Business Removing

36 DOING BUSINESS IN 2005
FIGURE 5.2
Registering property is complex in Uzbekistan
Days
100
75
50
25
0
1
Procedures
12
Source: Doing Business database.
Cost
Time
Percentage of property value
13
12
11
10
9
FIGURE 5.3
Harder to register in poor countries
Time and cost to register property
133
116
Days
62
51
54
56
34
Source: Doing Business database.
OECD
High income
East Asia &
the Pacific
Middle East &
North Africa
South
Asia
Latin America &
the Caribbean
Europe &
Central Asia
Sub-Saharan
Africa
Percentage of property value
3.2
4.2
4.8
5.6
6.8
6.1
14.4
Inspections of the property slow the transfer of title
in 30 countries, none rich, including Bangladesh, Bolivia,
the Republic of Congo, Egypt, Ethiopia, Jordan and
Malaysia. Uzbekistan has 2, compounding an already
complex procedure (figure 5.2). Both inspections are to
verify the property’s borders. The first double-checks the
official cadastre records. The second triple-checks it.
Both times, every neighbor must sign and seal the inspection.
Such complexity increases the likelihood that
bribes may change hands.
Another large bottleneck, especially in Africa, is the
requirement for government consent before property is
transferred. It causes delays, usually requires an exorbitant
fee and can be a major source of corruption.
Lesotho, Malawi, Nigeria, Rwanda, Senegal and Zambia
all have consent requirements. This is not always a relic
of colonial days. Nigeria’s came with the Land Use Act
of 1978. It was adopted to reduce conflict, but added a
6-month delay and a 10% fee.
The effect of such obstacles is evident across countries.
Registering property is almost twice as efficient in
rich countries as in poor ones (figure 5.3). Across regions,
OECD and East Asian countries have the most efficient
registration, averaging about 40 days and costing
less than 5% of the property value. It is most difficult in
Sub-Saharan Africa, where it takes more than 100 days
and with costs of over 14%. Latin American countries
typically require many procedures, including more due
diligence, and take longer than average. Most countries
in Eastern Europe and Central Asia have low costs—
3.2% on average, with 6 countries at less than 1%. But in
almost all, the seller will also need to pay value added
tax. And low costs in Azerbaijan, Belarus, Moldova,
Poland and Slovenia are offset by long delays.
What else secures property rights?
Doing Business in 2005 presents measures of the efficiency
of registering property. But many other factors
help secure property rights. Among these are the organization
of the registry, the legal rights that come with
ownership and the controls on property markets. Property
lawyers and property registries provided detailed information
on each of these areas. Several examples highlight
how they matter.
Organization of the registry and cadastre
Property registries record legal ownership, and the cadastre
records physical characteristics and identifies boundaries.
In the Netherlands all properties are recorded in the
registry and cadastre, with the two unified to avoid conflicting
records. Registry information can be accessed online
without restriction. In Costa Rica about 1.2 million
properties are registered, but almost 1.7 million plots are
supposedly recorded in the cadastre. The total area of all
registered properties exceeds the area of the country by
6% (figure 5.4). Evidently, some records are duplicates or
contradictory. Although it takes only 21 days and 3.6% to
register transfers, the value of title is questionable as a result.
Burundi has the opposite problem—how to verify
who owns what, with less than 1% of properties recorded
in a cadastre that is only paper-based.