Reform update: cadastre reform

For a country to attract investment, one of the key issues is clarity over the ownership and legality of real estate. 

After purchasing land, to build a factory you need a building permit. But not long ago, Serbia was bottom of the class for this. We were more successful in issuing building  permits only than Eritrea and countries ravaged by war. 

Together with Minister of Construction Zorana Mihajlović, NALED took the initiative to draft a comprehensive reform. 

We reviewed the experience of other countries and prepared a new law with dozens of regulations, rulebooks and instructions. NALED also secured strong donor support from USAID and GIZ to develop the necessary software and training.

The number of procedures was cut by one third; the number of days to obtain approval was cut by 60%, and the financial burden was reduced to just 6% of the previous cost. 

In only five years, Serbia reached ninth position in the world for the efficiency of issuing building permits.  Today, Serbian municipalities resolve more than 100,000 construction requests every year.

This success opened the door to the next step: reform of property registration in the cadastre. We weren't exactly brilliant here either. Ten years ago we ranked 115th in the world. 

Same recipe, same team: this time with the support of the UK's Good Governance Fund.

The solution: eCounter: a one-stop shop designed to connect institutions. Now, the public no longer has direct contact with the cadastre, but submit their documents electronically through the public notary.

Serbia now ranks 58th in the world in the efficiency of cadastre registration. The time it takes has been reduced by two thirds while the costs have been halved. 

The next issue we want to tackle is spatial planning. Planning procedures should take from 6 to 12 months, but in practice they take years due to lack of coordination between the various authorities. 

The solution is eSpace, an electronic system to speed up spatial planning. Through this digital platform, institutions will be able to work simultaneously, instead of waiting for each other.

Resolving legal and ownership issues over land is one of NALED's strategic priorities. There are thousands of acres of construction land unused, stuck in the system. Why?

Paradoxically in Serbia, there are two types of land ownership: one is the so-called ’right of use’, which does not give the right to use the land for construction purposes even when this is designated in the local plan. The second is full ownership, which does. And a state asks a hefty parafiscal charge to convert one to the other.

Many owners are unable or unwilling to pay this, and so the land remains unused. The result for society is lost investment and lost jobs. For the state, the result is loss of the revenue associated with this.   

We want anyone who holds the ’right of use’ of land to automatically gain full rights. Conversion and registration should be free of charge. 

Finally, we should solve the problem of the slow registration of the many illegal buildings. Legalisation could be accelerated by digitalizing procedures, reducing their number, setting deadlines with the principle of silence indicating consent, and creating incentives by cutting fees. 

Three years of free registration would bring the cadastre substantially up-to-date.

That would close the circle from the ground to the roof. Now, that would be success.