Commercial Legal And Institutional Reform (CLIR) - Economic Growth

COMMERCIAL LEGAL AND INSTITUTIONAL REFORM
Diagnostic Assessment Report for the Republic of Bulgaria March 2002
Moreover, real estate agents in one part of the country do not have information about real
estate available in another region. This poses difficulties to the many people who have
been restituted land in areas far from where they live and need information for markets in
those areas.
Where farmers’ groups exist and especially where they are part of a credit cooperative,
farmers are generally in a better market environment. Farmers’ associations are needed
that will lobby for and protect members, exchange price information on land and
agricultural products, and provide information and legal assistance to members. Small
rural farmers are vulnerable, especially in industries such as dairy, where food safety
standards make it difficult to continue operating as in the past.
MARKET FOR REFORM
Private ownership of land in Bulgaria is no longer a debated topic. It has been fully
accepted by the government and the people that private ownership of land is positive and
desirable. Professional associations and trade and special interest groups provide input
and feedback on real property issues and have access to policy and lawmakers. The
mechanism is not necessarily formalized, but functions. While laws and regulations are
readily available in Sofia, they are less available in rural areas, and rural residents are less
likely to be engaged in the legislative process.
A major area of need is in public information about the laws. The restitution law and its
amendments, regulations, and interpretive decisions are incomprehensible to many
landowners and heirs because of frequent changes to rectify earlier mistakes. Few people
fully understand their restitution rights. Notwithstanding efforts by the Ministry of
Agriculture to disseminate public information on the restitution process, our recent
fieldwork indicated that most bankers, lawyers, real estate brokers, and other market
participants did not have sufficient confidence in title to restituted agricultural land to
engage in transactions. These people did not know that the restitution process had been
completed with respect to agricultural land. Nor did they understand the limitation in
remedies that makes title to land division parcels virtually immune from future claims or
appeals.
Although a public information campaign will not bring about large numbers of land
transactions, a widespread effort to assure people that title to restituted land is secure
would stimulate markets.
In addition to public information, legal aid services are needed in the rural communities.
Land disputes and land misunderstandings will only increase as the land market opens up
and the land tax is imposed. Rural user groups do not regularly participate in the
legislative process. Many individuals do travel to Sofia to sit in the Ministry of
Agriculture with their complaints and concerns. Farmers need information to be
productive and to make wise decisions regarding their land.
Booz Allen Hamilton
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