Registering Property Using information to curb corruption - Doing Business
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Doing Business 2018
Registering
Property
Using information to curb corruption
Transparency is a key element of the quality of land administration systems. Transparency of information provided
Transparency eliminates asymmetrical information between users and officials by land administration systems can
with respect to services provided by the land administration, thereby increasing reduce transaction costs and facilitate
the efficiency of the real estate market. Transparent systems also strengthen investment in immovable property.
public confidence in governments and facilitate substantial reductions in the cost
In economies where information
of doing business.
on fee schedules and documentary
requirements is easily available,
the process of completing property
In 2013 Transparency International As a component of its registering
transfers tends to be more efficient.
reported that one in five users of land property indicator set, Doing Business
services globally claimed to have paid a has measured the transparency of land Since 2013, 25 economies have
bribe for services such as registering a administration systems for the past four become more transparent by launching
land title or obtaining updated property years.3 This research has focused on websites, publishing fee schedules,
ownership information. The prevalence whether information concerning the own- setting time limits and implementing
of bribery in the land sector creates ership and physical location of a property specific complaint mechanisms.
a substantial informal cost for those is public, whether essential information
trying to register or transfer land. For on the property transfer process is made In 51 economies, the only way to
obtain information about documentary
those unable to afford illegal payments, accessible, if there is an independent
requirements for property registration
it can also reduce access to land admin- and specific complaint mechanism to
is by having an in-person interaction
istration services, hindering property respond to issues raised by land registry
with a public official.
registration and increasing land tenure users and whether statistics on property
informality. In addition to bribes, cor- transfers in the largest business city of an Property-specific and independent
ruption can take the form of land record economy are published.4 complaint mechanisms are not
fraud or alteration, land document forg- common around the globe, indicating
ery and multiple allocations of the same Since 2013, 25 economies have improved an area for improvement to increase
plot of land. Officials may also leverage transparency by launching websites, transparency.
their position to benefit from parties publishing fee schedules, setting time
with an interest in acquiring, disposing limits and implementing specific com- A transparent land administration
of and developing land.1 plaint mechanisms. Senegal introduced system reduces opportunities for
a comprehensive website for its land corruption.
Integral components of a transparent administration system, which includes a
and efficient land administration system list of procedures, required documents,
include easy access to clear and credible service standards and official fees to
information on property ownership, open complete any property transaction.5
public access to information on proce- Similarly, Qatar and Guyana have
dures and fees for public services as well as increased transparency in their land
active public dissemination of regulations administration systems by expanding
affecting land rights. These measures can web-based land administration portals
reduce corruption and increase account- to include dedicated and comprehensive
ability of land administration authorities.2 sections on the services provided.6, 752 DOING BUSINESS 2018
The documentary requirements for land transfer of ownership—should be clearly
ACCESS TO INFORMATION registration should also be made available specified, including the timeframes for
DURING DUE DILIGENCE to the public. Parties involved in a property their completion. This allows the public
transaction can streamline their interac- to know beforehand what level of service
Information on the property, the parties tions with the agency in charge of prop- they can expect to receive, how much
and the transfer process is fundamental erty registration if they know beforehand it will cost and how long it will take.
for a property transaction to occur. what documents they will be required Moreover, by providing clear public guide-
Buyers and sellers will only be able to to submit. This greatly reduces the risk lines, governments set the standard for
make informed decisions when this infor- of unforeseen delays or obstacles to accountability of services offered by their
mation is widely available, either at a low submitting a property transfer—including land administration systems. Land registry
cost or free of charge. The parties should the incidence of informal payments. services that lack established timeframes
know the costs, required documents and When the list of required documents for completion can foster corruption in the
the expected duration of the transfer pro- is public and complete, for example, form of bribes. An official might purposely
cess before the transaction takes place. the likelihood that the parties would be delay registration, for example, to encour-
Although these conditions are necessary requested to come back with additional age clients to make facilitation payments
for a sound land administration, whether documents is reduced, expediting the to accelerate the process. Furthermore, in
an agency can deliver its services with registration process. the absence of enforced time limits, land
efficiency and accountability depends on registry users are unable to monitor the
other variables such as the capacity and Transparency of documentary require- status of their transactions.
reliability of its infrastructure. ments may also simplify a transaction by
potentially reducing the need to resort Service standards at land registries are
Around the world, 158 economies publish to third-party professionals to prepare a rare. Land registry users are not aware
fee schedules for services offered at the property transfer application (figure 6.1). In of any specific time limits promulgated
land registry. If a fee schedule is public, 51 economies, the only way to obtain infor- by law in 122 economies covered by
it is also likely to be available online. In mation about documentary requirements Doing Business. In addition, economies
131 economies, this information can be for property registration is by having an that do not establish service standards,
accessed through a dedicated website. in-person interaction with a public official. such as specific time limits, tend to com-
Although the use of online platforms is In Zambia, for example, where the list of plete property transfers less efficiently
common in high-income economies— required documents is not publicly avail- (figure 6.2).
where 80% publish fees on websites— able, a lawyer is hired to complete most of
only a third of low-income economies have the property transfer steps for a commer- The Land Revenues Office charter,
such portals. One example is Zimbabwe. cial warehouse, costing an entrepreneur an published in June 2013 by Nepal’s
In 2016, the economy launched an official additional 2.5% of the property value. Department of Land Reform and
website that includes a list of documents Management, provides a good example
and fees required to complete a land To promote full transparency, in addi- of how to set effective time limits. The
transaction, as well as a specific time tion to document and fee schedules, all charter contains a comprehensive list of
frame for delivering legally-binding docu- services provided by land registries—such services provided by the Land Revenue
ments proving property ownership. as title search, ownership certificate or Office, the list of documents needed to
FIGURE 6.1 Transparency in land systems can bring efficiency gains
Average cost to transfer property (% of property value) Average time to transfer property (days)
8 100
7
80
6
5 60
4
3 40
2
20
1
0 0
Documentary requirements Documentary requirements Documentary requirements Documentary requirements
not publicly available publicly available not publicly available publicly available
Source: Doing Business database.REGISTERING PROPERTY 53
FIGURE 6.2 Economies that publish effective time limits tend to be more efficient in kept in the land registry. In those econo-
completing property transfers mies, parties must hire an authorized pro-
fessional to obtain ownership information,
Average time to complete property transfer (days)
making the process more burdensome.
70
In both cases, the agency in charge of
60 registering immovable property can reject
applications to access and retrieve owner-
50
ship information on a discretionary basis.
40 Public access should be embedded in land
30
administration systems.
20 Among the economies covered by Doing
10 Business, more than 70% of upper-middle
-income and high-income economies
0
make information on property ownership
Economies without service standards Economies with service standards
available to the public, whether for a nomi-
nal fee or free of charge. By contrast, only
Source: Doing Business database. 50% of low-income economies open their
records on land ownership to the public.
complete each service, the applicable its owners or creditors—helps to elimi- Globally, information about land owner-
fees and the effective deadline within nate uncertainty over property rights ship is restricted to intermediaries and
which the agency commits to deliver spe- or obligations that may encumber the interested parties in 31% of economies.
cific services. Similarly, the government property. In the absence of any public In 27 out of 190 economies—including
of Thailand established a one-day service records or any related rights to a prop- Chile, Poland and the United States—this
standard to register property transac- erty, the transaction costs can become information is freely available (figure 6.3).
tions. To comply with this commitment, overwhelming, risking that ownership
the number of staff is determined based becomes untraceable. Because cadastral maps do not usually
on the average number of transactions, contain any personal information about
preventing delays.8 In 127 of the 190 economies covered by the property owner, privacy concerns do
Doing Business, the information recorded not typically impact mapping agencies.
by the land registry is openly available to However, the number of economies
ACCESS TO INFORMATION the public. In the remaining economies, offering open access to maps is similar to
DURING A PROPERTY mainly because of privacy concerns, only the ones with open ownership informa-
TRANSACTION owners or third parties who prove legiti- tion.10 Overall, among the economies
mate interest can access the information covered by Doing Business, 33% do not
Land administration is defined by the
United Nations Economic Commission
FIGURE 6.3 Citizens in low-income economies have limited access to land
for Europe (UNECE) as “the processes of
ownership information
determining, recording and disseminat-
ing information about the ownership, Share of economies by type of access to land records (%)
value and use of land when implementing 60
land management policies.”9 One of the 50
major roles of a land registry is to make
40
land transactions public. By doing so,
it safeguards the interests of all parties 30
involved in sales or leases. 20
10
When parties engage in a prop-
erty transaction, it is essential that 0
Anyone who pays Freely accessible Only intermediaries Records not publicly
they obtain legally reliable information official fee to public and interested parties available
regarding the actual property involved Low income Lower middle income Upper middle income High income
in the transaction. The availability of
information on the property—as well as Source: Doing Business database.54 DOING BUSINESS 2018
make information on land boundaries (figure 6.4). Globally, 22 economies offer Ombudsman, an official responsible for
publicly available. Sweden, on the other complaint mechanisms in their cadastre following up on all complaints, whose duty
hand, has an online system allowing or mapping agency. Doing Business data is to report to the lands ministry as well as
anyone to freely access property owner- suggest that this is one of the areas the client within 30 days.
ship information and maps dating back with the most room for improvement
400 years.11 worldwide. Governments can keep their stakeholders
engaged by collecting and publishing sta-
An independent and specific complaint tistics on land transactions. Transaction
ACCESS TO INFORMATION mechanism is important in the fight statistics benefit regulators as well as the
AFTER COMPLETION OF A against corruption. A study by Transparency real estate sector, serving as a data analy-
PROPERTY TRANSACTION International conducted in Burundi, Kenya, sis tool for policy makers to monitor the
Rwanda, Tanzania and Uganda found that real estate market. Currently, 122 econo-
After property transactions are com- about 90% of respondents that encoun- mies covered by Doing Business publish
pleted, it is important to provide citizens tered a bribery incident did not report it statistics on land transactions. In Japan,
with a safe environment where they or make a complaint to any authority or for example, data on land transactions are
can register complaints. Unlike courts, official; the reasons differed from econ- published monthly at the municipal level.
an informal structure allows users to omy to economy. In Kenya, most of the In the United Arab Emirates, numbers on
be more forthcoming about possible respondents indicated that they did not land transactions in Dubai are compiled
abuses, relieving the courts of additional know where to report the incident, while daily and published on the land registry’s
cases. In addition to allowing citizens in Tanzania most felt that no action would web portal.
to contribute to a better business envi- be taken to resolve their complaint.13
ronment, an independent and specific As of June 2017 it was possible to file a
mechanism for filing complaints would complaint online in only 19 economies REDUCING OPPORTUNITIES
also help governments to track issues covered by Doing Business. The Singapore FOR CORRUPTION THROUGH
and respond accordingly.12 Land Authority recently introduced a web TRANSPARENCY
portal to file complaints about any issues
Such complaint mechanisms promote related to their services. The Swedish Transparency in a land administration
three desired outcomes. First, the rights Land and Cadastral Authority introduced system provides a defense against
of citizens are safeguarded against any a new mechanism for filing complaints bribes intended to expedite the process
sub-standard service—whether by mis- regarding errors identified on maps of land of registering property, changing a title,
take or fault—provided by the land reg- plots.14 Similarly, Guatemala and Vanuatu acquiring information on land or pro-
istry. Consequently, citizens can expect have successfully implemented alternative cessing cadastral surveys. Corruption in
the land registry to provide services in offline solutions. In Guatemala, an agency land administration can result in fraudu-
accordance with the applicable rules and within the public ministry investigates lent land transfers, undermine public
service guidelines. Second, citizens can claims related to the land registry. In confidence in existing land rights while
have more confidence in a land tenure 2014 Vanuatu appointed the first Land’s reducing investment and formal land
governance system where information
is transparent and the officials providing
land transfer services are held account- FIGURE 6.4 Most economies do not provide an independent and specific complaint
able for their actions. Third, candid feed- mechanism for land registry issues
back can help improve the administrative
Share of economies with land registry complaint mechanism (%)
tasks performed by the land registry, 25
resulting in a higher quality of service.
20
Only 24 economies measured by Doing
15
Business have established complaint
mechanisms that improve the overall 10
quality of land registries; half of these
5
(12) are OECD high-income economies
or East Asia and the Pacific economies. 0
Such complaint mechanisms are not in East Asia OECD high Latin America Europe & Sub-Saharan Middle East South Asia
& Pacific income & Caribbean Central Asia Africa & North Africa
place in any of the economies of South
Asia or the Middle East and North Africa
Source: Doing Business database.REGISTERING PROPERTY 55
registration.15 Such corrupt behaviors FIGURE 6.5 A more transparent land administration system is associated with a
spur inefficient land ownership, with lower incidence of bribery at the land registry
land being owned by those most able to
Reported incidence of bribery at land registry (%)
participate in corrupt activities.16
30
Furthermore, corruption and abuse of 25
power can hinder the development of the 20
real estate market. It can have adverse 15
consequences on the business climate
10
and economic activities by increasing the
costs of doing business, thus undermin- 5
ing private sector confidence. High costs, 0
together with inefficient procedures 0–0.9 1–1.9 2–2.9 3–3.9 4–4.9 5–6
Score on transparency of information index (0–6)
discourage people from registering land
transactions, steering them instead into Sources: Doing Business database; Transparency International data (https://www.transparency.org/gcb2013).
Note: The analysis is based on data collected for the 95 economies covered in 2013/14 by both Doing Business
the informal land market. Corruption and Transparency International’s Global Corruption Barometer 2013. The relationship is significant at the 1% level
in land management can have a direct after controlling for income per capita.
negative impact on business operations.
confidence in them. Having well-defined 12. The registering property indicator set only
considers dispute resolution mechanisms that
To be successfully deployed, full-fledged rules and standards—in addition to a safe
(i) have been designed specifically to cover
land reforms are time-consuming, costly, environment to censure wrongdoing—is the services provided by the agency in charge
demanding an immense effort from gov- essential to ensure quality and efficiency of land registration and (ii) are managed by
a body that is independent from the agency
ernments and stakeholders. But a trans- in the administration of land tenure rights.
in charge. These requirements are essential
parent land administration system—one in constituting an efficient, fair and legitimate
in which all land-related information is governance system over land tenure rights.
13. Transparency International 2014.
publicly available, all procedures regarding NOTES 14. For more on Sweden’s mechanism for filing
property transactions are clearly docu- complaints regarding errors identified on maps
mented and information on fees for public This case study was written by Yuriy Valentinovich of land plots, see http://www.sla.gov.sg/.
Avramov, Albert Nogués i Comas, Laura Diniz, 15. Transparency International 2013.
services is easy to access—minimizes
Brendan Meighan, Esperanza Pastor Nunes and 16. Søreide and Williams 2014.
the opportunities for informal payments Geyi Zheng. 17. Peisakhin 2012; Rose-Ackerman 2004.
and abuses of the system. Indeed, cross- 1. Kakai 2012; Obala and Mattingly 2014.
country data show that the greater the 2. Zakout, Wehrmann and Törhönen 2006.
quality and transparency of a land admin- 3. For more information on the transparency of
information index, see the data notes available
istration system, the lower the incidence at http://www.doingbusiness.org.
of bribery at the land registry (figure 6.5). 4. In 11 economies with a population of more
than 100 million as of 2013, Doing Business
also collects data for the second largest
business city.
CONCLUSION 5. For more on Senegal’s land administration
system, see http://www.impotsetdomaines
.gouv.sn/fr/demarches-affaires-domaniales
Transparency is one of the most impor- -cadastres.
tant tools for combating corruption—it is 6. For more on Qatar’s web portal, see https://
the basic pillar of enhancing the quality sak.gov.qa/.
7. For more on Guyana’s efforts to increase
of land administration.17 Moreover, rather transparency in land administration, see
than serving as a complementary tool, http://minbusiness.gov.gy/doing-business/3
transparency should be considered as -how-to-get-property/.
8. Zakout, Wehrmann and Törhönen 2006.
a key component when designing land 9. UNECE 1996.
policies. It is crucial that citizens have 10. According to Doing Business data, 129
complete access to official land informa- economies provide for open access to maps
recorded at the agency in charge of surveying
tion, regulations and applicable fees. By privately held land plots, while 127 economies
establishing mechanisms that shield provide for open access to ownership
citizens from informal payments or other information recorded at the land registry.
11. For more information on Sweden’s mapping,
abuses, governments not only strengthen cadastral and land registration authority, see
institutions but also increase the public’s http://www.lantmateriet.se.You can also read
