the registration rights on movable property (in relation to lease and pledge agreements), thus simplifying all property registration procedures for applicants. Registration rights on movable property and approval signatures on agreements are done immediately after application. It takes three days to issue a mortgage certificate, make changes to it and register restrictions on property. Registration rights to immovable property takes 4 days; and registration a proprietary right to land takes 10 days. Standard fees were replaced by expedited procedures for eleven different activities the registry. As a result, all aforementioned procedures can be accomplished in one day, for a special fee. Igor Popiv & David Egiashvili, World Bank Group Page 44 84
Section 6. Recommendations Policy and Institutional Arrangements It is critical that the GoU develop an overall strategy for the reform the land registration and cadastre system that will clearly identify a vision and an action plan for institutional, financial and technological enhancements. Although various public organizations in Uzbekistan have commented on the importance reforms, it is unclear what they mean by the reform, what accomplishments they are targeting to achieve and what tools they are planning to use. The GoU should adopt a new law on property registration, followed by specific regulations and by-laws improving the organizational and methodological support for the registration services. The GoU should initiate the establishment the private land ownership system in the country. At this initial stage, the government can start by privatizing the land under the buildings. There is little sense in keeping land under the private commercial constructions as well as residential buildings in state ownership. All the cadastre and registration services should be reorganized into a single, self-financed national registration and cadastre agency. The registration and cadastre agency should maintain and administer an integrated national cadastre the immovable property. The registration and cadastre agency should prepare and issue, as a legal normative act, standards for the digital cadastral survey data submitted by the private sector. The registration and cadastre agency should enable electronic data exchange with other organizations to speed up the process registration and eliminate extracts compliances provided by other organizations (notaries, tax agency, Ministry Architecture and Construction). The registration and cadastre agency should work with the related institutions on designing, developing and maintaining the Unified System State Cadastres. Services the cadastral surveys should be transferred to the private sector. Although, theoretically the coexistence the state and private land survey systems is possible, as a practical matter, it does not work due to the lack free and open competition. The method for calculating service fees should be revised to ensure financial sustainability and efficient operation the institution, as well as fair and affordable charges for public; Initiate capacity building activities. Employees the concerned agencies should be regularly trained in the technical as well as legal issues in order to improve the quality the services provided by the state to the public. A public awareness campaign should be launched that will increase clients understanding their rights and obligations. Igor Popiv & David Egiashvili, World Bank Group Page 45 84
Procedures Surveying already registered properties should be eliminated unless there is a change in the configuration the property boundaries. The system should have confidence in the registry records. This will save resources and time. Laws and regulations need to be elaborated (which is currently nonexistent) which will clearly define the list documents required for registration rights that will eliminate the practice requesting additional documentation by the registry fices. The government should facilitate development a Land Registration Manual. The employees registration services should be trained using this manual as a guideline for registration to ensure consistency to the standard procedures all over the country. Requirement registering property within 30 days from the date the transaction should be clearly stated in the sale-purchase contract. Notaries also have to inform buyers about this requirement. Separate registries in the cadastre and registration services should be integrated using computer technologies. The registries should be integrated with the cadastre using modern GIS technologies. Data about old transactions should be scanned and maintained in an electronic format for easy tracking (mainly involves data from BTI). Some Specific Comments The analysis the registration process (Section 4. Registration Processes Analysis) exposed one the most cumbersome steps for a grantor to obtain all required debt clearance statements for the property as well as for the grantor. This is step 4 the Stage II (Notarization the Transfer) according to the description the process in Table 1. Moreover, as we have learned from various interviews, the notaries are not able to perform the thorough and responsible verification the Grantor s debt status. It has been admitted that this verification is rather superficial and the notaries are at best simply counting the number statements required and have no ability to verify the authenticity documents. Due to this situation, we recommend that notaries and the registration service drop this inappropriate function. Understanding the need to ensure that the local utilities and services are adequately and timely compensated by households and apartments owners, we recommend that local municipal authorities set procedures and allocate resources for tracking the debt status every local service consumer. The local municipalities will have to define mechanisms, including appeal to the court, for repayments or other means receiving compensation. That will enable municipalities to take more control over their jurisdictions and at the same time generate timely inflow payments from all owners, not only those transferring their property. The municipalities may even appeal to the court and apply to the registration Igor Popiv & David Egiashvili, World Bank Group Page 46 84
service for establishing a prohibition on the property transfer. Furthermore, it would allow the potential Grantees to verify the property s debt status at the municipality one-stop-shop. The property registration fee in Uzbekistan is calculated as a percentage a minimum salary which unfortunately may not be a fair representation actual costs. According to international experience, registration fees could be based on the property value, if the documents being registered resulted from a transaction, or could be based on the actual cost the services provided by the registration fice. Since there is no efficient and transparent property valuation system, it is better to link the fee to the cost the services provided. Note, however, that countries that have recently introduced title registration systems have discovered that charging high fees for first registration can cause the public to avoid the first registration and delay it until the prospect the sale or transfer secondary transaction. This is because even a flat rate fee for first registration is an involuntary, unrecoverable cost and hence a disincentive to registering the title. Governments are reluctant to waive fees for first registration and forgo the potential revenue that first registration can generate. However, international experience has shown that governments that do not charge fees on first-time registrations, or charge only very low, nominal fees, quickly recover their investments on subsequent transactions, increased property tax collection, and economic growth through real estate transactions and finance. Low initial registration fees also remove a significant disincentive to registration and consequently result in greater coverage for the cadastre as a whole. In Uzbekistan, the fee is determined by the GoU and would not require an amendment legislation by the Majlis. The following table suggests which reform actions should be undertaken in the short-term vs longer-term. Short-term recommendations: Recommendation Create intergovernmental working group that will come up with Unified Property Registration Strategy Develop a Strategy for Unified Property Registration Institution to separate land administration and land management responsibilities Consolidate different legal documents and regulations into a single law Transfer land surveying responsibilities form state to the private sector to support the development private land surveyors Type recommendation Strategy Strategy Legal Reform Institutional Reform Problem addressed by the recommendation Nonexistence vision and unified Property Registration Strategy Nonexistence vision and unified Property Registration Strategy Fragmented and outdated legislative framework Government limiting competition in land surveying and monopolizing service Assess training needs for the employees the Human Resources Low skill levels in registration Igor Popiv & David Egiashvili, World Bank Group Page 47 84
Registration Offices Conduct regular trainings for the employees registration services based on identified needs (possibly on respective legislation, registration procedures, etc) Establish government program for providing computer equipment and network infrastructure to all cadastre services Uzbekistan Initiate a Public Awareness Campaign to educate public on the benefits property registration. Maintain a hotline to track the quality the services provided to the public Human Resources IT Public Outreach fices Low skill levels in registration fices Lack computer equipment and inability by the cadastre services to self-generate enough revenue for the investments Lack public awareness on rights and responsibilities regarding land/real estate Longer-term recommendations: Recommendation Standardize the procedures for processing every type the registration transactions Develop Registration Guideline/Manual for Registrars Notaries and the registration services should be removed the duty to check the debt clearance statements for the Grantor and the property upon registration Define regulations and procedures for municipalities to apply with registration the prohibitions for the properties, which have failed to compensate the due payments for the consumed utilities (power, water, sewage, etc.) and related auxiliary services Type recommendation Legal Reform Legal Reform Legal Reform Legal Reform Problem addressed by the recommendation No detailed registration procedures. This leads to inconsistencies in interpreting various instructions and regulations No Registration Guideline/Manual for Registrars that results in inconsistencies in the various registration fices Requirements for utility payments for the registration property extends the timeline for registration Municipalities are not able to collect due payments for the utilities provided to households/apartments Igor Popiv & David Egiashvili, World Bank Group Page 48 84
Prepare a strategy for the development a pledge registry Unify registration the property sale and hypothec regulations Allow private sector involvement in surveying. Greater reliance on the private sector could add to efficiencies and stimulate development the related services especially in the creation spatial data and populating the integrated national cadastre with different thematic layers Focus government mapping institutions on standards, quality and NSDI. The government should focus on producing base maps and validating and integrating the data produced by private licensed surveyors Create one self-financed institution for unified and centralized cadastre and registration for buildings and land Recalculate tariff system to be consistent with ongoing developments Build a strong capacity for ongoing training, support and maintenance the system and users. Establish regular training and certification programs for cadastre and registration fices staff. Develop/introduce a standardized registration and cadastre stware application that would integrate work processes within fices as well as enable continuous online accumulation the data at the central fice Legal Reform Legal Reform Institutional reform Institutional reform Institutional and Financial Reform Financial Reform Human Resources IT Undeveloped pledge registry Undeveloped hypothec regulations that leads to specific legal problems during the sale the property through hypothec financing Cadastre services and GUP UzGASHKLITI GosArchitectStroy have monopolized the production the surveying plans for properties Cadastre services and GUP UzGASHKLITI GosArchitectStroy have monopolized the production the surveying plans for properties Different registries exist for different properties and maintained by different self-financed semiautonomous services Current tariff system is inadequate for operation the self-financing institution Lack appreciation by the public institutions that the property cadastre and market development will require continuous efforts in building capacity and education staff and public Non existence standardized registration and cadastre application stware Igor Popiv & David Egiashvili, World Bank Group Page 49 84
Digitize and unify different records into a unified cadastre-registration system; integrate data into a central database Design and implement governmental program digital- (vector-) based and indexed maps development for usage by all cadastre services and licensed surveyors in producing the detail cadastre maps the land plots IT Mapping Paper-based manual registration and cadastre with disconnected and incompatible automation. Data are stored in separate registries/books and are not unified Cadastre services are using paper or raster index maps which serves as a poor base for geo-referencing land plot boundaries Igor Popiv & David Egiashvili, World Bank Group Page 50 84
Appendix 1. Workflows for Land Parcel Selection and Allotment Process (Resolution the Cabinet Ministers #146 dated 25 May 2011) Figure 16: Selection land parcel (LP) for the construction design Selection land parcel (LP) for the construction design whilst absent urban construction documentation or its presence Applicant Applicant (Legal (Legal or or Private Private Person) Person) Authority Authority territory territory Khokimyat Khokimyat rayon rayon (town) (town) Commission Commission territory territory (Commission (Commission for for allocation allocation LP) LP) Architecture Architecture territory territory (Department (Department (Administration) (Administration) architecture architecture and and construction) construction) Cadastre Cadastre Service Service territory territory (Service (Service for for landutilization landutilization and and real real estate estate cadastre) cadastre) State State Cadastre Cadastre territory territory (Department (Department (Administration) (Administration) for for land land resources resources and and state state cadastre) cadastre) Permitting Permitting organizations organizations (More (More then then six six different different organizations) organizations) Architecture Architecture Region Region Main Main Design Design (Main (Main Administration Administration Institute Institute Architecture Architecture and and (Main (Main design-survey design-survey Construction Construction institute) institute) Region) Region) Designer Designer (Designing (Designing Organization) Organization) Start 1 st Stage Application Review (3 days) Proposal preparation for allocation LP with base plan Taking part in the commission to endorse the proposal Taking part in the commission to endorse the proposal Taking part in the commission to endorse the proposal These activities are not engaged when urban development plans are available and then LP selection endorsement is performed by Architecture territory Receiving Conclusion on Ecological Impact Evaluation ZVOZ (contracting licensed company) Endorsement with more than six organizations Prepare materials for allocation LP 10 days for proposal endorsement Notice on the day joint meeting the Region Commission (2 days) Region Commission endorsement the LP allocation (5 days) Science-Technical Council the Institute for endorsement Preparation endorsed materials for LP allocation for delivery (1 day) Endorsement Protocol preparation with topo-plan LP allocation (7 days) Preparation materials to endorse selection LP Preparation conclusion on LP selection (7 days) Preparation conclusion on LP selection (7 days) Review and approve decision for LP selection (3 days) Review materials and prepare Protocol Endorsement and Conclusion on LP selection (3 days) Preparation Materials for Rayon Commission selection LP within urban areas Preparation Materials for Rayon Commission selection LP outside the urban areas 11 Days to coordinate the selection LP Payment for dossier on selection LP Preparation dossier (file) on selection LP (3 copies) within urban areas Preparation dossier (file) on selection LP (3 copies) outside urban areas Start 2 nd Phase Receiving Decision and Dossier on selection LP End 1 st Stage Contract for construction design development Igor Popiv & David Egiashvili, World Bank Group Page 51 84
Allotment land parcel (LP) and field boundaries setting Applicant Applicant (Legal (Legal or or Private Private Person) Person) Authority Authority territory territory Commission Commission Khokimyat Khokimyat territory territory (Commission (Commission rayon rayon (town) (town) for for allocation allocation LP) LP) Architecture Architecture territory territory (Department (Department (Administration) (Administration) architecture architecture and and construction) construction) Cadastre Cadastre Service Service territory territory (Service (Service for for landutilization landutilization and and real real estate estate cadastre) cadastre) State State Cadastre Cadastre territory territory (Department (Department (Administration) (Administration) for for land land resources resources and and state state cadastre) cadastre) Khokim Khokim Region Region and and Region Region Commission Commission Architecture Architecture Region Region Main Main Design Design Institute (Main Institute (Main Administration Administration (Main (Main design-survey Architecture design-survey Architecture and and institute) Construction institute) Construction Region) Region) Designer Designer (Designing (Designing Organization) Organization) Conclude Contract for construction design development Design Development and Monitoring Monitoring progress and timeline the design development Approval the construction design (7 days) Contract for construction design development Construction Design prepared State examination the design (According to the regulations) Receiving design, approval and state examination Start the 2 nd Stage LP Allotment Application for LP allotment with supplementary materials Review (3 days) Receive materials for LP allotment within urban areas Receive materials for LP allotment outside urban areas Conclude Contract preparation the documents for allotment According to Contract preparation the materials for LP allotment (Up to 15 days) Later will have to be approved by decision Kengash deputies (local elected council) Application and payment for setting boundaries in the field Decision for LP allotment and file formation for LP allotment and field boundaries setting (3 days) Review and approval the LP allotment materials (3 days) In cases when decision on LP is not within authority Khokim rayon (town) Setting LP Boundaries in field Take part in Commission and signing f the boundaries Review by Region Khokim (3 days) and Region Commission (5 days) Application for right LP usage End 2 nd Stage LP Allotment Preparation documents stating the rights to use LP РREGISTRATION OF USAGE RIGHT Figure 17: Allotment land parcel (LP) and field boundaries setting Igor Popiv & David Egiashvili, World Bank Group Page 52 84
Appendix 2. Organizational Structure Goskomzemgeodezcadastre Divisions Figure 18: Organizational structure Goskomzemgeodezcadastre divisions Chairman the Committee First Deputy Chairman Deputy Chairman Administration economic, finances and accounting Main Administration Geodesy and Cartography State Cadastral Authority Administration land use and land management Administration the land use and land protection control Main Human Resources specialist Geodesy and Cartography Department State Border Delimitation and Demarcation Department Unified system state cadastres department State Cadastre Buildings and Constructions Departments Department the regulating land relations and land management Department preproject, project works and expertise Land monitoring department Department the land use and land protection control Legal expert Special department Department State Land Cadastre Disposal business affairs National Center the Geodesy and Cartography Samarkand aero-geodesic enterprise Self-supporting Services Land Use and Real Estate Cadastres AR Karakalpakstan, regions and Tashkent Entities in charge Oblast and Rayon fices State Land Cadastre State research institute for Soil Science and Agricultural Chemistry State Scientific Production Institute Uzdaverloikha Administration the land resources and State Cadastre AR Karakalpakstan, regions and Tashkent State Scientific Production Enterprise Cartography State Unitary Enterprise GUP GeoInformCadastre State inspection the geodesic control Central aero-geodesic enterprise Igor Popiv & David Egiashvili, World Bank Group Page 53 84
Appendix 3. State registration rights for land parcels, buildings and departments and transactions with them Table 2. State registration rights for land parcels, buildings and departments and transactions with them Rights for land parcels Rights for buildings and constructions Mortgage contracts # Region Urban and township lands Number land parcels Total area, ha Registration fees, ths UZS Lands other territories Number land parcels Total area, ha Registration fees, ths UZS Department al objects Number objects Registration fees, ths UZS Individual housing Number objects Registration fees, ths UZS Privatized apartments Number objects Registration fees, ths UZS Nonresidenti al buildings and construction Number objects Registration fees, ths UZS Rights for land parcels Number contracts Registration fees, ths UZS Rights for buildings and construction Number contracts Registration fees, ths UZS Total registration fees, ths UZS 1 Karakalpaksta n Region 2099 18237. 6 6920 25600. 7 4601 18697. 5 2764 27714. 6 698 628.3 90878.7 2 Andijon Viloyati (Province) 2176 410.4 10834. 9 2517 659.7 14324. 6 188 3715.5 8636 35885. 4 905 3929.2 3807 31477. 6 1581 12770. 9 199703. 6 3 Buxoro Viloyati 371 228.1 2249.3 301 264.6 1927.8 269 2442.8 3802 20946. 0 3310 17799. 3 1407 8341.7 139 626.9 210 951.8 55285.6 Igor Popiv & David Egiashvili, World Bank Group Page 54 84
(Province) 4 Jizzax Viloyati (Province) 1113 245.9 9384.6 645 527.4 6654.6 136 3762.1 2919 11399. 5 3149 12714. 0 2007 17565. 0 667 7380.7 68860.5 5 Qashqadaryo Viloyati (Province) 4422 27708. 8 62 7498.0 2971 15403. 1 2872 9494.4 2177 22509. 6 589 9395.2 92009.1 6 Navoiy Viloyati (Province) 1348 27.5 5898.1 35 3035.8 658.5 56 1259.4 2673 16502. 7 5736 35556. 9 2113 20935. 5 2 39.6 1373 12779. 7 93630.4 7 Namangan Viloyati (Province) 138 94.4 1830.9 67 23.4 379.8 87 1355.5 4309 21668. 0 4346 22014. 1 2188 18391. 7 265 210.7 507 4406.3 70257.0 8 Samarqand Viloyati (Province) 6663 2540.2 45318. 3 76 363.6 580.0 113 2014.3 7483 42069. 8 5026 23817. 1 2818 42434. 4 2 0.8 965 8907.6 165142. 2 9 Sirdaryo Viloyati (Province) 186 24.8 849.6 90 538.2 515.9 6 116.8 4005 22344. 3 2684 9846.9 1957 14034. 6 199 2411.2 50119.3 1 0 Surxondaryo Viloyati (Province) 2584 288.9 15431. 0 10 31.6 143.0 1694 6711.2 834 3470.1 890 8719.8 126 1081.2 35556.4 1 1 Toshkent Shahri (Province) 1666 9152.2 16361. 3 552 6580.5 6605.3 1 2770.0 19929 89245. 4 8802 37056. 8 2916 177320.8 1369 15150. 9 344510. 5 Igor Popiv & David Egiashvili, World Bank Group Page 55 84
1 2 Farg'ona Viloyati (Province) 2732 499.4 19400. 6 1392 5281.0 12243. 2 79 2046.6 7918 69336. 1 10631 68670. 9 3076 40049. 0 1183 17119. 9 273652. 4 1 3 Xorazm Viloyati (Province) 3810 1571.8 23175. 9 2865 9576.1 22111. 3 167 2950.3 3792 15497. 3 2922 12208. 4 2521 24896. 8 5 22.8 786 10432. 6 111295. 4 1 4 Toshkent Shahri (City) 3571 2885.1 41412. 0 286 3559.0 10144 39121. 0 38659 141188.0 3555 40517. 0 1508 20956. 0 286753. 0 Total: 32879 17968. 8 238092.8 8550 26881. 9 66144. 1 1450 33490. 2 87195 431730.5 94477 416463.6 34196 494908.1 413 900.8 11761 124372.3 1937654.0 Igor Popiv & David Egiashvili, World Bank Group Page 56 84
Appendix 4. Types Transactions Table 3. Types transactions Right Category # Right or Restriction Legal Norm Legal Persons Physical Persons Comment 1. Permanent ownership Article 20 Land Code YES YES Permanent ownership is certified by State Act on the permanent ownership the land parcel Rights Legal and Individual Persons on land parcels 2. Permanent use Article 20 Land Code 3. Urgent (temporary) use Article 20 Land Code 4. Lease Article 20 Land Code, Article 535 Civil Code; Article 5 Law On lease" 5. Property Articles 16, 18 Land Code YES YES Permanent use is certified by State Act on the right permanent use the land parcel YES YES YES YES Terms and conditions lease land parcels are determined by agreement between the parties and secured by this agreement. Sublease the leased land parcel or its part shall be prohibited, except cases provided by law. (Part Law the Republic Uzbekistan dated 30.08.2003, N 535-II) NO, except special cases* NO, except special cases* The right ownership legal persons and individuals on land parcels arises in the way prescribed by law, during privatization the sale and service objects along with the land on which these objects are located. * The right ownership foreign legal entities and individuals on land parcels (members the diplomatic bodies, representatives the printed media Igor Popiv & David Egiashvili, World Bank Group Page 57 84
Right Category # Right or Restriction Legal Norm Legal Persons Physical Persons Comment accredited in the Republic Uzbekistan, members permanent representative fices firms, companies and international organizations, individuals working on a permanent basis in the enterprises with foreign investment, as well as those residing in the country and have a residence permit, arises during realization the housing premises in the way prescribed by law, together with the land parcels on which these premises are located. See Sections 1, 7, Chapter 29 the Civil Code. 6. Perpetual inheritable possession Article 19 Land Code NO YES Perpetual inheritable possession is certified by State Act on the right perpetual inheritable possession the land parcels. Encumbrances Rights for the land parcels 1. Prohibition sale or another disposal property 2. Prohibition sublease and subcontract 3. Prohibition change the main target purpose 4. Prohibition some activity categories Article 29 Land Code YES YES Encumbrances associated with land parcel are added into its legal status, subject to State registration and saved during transition this parcel to the possession other person. YES YES In the case described in section 10 Article 51 Land Code about Lease. YES YES YES YES Igor Popiv & David Egiashvili, World Bank Group Page 58 84
Right Category # Right or Restriction Legal Norm Legal Persons Physical Persons Comment 5. Encumbrance with condition to implement the measures needed for soil preservation and improve soil fertility, maintain the irrigation and reclamation systems in the perfect state 6. Encumbrance with condition to begin and complete building or land parcel development in specified period YES YES YES YES 7. Encumbrance with condition to comply with the natureconservative requirements YES YES Carry out certain works, including storing soil cover, rare plants, State nature monuments, as well as objects material cultural heritage available on the land parcel. Igor Popiv & David Egiashvili, World Bank Group Page 59 84
Right Category # Right or Restriction Legal Norm Legal Persons Physical Persons Comment 8. Other obligations YES YES Land parcel may be associated with another obligation, limitation or term established by law. 9. Mortgage YES YES It occurs when the mortgage received on the building and land parcel on which this building is located. 10. Lease YES YES For lessor. 11. Arrest YES YES 12. Protection zones YES YES The protection zones are established by authority decisions in accordance with the regulations exploitation infrastructure objects. Servitudes 1. Easement on the pass or transit through another's land parcel 2. Servitude drainage work on the foreign land parcel; Article 30 Land Code Article 173 Civil Code YES YES Right limited use someone else s land parcel (easement) right limited use one or several neighbouring land parcels. YES YES An easement is established by agreement between the parties requiring the establishment an easement and the owner, user, leaseholder, owner a foreign land parcel. In case failure to reach such an agreement, an easement is established by a court decision. An easement agreement is subject to State registration and saved during land Igor Popiv & David Egiashvili, World Bank Group Page 60 84
Right Category # Right or Restriction Legal Norm Legal Persons 3. Servitude cabling and using the transmission facilities, telecommunications; and YES Physical Persons YES Comment transfer to another person. An easement agreement may be terminated in case termination the grounds on which basis this easement was established. Pipelines, irrigation, engineering and other lines and networks on a foreign land parcel. 4. Servitude water intake and watering on a foreign land parcel. 5. Servitude driving cattle through a foreign land. 6. Easement temporary use someone else s land parcel for production and exploration, research YES YES YES YES YES YES Igor Popiv & David Egiashvili, World Bank Group Page 61 84
Right Category # Right or Restriction Legal Norm Legal Persons Physical Persons Comment and other activities. 7. Easement creating protective forest plantations and other conservation objects on a foreign land. Easement may be also established for other purposes. YES YES 8. Entrusted administration property СТ.СТ.849-854 YES YES Related to the life inheritable possession a land parcel. Private Property (Buildings and Constructions) 1. Private ownership Articles 164, 207, 208, 209, 213, 214, 215, 216 Civil Code) YES** YES Article 207. Private ownership right Private ownership right is a right possesion, use and disposal property acquired in accordance with the law. ** Article 208. Parties the private ownership right Parties the private ownership are citizens, business partnerships and companies, cooperatives, associations, social funds and other private legal entities. Igor Popiv & David Egiashvili, World Bank Group Page 62 84
Right Category # Right or Restriction Legal Norm Legal Persons Physical Persons Comment 2. Common ownership Article 216 Civil Code YES YES The property owned by two or more individuals belongs them on common ownership right. Ownership can be held in equal or unequal shares (ownership in common) or without definition such shares (joint ownership). Common property ownership is shared except cases when joint tenancy is stipulated by law. 3. Operating control Articles 165, 178, 181 Civil Code YES NO An unitary enterprise or institution to which the owner allots the property, gains the right economic management or right operating control the property by law or by owner s decision. 4. Economic management Articles 165, 176, 177, 181 Civil Code YES NO 5. Lease Article 537 YES YES Igor Popiv & David Egiashvili, World Bank Group Page 63 84
Right Category # Right or Restriction Legal Norm Legal Persons Physical Persons Comment 6. Entrusted administration property Articles 849-854 YES YES Under a contract trust management property, one party (founder administration) gives to another party (entrusted administrator) the property in entrusted administration for a certain period, and this second party is obligated to administer this property for the benefit the founder administration or an individual specified by the founder (the beneficiary). The property being in economic management or operating control cannot be transferred to entrusted administration. The transfer real estate into entrusted administration is subject to State registration in the same manner as the transfer title for this property. See Article 84 Civil Code. 1. Republican ownership Article 214 Civil Code NO NO Article 213. The concept public ownership Public ownership is state ownership that consists republican ownership and administrative-territorial formations (municipal ownership). The property in republican ownership can be alloted to legal entities on the basis economic management or operating control right. Public Property Refer to Article 14 Civil Code. Objects republican ownership can be alienated to the private ownership in the manner and on terms established by law. Igor Popiv & David Egiashvili, World Bank Group Page 64 84
Right Category # Right or Restriction Legal Norm Legal Persons Physical Persons Comment Refer to law On denationalization and privatization ; Regulation on denationalization and privatization state ownership objects, approved by the Cabinet Ministers 21.07.2006, # 145. 2. Municipal ownership Article 215 Civil Code NO NO The property being in municipal ownership are managed by local government authorities or authorized agencies, if different is not provided by law. See Articles 22, 23 law On property in the Republic Uzbekistan. The property being in municipal ownership can be alloted to legal entities on the basis economic management or operating control right. See Article 14 Civil Code. 1. Mortgage YES YES Together with land parcels on which building or construction is located. Encumbrances Rights for Buildings and Constructions 2. Lease YES YES For lesser 3. Prohibition alienation YES YES 4. Arrest YES YES Igor Popiv & David Egiashvili, World Bank Group Page 65 84
Right Category # Right or Restriction Legal Norm Legal Persons Physical Persons Comment 5. Special conditions exploitation, conservation zones YES YES Monuments cultural heritage, etc. Igor Popiv & David Egiashvili, World Bank Group Page 66 84
Appendix 5. Doing Business: Registering Property in Uzbekistan As part the World Bank mission assessment, there a specific property transfer case reviewed in the Doing Business report (http://www.doingbusiness.org/data/exploreeconomies/uzbekistan/registering-property). The presented case assumes the transfer the existing property (land and the construction on it) from one legal entity to another. The case assumes that the Seller has all legal and technical documents for the properties in order (a registration certificate for ownership on the construction, a registration certificate for land lease agreement, and cadastre documentation on the construction and the land plot). For that particular case, the above general secondary transaction process executes in rather straightforward sequence steps. The details the case s related steps are presented in Appendix 5. Doing Business: Registering Property in Uzbekistan. The summary for the case is about 10 days for the completion the transfer the land plot and the construction on it, and receiving the registration certificates for the construction and the land plot with the Buyer s name within 8 steps. The difference between these results and what was presented by the Doing Business report (see http://www.doingbusiness.org/data/exploreeconomies/uzbekistan/#registering-property) is due to the Doing Business analysis including a few extra steps from the general secondary transaction process, which are not applicable for this particular property case transfer. Specifically, they included steps 4, 5 and 6 (inspection the property, preparation the cadastre plan and neighbor consent on the boundaries, and issuing the registration for the Seller) which took more than 50 days, but are not applicable for the particular case transferring an existing registered property with all the documentation in place. Those steps are applicable only if the Sellers have not previously registered the properties or if their cadastre documentation is either missing or found to be incompliant with the actual state the property. Below is a detailed summary the steps, time and cost involved in registering property, assuming a standardized case an entrepreneur who wants to purchase land and a building that is already registered and free title dispute. Table 4. Sample Standard Property Transfer. Property Value: UZS 86,877,515.55. City: Tashkent No. Procedure Agency Time to Complete Associated Costs 1 Payment the fee at a commercial bank for provision the Extract out the State Commercial 1 day ~UZS 10,000 Igor Popiv & David Egiashvili, World Bank Group Page 67 84
No. Procedure Agency Time to Complete Registry The service fee is paid to the settlement account the cadastral services through a bank. The seller pays the fee for the services before applying at the Cadastral Service fice. Bank (in the City Tashkent it is located in the same building floor as the Cadastre Service) Associated Costs (20% the minimum monthly wage) as the service fee for an extract the State Registry 2 Seller applies for the Extract about real property at the Cadastral Service fice the city district The seller files an application with the City (District) Cadastral Service for obtaining an extract out the State Registry on the property and provides the Bank receipt confirming payment registration fee (obtained in Procedure 1). Cadastral Service Office Same day Paid in Procedure 1 Inspection the property to determine its actual state and compliance with the cadastre and prepare the Extract About 3 days Already paid in Procedure 1 3 The Service properties inventory staff has to visit the property and attest its current state and compliance with the cadastre records. In case major constructive changes, modifications are identified either in the building construction or land plot area, and the applicant will have to apply to the Cadastre Service to legalize and register the changes according to a separate procedure. In our particular case, the actual state the property is compliant with the cadastre Cadastral Service Office Igor Popiv & David Egiashvili, World Bank Group Page 68 84
No. Procedure Agency Time to Complete documentation and the Service prepares the Extract and provides it to the Applicant. The Service records the issuance the Extract in the registry issued extracts. The extract includes the details about the person s name, type person (legal or physical), type property, address and location, type right, main technical parameters the property and land plot, registered rights and restrictions and the references to the State Registry records. The extract is effective within 1 month. Associated Costs 4 Payment state fees and notarization costs at a commercial bank The cost notarization is paid to the state budget as only state notaries are operating in Uzbekistan. Note that the current monthly wage is UZS 49,735, and the surface area is 557.4 m2 (land) plus 929 m2 (building). Commercial Bank 1 day UZS 924,076-2% minimum wage per square meter surface area the property (notarization sale agreement and state fees). 5 Notarization the sale agreement and foundation documents seller and buyer The sale agreement is notarized by a state notary which are the only notaries allowed to operate in Uzbekistan. To notarize the sale agreement, it is usually required to produce the original certificate title registration. There is no legal requirement for the contract sale building and land plot to be prepared by a lawyer. The parties may prepare the contract themselves or use a model contract sale. However, under State Notary 1-3 days In addition to those already paid in Procedure 4, there are 5% the minimum monthly wage Igor Popiv & David Egiashvili, World Bank Group Page 69 84
No. Procedure Agency Time to Complete the Uzbek legislation all economic contracts with the cost exceeding 200 minimum monthly wages shall be concluded only after issuance lawyer's Legal Opinion on the contract. The legal opinion shall be made either by an in-house lawyer or by an advocate. The buyer and the seller sign and seal the sale contract. The buyer and the seller shall sign the acceptance act. There is no standard or specific form established for the acceptance act. According to the Civil Code, the parties shall sign an acceptance act or any other document on the transfer real property from the seller to the buyer. The companies may use a lawyer to prepare the acceptance act that might charge between UZS 10,000 and 30,000. At the same time, the notary will notarize the copies Foundation documents (in the case a limited liability company these would be Charter and Foundation Agreement) the seller and the buyer. The originals the foundation documents shall be presented to notary. The notary shall make copies out original documents and notarize them. Associated Costs for each page the foundation (4 documents (total 60 pages) UZS 149,205) 6 Buyer pays the registration fee at a commercial bank The registration fee (amounting to half the Minimum Monthly Wage, i.e. = UZS 24,867) shall be paid by the buyer to the account the Registering Office for registration transfer the property rights in the real estate. The payment shall be made prior to the application for registration. The buyer will need to provide the Registering Office with the document confirming payment the registration fee (payment receipt). Commercial Bank 1 day UZS 24,867 (50% the minimum monthly wage) as the state fee for registration a property into State Registry Igor Popiv & David Egiashvili, World Bank Group Page 70 84
No. Procedure Agency Time to Complete Associated Costs 7 Buyer applies for registration at the Registration Office The buyer shall apply to the District (City) Office The Cadastre Service (in this case, it will be the Service Land-Utilization and Real-Estate Cadastre the city Tashkent) for state registration the transfer title. The buyer should produce the original sale agreement as well as the other documents required. The documentation shall include: - Sale agreement - Bank certificate payment received by seller under the Sale Agreement - Extract on the Property (Prepared in Procedure 3) - Seller s cadastral package documents (obtained from Seller after Procedure 5) including: a) A certificate right the Seller to the building/land plot; b) The inventory (cadastral) plans the land and the building. - Application (in the established form) - The notarized copies company establishment documents (in case Limited Liability Company this is a Charter and Foundation Agreement) the seller and the buyer or other documents providing the persons signing the sale contract with power to do so on behalf the seller/buyer (e.g. power attorney) (obtained in Procedure 5). - The document establishing right ownership to the building. This would be most likely one the following: Decision Khokim (the head local administration/municipality) on recognition the ownership right, Order Registration Office - Department Land Resources and State Cadastre - City Tashkent Same day Already paid in Procedure 6 Igor Popiv & David Egiashvili, World Bank Group Page 71 84
No. Procedure Agency Time to Complete ownership, or sale contract concluded with the BTI (Bureau Technical Inventory). This document is not compulsory for submission for the secondary registrations, however usually this document must be in possession owner building. - Bank receipt confirming payment registration fee (obtained in Procedure 6) Associated Costs 8 The Cadastre Services Office issues a registration certificate with the name the buyer. The buyer s application is reviewed by the Registration Office. The Registrar inspects the authenticity the presented documents, including verification through the database and makes a decision about registration, registers in the cadastral book (computer), and issues the certificate about title registration to the new owner. The District (City) Office shall enter the corresponding alterations into the District (City) land-cadastral Book, the District (City) cadastral Book ( the buildings and constructions) and the cadastral documents (cadastral file the building; the cadastral file land plot; cadastral plan the building and the cadastral plan the land plot). The Office shall terminate the certificates registration the property issued to the seller, the lease contract (on the land plot) with the previous lessee (the seller) and provide conclusion the contract lease with the new lessee (the buyer). After the registration, the following documents shall be tendered to the Buyer by the Registry (cadastral package): (1) cadastral document (file) the building (with the new certificate registration right ownership to the building); (2) cadastral document (file) the land plot (with the certificate registration the Cadastre Service Office 3-10 days (for physical persons it's up to 10 days and for legal entities- 3 days). Already paid Igor Popiv & David Egiashvili, World Bank Group Page 72 84
No. Procedure Agency Time to Complete right lease to the land plot); (3) cadastral plan the building; (4) cadastral plan the land plot; (5) the lease contract on the land plot between the new lessee (the buyer) and the Khokimiyat (Local Government) the city Tashkent; (6) the document (original) establishing right ownership to the building (the one submitted to the Registry) with alterations made as regards the name the owner. Associated Costs Total Estimates Duration and Costs the Transaction: Overall about 10 days for transfer the property and land plot from the Seller to the Buyer (as in this particular case between two legal entities and clean property history and cadastre documentation ready) UZS 1,198,148 or ~$685 USD Igor Popiv & David Egiashvili, World Bank Group Page 73 84
Appendix 6. Schedule Meetings Table 5. Schedule Meetings Date and Time Place Attendees Monday, June 20, 2011, 9 to 10:00 The WB Country Office in Uzbekistan Mr. Fazliddin Kh. Rakhimov, Procurement Specialist Mr. Emanuel Salinas, Sector Coordinator for Central Asia Mr. Arif Nasibov, IFC Coordinator ACAF Mr. Michael DeLint, WB Consultant Mr. David Egiashvili, WB Consultant Mr. Igor Popiv, WB Consultant Monday, June 20, 2011, 10:30 to 13:00 State Committee the Republic Uzbekistan on Land Resources, Geodesy, Cartography and State Cadastre Mr. Tulqin Mansurovich Abdullaev, First Deputy Chairman Mr. A. Samborsky, Deputy Director General National Centre Geodesy and Cartography Mr. Rasul Khakimbekov, Chief Registrar c. Tahskent Land Use and Real Estate Cadastre Service Mr. Nazarov, Registrar the Tashkent oblast Land Use and Real Estate Cadastre Service Mr. Marat Saidov (chief department, Cadastre Building), Mr. Shukrat Arsanov, Mr. Shukrat Bobumaratov, Mr. Khasan Magdiyev specialists the Committee Mr. Makhmed Jamanjarov, chief registrar, oblast Tashkent; Mr. Emanuel Salinas, Sector Coordinator for Central Asia Igor Popiv & David Egiashvili, World Bank Group Page 74 84
Date and Time Place Attendees Mr. Michael DeLint, WB Consultant Mr. David Egiashvili, WB Consultant Mr. Igor Popiv, WB Consultant Monday, June 20, 2011, 14:00 18:00 National Centre Geodesy and Cartography State Committee the Republic Uzbekistan on Land Resources, Geodesy, Cartography and State Cadastre Mr. A. Samborsky, Deputy Director General National Centre Geodesy and Cartography Mr. Khasan Magdiyev, Chief Engineer National Centre Geodesy and Cartography Mr. David Egiashvili, WB Consultant Mr. Igor Popiv, WB Consultant Tuesday, June 21, 2011, 9:00 13:00 The State Committee the Republic Uzbekistan on Architecture and Construction Mr. M. Mirzaboyev, Vice Chairman 5 heads departments (administration state supervision, institute engineering research, administration architecture and construction) Mr. Emanuel Salinas, Sector Coordinator for Central Asia Mr. Michael DeLint, WB Consultant Mr. David Egiashvili, WB Consultant Mr. Igor Popiv, WB Consultant Tuesday, June 21, 2011, 14:00 15:30 Chamber Commerce and Industry Mr. A. Shaykhov, Chairman Mr. N. Sultan-Mukhamedov, Executive Officer Mr. Emanuel Salinas, Sector Coordinator for Central Asia Mr. Michael DeLint, WB Consultant Mr. David Egiashvili, WB Consultant Igor Popiv & David Egiashvili, World Bank Group Page 75 84
Date and Time Place Attendees Mr. Igor Popiv, WB Consultant Tuesday, June 21, 2011, 15:45 17:30 The State Property Committee the Republic Uzbekistan Mr. B. Nazarov, Deputy Chairman Mr. U. Vahabov, Head the Department for Foreign and Public Relations Mr. Aziz Nagayev, Head the Department for Valuation and Realtor Activities Licensing Mr. Abudjan Abdulakhatov, Chief Department Auctions Mr. David Egiashvili, WB Consultant Mr. Igor Popiv, WB Consultant Wednesday, June 22, 2011, 9:45 10:30 Tashkent City Municipality (Khokimyat) Mr. F. Ziyaev, Deputy Major City Tashkent Mr. Igor Popiv, WB Consultant Wednesday June 22, 2011, 11:00 13:00 Tashkent Land Use and Real Estate Cadastre Service (Cadastre and Registration Service) Mr. Gayrat Rasulov, Chief State Enterprise Land Use and Real Estate Cadastre Service city Tashkent Mr. Rasul Khakimbekov, Chief Registrar c. Tashkent Land Use and Real Estate Cadastre Service Mr. Timur Salikhov, System Administrator the Service Mr. Igor Popiv, WB Consultant Wednesday, June 22, 2011, 16:00 18:30 The WB Country Office in Uzbekistan Mr. Emanuel Salinas, Sector Coordinator for Central Asia Mr. Arif Nasibov, IFC Coordinator ACAF Mr. Michael DeLint, WB Consultant Igor Popiv & David Egiashvili, World Bank Group Page 76 84
Date and Time Place Attendees Mr. David Egiashvili, WB Consultant Mr. Igor Popiv, WB Consultant Thursday, June 23, 2011, 10:00 16:00 Tashkent Oblast Land Use and Real Estate Cadastre Service (Cadastre and Registration Service) and Zamgiote rayon Service Mr. Nazarov, Registrar the Tashkent oblast Land Use and Real Estate Cadastre Service Mr. Anvar Kadimov, Chief Department; Mr. Shokhimargon Jumanazarov, Chief registry fice; Mr. Murogkhagta Ganikhogmaev, Chief engineer; Mr. Ratab Kuriazov; Mr. David Egiashvili, WB Consultant Mr. Igor Popiv, WB Consultant Friday, June 24, 2011, 10:00 11:30 Private surveying company BRIGS Mr. Sergey Girgoryev, Director Mr. David Egiashvili, WB Consultant Mr. Igor Popiv, WB Consultant Monday, June 27, 2011, 10:00 11:00 Commercial Bank Hypothec Bank Mrs. Liliya Khodjaniyazova, Head the Hypothecs and Credits Department Mr. Jakhongir Mirzaev, Head Investment project financing and monitoring department; Mr. Shavkat Ziyaev, Head department for lending economic sphere; Mr. David Egiashvili, WB Consultant Mr. Igor Popiv, WB Consultant Monday, Departments Mr. A. Samborsky, Deputy Director General Igor Popiv & David Egiashvili, World Bank Group Page 77 84
Date and Time Place Attendees June 27, 2011, 11:30 13:30 Goskomzemgeodezcadastr e National Centre Geodesy and Cartography Mr. D. Aymatov, Head Department Land Use and State Cadastre Mr. M. Mamaranyanov, Director GUP Geoinformcadastre Mr. R. Ilkhomdjanov, Chief engineer Main Scientific-Production Institute (GNPI) «Uzdaverloyikha» (former Giprozem ) David Egiashvili, WB Consultant Igor Popiv, WB Consultant Monday, June 27, 2011, 17:00 19:00 Real Estate Agency Lebed Capital Invest Mr. D. Lebed, Director Lebed Capital Invest Mrs. Valentina D. Dmitriyeva, Director Real Estate Company Farif Mr.R. Nadjimov, Director Real Estate Company Pod Klyuch Mr. David Egiashvili, WB Consultant Mr. Igor Popiv, WB Consultant Tuesday, June 28, 2011, 14:00 16:30 The WB Country Office in Uzbekistan Mr. K. Mirkasymov, Director Realtors Working Group Mr. T. Norov, Progress-Development Ltd. Mr. Batir Gakulov, Director Real Estate Company Mr. Kasimov, Director Real Estate Company; Alexsey Ershov, Director Real Estate Company Zolotoi Kluch ; Maskat Abdusagatov, director Construction Igor Popiv & David Egiashvili, World Bank Group Page 78 84
Date and Time Place Attendees Company Mr. David Egiashvili, WB Consultant Mr. Igor Popiv, WB Consultant Wednesday, June 29, 2011, 9:30 12:30 State Committee the Republic Uzbekistan on Land Resources, Geodesy, Cartography and State Cadastre Mr. Tulqin M. Abdullaev, First Deputy Chairman Mr. Bakhriddin B. Isametdinov, Head the State Cadastre Department Mr. Avaz Kh. Alimov, Head the Land Use and Land Administration Department Mr. A. Samborsky, Deputy Director General National Centre Geodesy and Cartography Mr. Khasan N. Magdiev, Chief Engineer National Centre Geodesy and Cartography Mr. Rasul Khakimbekov, Chief Registrar c. Tahskent Land Use and Real Estate Cadastre Service Mr. Bobmurod Yu. Makhsudov, Head Information-Analytical Center registration and real estate cadastre system National Centre Geodesy and Cartography Mr. Nodir Mirzayev, Chief Specialist Information-Analytical Center registration and real estate cadastre system National Centre Geodesy and Cartography Mr. David Egiashvili, WB Consultant Mr. Igor Popiv, WB Consultant Thursday, June 30, 2011, 10:00 12:30 Ministry Economy the Republic Uzbekistan Mr. Ravshan A. Gulyamov, Minister Ministry Economy Mr. Shukrat Ya. Ismailov, Head Main Igor Popiv & David Egiashvili, World Bank Group Page 79 84
Date and Time Place Attendees Department Macroeconomical Analysis and Forecasting Mr. Mirchamid O. Turayev, Head Department Construction Industry and Construction Complex Development Mr. Sh. Suyundikov, Executive Head Department Cooperation with International Financial Institutions Mr. D. Abduazizov, Deputy Head Department on Generalizing Valuation Indicators and Preparation Economic Review Mr. B. Usmonov, Chief Specialist Department Forecasting and Macroeconomic Parameters Monitoring Mr. U. Suvankulov, Lead Specialist the Department on Generalizing Valuation Indicators and Preparation Economic Review Mr. Zafar Khashimov, IFC Country Officer Mr. Arif Nasibov, IFC Coordinator ACAF Mr. Michael DeLint, WB Consultant Mr. David Egiashvili, WB Consultant Mr. Igor Popiv, WB Consultant Thursday, June 30, 2011, 14:30 15:45 Communications and Information Agency Uzbekistan Mr. Sanjar Alimov, Head International Relations Coordinator Department Mr. Bakhtiyer Adburasulov, Director Business Management Center UzNet Stock Company Uzbektelecom Mr. Olimjon Umarov, Head GOV.UZ Group UZINFOCOM Igor Popiv & David Egiashvili, World Bank Group Page 80 84
Date and Time Place Attendees Mr. David Egiashvili, WB Consultant Mr. Igor Popiv, WB Consultant Business cards collected during the meetings are given below: Igor Popiv & David Egiashvili, World Bank Group Page 81 84
Igor Popiv & David Egiashvili, World Bank Group Page 82 84
Igor Popiv & David Egiashvili, World Bank Group Page 83 84