The Draft Law on Land Registration is not Going to Ensure the Implementation of a Meaningful Land Reform

22 June, 2016


On June 3, 2016, the Parliament of Georgia supported – in the third reading – a draft law initiated by the Government that envisages the introduction of a special procedure for registration of ownership rights on land parcels. According to the explanatory note to the draft law, the document envisages implementation of a state project. This project is aimed at creating complete property and cadastral data on real estate in the country, encouraging the registration of private ownership of land parcels, and, by doing so, contributing to the development of the real estate market.    

TI Georgia is actively involved in discussions on draft laws related to registration of land. In this case, the Government’s initiative to simplify the procedures for registration of private ownership of land parcels should be assessed positively. However,  we also believe that adopting the draft law in the existing form is neither going to ensure the implementation of a meaningful land reform in the country nor an avoidance of disputes caused by overlapping boundaries of land parcels.

What the Draft Law Envisages  

The draft law makes it possible to register ownership rights on land parcels by simplified procedures till July 1, 2018. In particular:  

  • Legalization of deficient registration documents. According to the draft law, it will be possible to register ownership rights on agricultural land parcels on the basis of deficient documents. For example, a gardener’s certificate issued by a gardeners’ partnership which contains a combination of the year of issuance, the name of the gardeners’ partnership, the area of the allotted land parcel and a seal will be considered an appropriate registration document.  
  • Unhindered registration in the event of inconsistency in a person’s identification data. Inconsistencies in a name and/or surname indicated in a person’s identification document and registration documentation will not hinder registration.  These inconsistencies include: inaccuracy in letters that are caused by a mechanical mistake, inaccuracy in translation into the Georgian language or by other reasons, name or surname in a diminutive/familiar form, etc.
  • Registration of ownership rights on the basis of an agreement made without observing the required form. In such cases (e.g. a verbal agreement on the sale of an immovable object), the draft law envisages the procedure for registration of the de facto user of a land parcel as the owner, on the basis of a (new) notarized and certified agreement concluded by the parties.       
  • Registration of more territory than the area indicated in documentation confirming the right to ownership. According to the draft law, owners of agricultural land will be allowed to register 15% more territory than the area indicated in a registration document, provided that this area is surrounded by a firm boundary. And in the case of existence of a building/structure, it will be possible to register 10% more area.  
  • An alternative means of examining disputes – mediation. The draft law obligates the National Agency of Public Registry to use mediation, including notarial mediation, if a dispute between parties arises in the course of implementation of the state project.  
  • Performance of registration work without service fees. The work to be carried out in the framework of the project (searching and systematization of documents, notarial certification of signatures of the parties on agreements, acknowledgement of ownership rights on land parcels, ascertainment of facts, services provided by the Agency) will be reimbursed by the State. As for the fees of the surveying work, according to the draft law, they may be reimbursed with the procedure and under the conditions established by a legal act of the Minister of Economy and Sustainable Development of Georgia.
  • Certification of surveying activity. The legislative initiative envisages mandatory certification of surveyors. At the same time, the responsibilities of the owner/possessor of a land parcel and that of the surveyor are separated. In particular, the owner/lawful possessor of an immovable object is responsible for identifying the location and boundaries of the object, while the surveyor is responsible for proper performance of cadastral planning/surveying work and for the accuracy of the data.
  • Implementation of a pilot project. The draft law envisages a special procedure for registration in 12 settlements of Georgia, which will be implemented in the framework of a pilot project. In this case, the Agency will, proactively and on its own initiative, search for documents required for registration, make cadastral descriptions of land parcels, register changes in the cadastral data, and exercise other powers.

Threats Emanating from the Draft Law

It is expected that the advantages (exemptions) envisaged by the draft law will considerably encourage the registration of private ownership of land parcels and increase the number of registered land parcels, although we should also take into account the threats posed by the draft law. In particular:   

  • The draft law fails to ensure that cases of overlap of boundaries of land parcels will be avoided. 

According to information provided by the Ministry of Justice, in the past five years, the Public Registry suspended registration proceedings in up to 56,000 cases (one in every four applications on average) on the grounds of overlap of cadastral data. Overlap of boundaries of land parcels may be caused by several factors, including a large number of registered land parcels with unspecified boundaries (according to the paper version) or considerable deficiencies allowed in the course of land reform in the past years. As a result, the State often lacks information on the exact location and cadastral data of land parcels under private ownership.

In such a situation, encouraging sporadic (individual) registration by means of the initiated draft law is going to cause an increase in the number of applications of interested persons to the Public Registry and, therefore, in the number of cases of overlap. According to the proposed draft law, the Public Registry will first register the ownership rights of those people who apply to it and submit the registration documentation, including the cadastral/surveying drawing, at the earliest date. Despite the fact that the legislative initiative introduces the certification of surveying activity, the responsibility for identifying the location and boundaries of an immovable object still rests with the owner. Under such circumstances, concrete land parcels will be registered in isolation from adjoining land parcels, often without determining the boundaries of the adjoining parcels beforehand; therefore, there is a considerable risk that disputes will arise between neighbors regarding the overlap in the cadastral data. Such a situation will cause an overloading of courts, and it should also be taken into account that citizens will have to spend considerable time and expenses on court proceedings.

Although the state project envisages an alternative means of resolution of disputes – mediation – this mechanism will not be effective in cases of individual (isolated) registration. Cadastral data can only be specified/ascertained objectively together with specification of the data of all the land parcels in the concrete registration area, i.e. by means of systemic registration. In the case of isolated registration envisaged by the draft law, the process of mediation will only involve the parties to the dispute, without taking into account the data of the other land parcels in the concrete registration area. In such a situation, any change in the boundaries made as a result of mediation may cause overlaps in the entire registration area and, therefore, give rise to disputes with owners of the other adjoining land parcels.

  • The draft law is not accompanied by estimates of required funds, which poses a threat to the implementation of the state project.

According to the explanatory note, the draft law will affect the expenditures part of both the state budget and the budget of LEPL National Agency of Public Registry. However, the draft law is not accompanied by even approximate estimates of the required expenses that would enable Parliament to assess the desirability of the financial obligations that the implementation of the project imposes on the state budget.

It should also be taken into consideration that, according to the draft law, the fees of the surveying work might be reimbursed by the State, though the document does not contain information about the procedure and conditions under which the reimbursements will be made or about the extent of financial obligations that will presumably be imposed on the State.

The lack of financial estimates brings unhindered implementation of the state project under doubt, as it is not certain whether or not the state budget has sufficient financial resources to successfully complete the project.

  • The limited term of the state project is going to cause intensification of registrations for which registration bodies may not have enough available resources.   

According to the draft law, the established advantages (exemptions) will be in force till July 1, 2018. Setting this term is going to increase the number of registration applications; therefore, the State will have to incur considerable expenses within a very short time, which will be a heavy burden for the budget. In addition, it is expected that the National Agency of Public Registry and the commissions on the recognition of ownership rights will be overloaded and will not have enough human resources. This will result in failure to observe the deadlines for examination of applications, and it will become difficult to fully explore the circumstances of each case. This will ultimately cause citizens’ discontent and reflect negatively on the quality of registrations.  

  • The draft law does not contain the obligations to generalize the results of the pilot project and to complete the reform by carrying out systemic registrations across the country.

The state project consists of two components:

  1. The pilot project that envisages systemic registrations;
  2. Sporadic registration that envisages individual registrations of land parcels on the basis of individual applications.

The pilot project is supposed to be implemented only in several settlements with the financial support of the World Bank. In the area of implementation of the pilot project, a special, systemic procedure of registration1 will be put in place which is different from the individual registrations (based on individual applications of interested persons) envisaged by the state project which will be carried out in rest of the country.

According to the draft law, the pilot project will be carried out in parallel with sporadic (individual) registrations. It should also be noted that on October 29, 2015, the Minister of Justice of Georgia approved the Strategy of Land Registration and Improvement of Cadastral Data in Pilot Areas by Order No. 106. According to the strategy, the goal of the pilot project was supposed to be the development of the strategy and methodology for the National Program of Land Registration – which was later to be extended to the entire territory of the country – on the basis of the results achieved. Therefore, the proposed draft law contradicts the strategy approved by the Minister of Justice and makes the goal and purpose of the pilot project incomprehensible.  

Our recommendations

In order to achieve the goals of completing the primary registration of ownership rights on land parcels across the country, and improving the cadastral data, which were set by the draft law, it is necessary to make changes to procedures envisaged by the approved draft law. In particular:   

  • The draft law should envisage the obligation to carry out systemic registrations across the country.     

Systemic registration of land parcels implies a proactive analysis of documentation on all adjoining land parcels by the registration body, after which the real, factual location of the land parcels is ascertained, which evidently reduces the risk of disputes related to the boundaries of land parcels.      

We believe that systemic registrations carried out in the pilot areas will ensure the creation of complete cadastral data; therefore, the draft law should envisage the obligation to gradually extend systemic registrations across the country after the expiry of the period of registration without service fees, taking into account the priority regions and exceptional procedures.  

  • Sporadic registrations should not be intensified until systemic registrations are completed across the country.

If the draft law includes the obligation to carry out the systemic registrations across the country, it will not be desirable to encourage sporadic registration of land parcels by setting a two-year term. As in the latter case, it will not be possible to avoid overlaps, whose correction will later involve various legal difficulties. Therefore, it will be better to extend the advantages (exemptions) established by the draft law until the State completes systemic registrations across the country. In this case, individual owners with an urgent interest in registration will be able to make use of advantages (exemptions) established by the legislation. If such an urgent necessity does not exist, registrations should not be intensified, which, in its turn, will enable us to avoid both court disputes and overloading of the National Agency of Public Registry.  

  • The Government of Georgia should present estimates of funds required for the implementation of the state project.

In order to ensure unhindered implementation of the state project of land registration, the Government of Georgia should present the estimates and sources of funding that is required for the project’s implementation. It is also necessary to specify the procedure and conditions under which the State will reimburse the surveying work of land parcels.


1 The aforementioned procedure implies that the registration body will carry out all types of surveying and registration work (searching and systematization of registration documents, making cadastral descriptions of land parcels and documentation of the results of the work done, registration of changes to the cadastral data in the registry of ownership rights on immovable objects, and exercising other powers) on its own initiative.     

Author: TI Georgia