Transcript Compulsory Purchase of Property for Public Needs and

Compulsory Purchase of Property for
Public Needs and Compensation –
Development of Procedures and the
Role of Valuation in Lithuania
Steponas DEVEIKIS, Albina ALEKSIENĖ, Birute
GALINIENĖ, Vilnius, Lithuania
Joint Seminar, Helsinki, September 6-8, 2007
Contents of presentation
• Development of legislation on compulsory
purchase in Lithuania
• Stages and procedures of compulsory purchase or
expropriation of land for public needs
• Development of methodology and background of
property valuation practice
• Good management of the process and role of the
SE Centre of Registers – registration, database, GIS
and cadastral maps…
• Valuation. Disputes and appeals procedures
• Problems and suggestions. Final remarks
Legislation on compulsory…
•
•
•
•
Constitution of Lithuania, 1992 (art. 23; 46)
Civil Code, 2000
Law on Land, 1994, 2004 (art. 37; 45, 46, 47)
Rules approved by the Government (2005) for
Application and Investigation of Land
Expropriation for Public Needs
and Rules for Arrangement and Implementation of
Land Expropriation Projects, 2005
• Law on Territorial Planning, 1995, 2005
• Laws on Cadastre/Register,
Public needs are…
• Defence and national boundaries,
• Airports and harbours development,
• Railways, roads, infrastructure of communication and
electricity,
• Social infrastructure, recreational & leisure infrastructure,
• Territories of mineral resources mining,
• Construction sites of waste treatment objects,
• Cemeteries,
• Natural and cultural heritage protection sites,
• Business projects of state significance the importance of
which is recognised by the Government and the Seimas
(Parliament).
Project examples and procedures
Via Baltica development and road
•
1.
2.
construction; Klaipeda harbour
development; FEZ and industrial parks
development projects
Two steps:
Application submitted by the Municipal
Council or State institution to the
County Administration
Having investigated soundness and
feasibility of an application, the Head of
the County Administration makes a
decision. When making such a decision,
a plan of boundaries of the territory
where land expropriation project is to
be implemented shall be prepared; and
when such a decision is made
information is transferred to the
Administrator of RPR.
Organisational structure of Lithuanian
Real Property Administration System
GOVERNMENT
MINISTRY
OF INTERIOR
SURVEYORS
(LEGAL PERSONS)
MINISTRY OF
AGRICULTURE
NATIONAL LAND
SERVICE
MINISTRY OF
ENVIRONMENT
TERRITORY PLANNING
DEPARTMENT
STATE CONSTRUCTION
INSPECTORATE
MINISTRY OF
JUSTICE
MINISTRY OF
FINANCE
NOTARIES
CENTRAL
MORTGAGE
OFFICE
STATE LAND
SURVEY INSTITUTE
COUNTY MANAGERS’
ADMINISTRATIONS
MUNICIPALITIES
FOUNDER
TAX
INSPECTORATE
STATE ENTERPRISE
CENTRE OF REGISTERS
METHODICAL GUIDANCE
EXCHANGE OF INFORMATION
Project of land expropriation
When a decision is made to start implementing the land expropriation
project, the Administrator of RPR enters a note. From that moment
property owner has no right to transfer this property, mortgage it or
create any other encumbrances.
Projects of land expropriation for public needs are considered as special
territorial planning documents, which must be prepared in accordance
with the Law on Territorial Planning. The stages of this process/
project are as follows:
• Project preparatory stage;
• Project arrangement stage;
• Project solution impact assessment stage;
• Project finalisation stage (discussing and approval)
After approval of the project new cadastral land parcels are formed which
are registered in the cadastre and Real Property Register. Property and
other losses need to be valued. Value is calculated according to Article
47 of the Law on Land and the Law on the Basics of Property and
Business Valuation.
Single property valuation and mass appraisal
development in Lithuania
Single property
appraisal / valuation
Starting
point -
System
development
System
improvement
Mass appraisal
Normative
values
Year
1993
Transition to market values
1999
Mass appraisal
system
development
2002
2006
Methodology & background of valuation
The Law on the Basics of Property and Business Valuation (BP&BV)
provides for property valuation methods used in the international
practice (IVSC Standards, European Valuation Standards).
Article 6 of the Law on BP&BV establishes definite principles for setting
value of a property, wherein it is stated that:
i.
ii.
iii.
iv.
Property value is determined in accordance with market economy logics and
criteria, and the results of the analysis of market and economic conditions;
Property value is determined with precaution and reserve so as to avoid
violating the rights of land owners, and in keeping with property exchange
and alternative property use principles;
The basis for determining property value considers the foreseeable income
and profit from using the property or its sale-purchase, or the satisfaction of
personal needs;
Property value may be determined according to sale-purchase trade
agreements, property creation or acquisition costs, and the income
generated through using the property.
Web-site Centre of Register – database for valuations
Role of the Centre of Registers
Good practice in cadastre and real property registration in
Lithuania is a background for good practice in compulsory
purchase.
Information on market transactions is very relevant and
important in the real property valuation, particularly in
valuation in case of expropriation.
Access to the latest information on market transactions is
possible for all Lithuanian valuers.
One hopes that with the Law on Real Property Tax (2005)
and mass valuation results coming into force, the process
of compulsory purchase will be coordinated with valuation
regulations. More definite regulation of mass valuation
and individual valuation remains a very important issue
from both a methodical and legal point of view in
expropriation.
Market transactions database system
Fair compensation and appeals
According to laws and legal acts, the types of fair compensation are as
follows:
• Monetary compensation based on market price (ad valorem);
• Land plot of equal value.
Lithuanian legal acts entitle each landowner, whose land plot was
expropriated for public needs, to make an appeal against the type and
amount of compensation.
Fair compensation = fair and objective valuation? When agreeing to
undertake work in this field, Lithuanian valuers must also be prepared
for long appeal and court processes.
If the landowner of the expropriated land does not agree with the amount
of compensation, i.e. the value determined by the property valuer, the
expropriated land rights may not be registered, nor may the
expropriation procedure be terminated. The appeals process in many
cases takes a long time.
Final remarks
• In practice, the process of land expropriation for public needs in
Lithuania is quite long. Legal acts establish fair procedures on
compensation for land and other real property expropriated for
public needs.
• The appeals process is more instrumental in securing property
owners’ rights than public interests. If the expropriated
landowner disagrees with the offered compensation (i.e. the sum
of money), the land expropriation procedure is not finalised and
public rights are not registered.
• Property valuation as a prerequisite of fair compensation for
expropriated land, must be always based on the latest
information and updated databases. The Real Property Register
and Cadastre system and the market transactions database of
the Centre of Registers constitute a solid base for the
implementation and administration of land expropriation for
public needs.
• Legislation on expropriation will be developed safeguarding
against possible abuse of the land expropriation procedures.
Thank You for your attention
Invitation to next Baltic Valuation
Conference ’2008
BVC’2008 will be held in Klaipeda, Lithuania in September 2008
The theme of this Conference will be
“Recreational & Leisure Property Valuation Around Baltic Sea”
This Conference will be organised in co-operation LTVA and
Klaipeda University, and other bodies.
Social programme will include a walk in the Old town of Klaipeda, other
city places and Palanga Park with the Amber Museum
We look forward to meet you in Klaipeda - Palanga, Lithuania, September 2008