BUYING and selling real estate could become easier for both foreigners and Slovaks following cabinet approval of a measure to reform land registry offices.
The cabinet on May 22 approved an extra Sk19 million ($400,000) in funding for cadastral (land registry) offices to allow them to take on more employees or pay overtime to clear backlogs of requests for changes to ownership documents.
The government also approved the creation of an Internet-accessible database of real estate owners to increase transparency and reduce the number of cadastral visitors requesting only information.
The changes were suggested by the office of Deputy Prime Minister for Economy Ivan Mikloš, which explained they would promote growth in the real estate market and construction sector.
"An efficient real estate market needs a functional system of real estate ownership registration. Real estate cadastral offices in the Slovak Republic are not functional in a significant number of [79 total] districts, which is proven by the unacceptable waiting period in processing applications," reads a Government Office press release.
Cadastral offices are crucial to real estate market transactions because they confer legal title to purchased property. For investors, the investment process cannot begin until land and building deals are registered at and approved by a local cadastral office.
In Slovakia, however, many cadastral offices are unable to register changes within the 30-day limit set by the law, resulting in long delays that hold up purchase deals and invite bribery of overworked officials.
According to a government document explaining the new changes: "In mid-2000, of 79 district offices, only 31 kept the legal period. In 25 districts, citizens waited six to nine months for a decision on registry, while in approximately 10 districts, the period exceeded 10 months; in one case it took more than two years."
"The problem in the past was that if you applied for buying something and changing the ownership, sometimes it took several years," said Laurie Farmer, managing director of the Spiller-Farmer real estate consultancy which advises many investors on property matters.
"Obviously, if you have regular use of the cadastry like we do, it doesn't take that long because you build up certain relationships. But for people who would be buying apartments, etc, and are doing one deal in their lives, maybe it takes a long, long time," said Farmer.
The structure of cadastral offices was changed as of January 1, 2002, creating eight new regional offices in addition to the 79 district sites, and allowing officials to move between offices in answer to labour shortages. However, those changes were only cautiously welcomed by cadastral officials, who said the main problem - a lack of labour and funding - remained unaddressed.
The lengthy registration process in cadastral offices has also been a source of corruption, said sociologist Michal Ivantyšyn, a former member of the Government Office's anti-corruption task force.
"When we did a deep analysis of why cadasters are a source of corruption, we found that the main reason is that they are slow," he said, adding that his research had shown that every seventh visitor to cadastral offices had paid a bribe.
As part of Slovakia's ongoing efforts to improve transparency and reduce corruption, the government also plans to put cadastry information online, similar to the online business register.
The move, which would draw on 150,000 euro in funding from the EU's Phare programme, has been welcomed by real estate players.
"It would give you current information on who owns what property, which would be very useful for us as an agency, instead of having to visit the cadastry continually to find out who owns what," said Farmer.
"But just as obviously, it also makes it easier to find out what certain people own. There is an argument right now about certain politicians owning certain property.
"That would obviously be cleared up in one go if they had [the registry online], because anyone would be able to find out - it would be public knowledge rather than just for the local authorities to have access to," he said.