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New cadastral law a grudging concession to demand for speed

"It's hard. We lack people. There are only 37 employees here, the same as in 1993, but since then the number of requests that we have to deal with has doubled, and we now have over 5,000 that haven't been handled within the period set by law," says Vladimír Banák, the head of the district cadastral office in Trenčín.
Banák's problem is one common to district cadastral offices across Slovakia, where state officials store, verify and approve documents that register title to real estate in the country.
For workers like Banák, the labour shortage has made it impossible to meet demand for changes to be registered in title to land and buildings. But for the investment hungry Slovak government, the delays at cadastral offices mean they can lose investors - something the cabinet can't afford if it is to fulfil its aim of besting the $2 billion total in direct foreign investment the country attracted last year.

"It's hard. We lack people. There are only 37 employees here, the same as in 1993, but since then the number of requests that we have to deal with has doubled, and we now have over 5,000 that haven't been handled within the period set by law," says Vladimír Banák, the head of the district cadastral office in Trenčín.

Banák's problem is one common to district cadastral offices across Slovakia, where state officials store, verify and approve documents that register title to real estate in the country.

For workers like Banák, the labour shortage has made it impossible to meet demand for changes to be registered in title to land and buildings. But for the investment hungry Slovak government, the delays at cadastral offices mean they can lose investors - something the cabinet can't afford if it is to fulfil its aim of besting the $2 billion total in direct foreign investment the country attracted last year.

First ports of call

Cadastral offices are crucial for foreign investors because they confer legal title and ownership rights on purchased property, allowing firms to begin the investment process. Investments do not begin until requests to buy and build on land are registered at and approved by a local cadastral office.

But delays in processing the requests make life difficult for impatient investors, some of whom have turned their backs on Slovakia in frustration at the bureaucracy involved in setting up operations, including dealing with cadastral offices.

"It's not acceptable to have delays [at cadastral offices]. It often causes a lot of trouble for investors," said Michel Lacombe, head of French investment and advisory firm Artem.

Lacombe's firm last year was instrumental in securing title to almost 400 individually-owned plots of land sought for a factory site by French auto parts manufacturer Plastic Omnium.

But the problems with processing land registrations and ownership documents may soon be eased following an amendment to legislation on cadastral offices passed by parliament May 18, and which will come into effect in January next year.

At present, cadastral offices are required to register any changes in property ownership rights within 30 days of an application's being filed. But because of chronic staff shortages, in many regions the process takes several months, and sometimes even more than a year (see chart, page BF VIII).

Under the new legislation, though, eight regional and 79 district cadastral offices will be created, independent of the country's local state administration which currently controls financing for the offices; employees can also be moved to offices where extra workers are most needed.

For example, in western Slovakia's Trenčín district, the cadastral office has failed to register 5,492 requests within the 30 day period. Meanwhile in Považská Bystrica, 45 kilometres north of Trenčín, the cadastral office has failed to meet the deadline with only 43 requests.

Under the current structure, officials at cadastral offices are employed by district offices, and cannot move about within the region.

Cadastral officials have been cautiously welcoming of the change. "Although the legislation doesn't solve our main problem - the lack of labour - it partially solves the problem with delays by allowing us to transfer employees within a region, which is at least something," said Matej Bada, head of the cadastral department at the state-run Geodesy, Cartography, and Cadaster Directorate.

Lawyers working with cadastral offices on investment are pleased the government has brought in new legislation, even though they agree it is not a solution in itself to the delays.

"The law changes don't mean much as they are, but the opportunity to transfer people is a good one and worth trying. It can help somehow, but won't definitively solve the problem with delays," said Patrik Bolf, attorney with law firm Bolf Németh & Szabová.

More than 2000 people are employed at cadastral offices throughout Slovakia, but that number needs to increase by 250 just to start clearing the backlog of requests, Bada says.

His office has repeatedly asked the government to send extra workers, but Bada says he has never received a reply to any of his requests. "Yes, this [labour transfer] is good, but we still need more skilled employees," Bada said. "They [the government] should realise that all investments and privatisations need our stamp, which reflects our importance."

Despite the government's reluctance to provide cadastral offices with more employees, some cabinet ministers seemed to have heeded the warnings of investors and legal advisors like Bolf, who say that cadastral registrations must be quickened to accommodate the demands of companies wanting to put their money in Slovakia.

Last year, Deputy Prime Minister for Economy Ivan Mikloš proposed a scheme whereby firms paying a special fee to get ownership documents through a 'fast track' cadastre process, would have documents processed within a couple of days in some cases. The idea was not only to speed the process, but also to eliminate opportunities for corruption - many applicants have reported that by bribing cadastral officials they can jump the queue. According to Mikloš, the special fee would have seen 'premiums' for quick service flowing into state coffers rather than bureaucrats' pockets.

However, the initiative went no further than the lips of the deputy PM. Overwhelmed by the already huge backlog of requests they had, officials at the cadastral offices vetoed the idea, fearing a massive demand from investors for quick processing of documents that they just couldn't meet.

"It's a good idea, but only if cadastral offices aren't as inundated with requests. Unfortunately this isn't the case," said Bada.

Foreign investors remain frustrated though. Without official documents from cadastral authorities, investors cannot get loans from local banks, forcing them to rent land rather than buy it, and destroying business plans, argues Lacombe. For some investors this has already been too much.

"I know three investors who, based on delays at cadastral offices, instead of purchasing land had to rent it," he says.

According to Bolf, unless cadastral offices solve their problems, more investors may take their business elsewhere. "The efficient functioning of cadastral offices is a necessity. Procedures should be accelerated. Investors shouldn't have to reconsider their plans because of long registration periods," he said.

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