24-04-2013

Property Law - Basic Legal Framework (Property Rights, Procedural Issues of Acquisition, Restrictions)

Authors

  • Florjan Piperi, Attorney at Law
    Partner at Optima Legal & Financial Law Firm

The right of private property is guaranteed by the Constitution of the Republic of Albania, article 41. For purposes of public interest, restrictions can be put to this fundamental personal right by means of a law on expropriation of a property and against a just compensation to the owner.

Obtaining Property Rights on Immovable Property

Immovable property right is transferrable and can be obtained by several means. The most common ways of acquiring property under Albanian legislation are the following:

  • By contract -a notarized legal act signed by both parties, providing terms and conditions on the transfer of ownership (Purchase, donation, transfer of business, acquisition of shares etc.);
  • By succession;
  • By prescription - the beneficiary possesses freely the property in good faith for 10 uninterrupted years.
  • By merger and mixing -the new land created by alluvium, collected material or withdraw of river flow, property rights belong to the owner of the land next to the new created land;
  • By court decision;
  • Procedures of recognition and/or compensation by the competent commission of land - before the ’90-s, Albania was governed by a centralized regime where private property with full rights of transfer was not allowed. The state, as sole owner of all properties, granted only the right of use on an immovable property. After the political changes of the ’90-s, the right of private property was again restored and guaranteed. So it began the return of property to its original owners. The actual law “On the restitution and compensation of the property” provides for the original owners the right to apply for the return of their properties by submitting old documents that prove their ownership rights. In cases of properties that cannot be returned due to irreversible changes over the property (a new building has been built over the property), a scheme of compensation of the value of the property is applied.

Expropriation is another way for obtaining property rights on immovable properties. This right can only be exercised by the state only for purposes of public interest, by means of a law enacted by the parliament and on basis of a fair and just compensation to the owner.

Areas under Special Regime

The Constitution has established the state’s responsibility for rational exploitation of forests, waters, pastures and other natural resources on the basis of the principle of sustainable development. In this context, restrictions on construction and property rights are imposed for certain areas such as:

The protected areas. According to law No. 8906, dated 6.6.2002 “On Protected Areas”, due to their biological diversity of natural and cultural resources, the protected areas are divided as:

a) Strictly natural reserves / scientific reserves;

b) National Parks;

c) Natural monuments;

d) Managed natural reserves / area of management of habitats and species;

e) Protected landscapes;

f) Protected areas of managed resource / multiple-use protected areas.

There are actually 384 protected areas in the Albanian territory. They are divided into 6 categories, which include:

  • 4 strictly protected areas including Laguna of Karavasta (Lushnje), Gashi River (Tropoje), Rrajca (Librazhd) and Kardhiq (Gjirokaster),
  • 11 national parks;
  • 300 natural monuments;
  • 26 managed areas,
  • 4 terrestrial or marine protected landscapes, and
  • 4 resources protected areas.

Protected areas occupy a total area of 109 050 ha, 10.5% forest equal to 3.8% of the total surface of the country.

The agricultural land. It is governed under a legal regime that differs from that of construction land and cannot be used for construction. Landowners are not entitled to construct on agricultural land except from houses and storehouses (i.e. temporary constructions) to be used strictly for agricultural needs.

However, agricultural land and other types of land other than construction land can be converted into construction land through special administrative procedures. Owners of agricultural land outside the boundary lines of cities, villages and residential areas have the right to require urbanization of their land only on the basis of regional studies, master plans and studies of suburban areas, approved by the competent authority.

Areas ruled by urban planning. All constructions within the territory of the country are carried out on basis of regional and environmental urban planning, master plans, infrastructure plans, general regulatory plans.

A. NEW LEGAL FRAMEWORK

Construction and development permits

Before year 2009 the requirements to obtain a construction permit, were provided by the law “On Urban Planning”, repealed after the adoption of the new law. In order to obtain a construction permit the interested developers should wait long bureaucratic procedures that extended approximately to 390 days.

An important initiative undertaken by the Albanian Government is the reformation of the legal framework in the field of construction. On April 23 of 2009 the Parliament approved the new law no. 10119 “On the Territorial Planning”. It establishes a new system on territory planning by creating a new structure of rules on the division of the competences and responsibilities, organization and approval of the town planning policies. These new rules extend to construction issues, examination and approval of construction permits, and monitoring of construction procedures and other different innovations and challenges as follows:

  • Reorganization of the competent authorities acting in the area of territorial planning, by aiming the reduction of the administrative barriers during the implementation of the law.
  • Establishment of the Territorial Planning Register which will contain data in hard copy or electronically. This Register is organized as a multifunctional cadastral electronic database on land. The competent authorities, at national or local level, independently, maintain their respective database integrated in the Register, as part of a technical platform, structure and common geodesic standard (GPS), to assure their inter-compliance and interaction, as well as change and use the recorded information and data therein.
  • The territorial planning register contains data on land, planning drafts, applications for the development permit, construction and infrastructure permit, including also the respective granted rights or legal restrictions put by such permits, as well as other studies or documents with public interest.
  • The new law reduces the time required for issuing a construction and/or a development permit up to 55 days from the application date. The applications procedures are based on a one-stop-shop service. Further, the new law remove the redundant procedures on issuance of the development/construction permit, cooperation with the public in the decision making process through the organization of public hearings with the interesting parties.
  • The development permit is issued by the local authorities based on a prior regulative territory planning approved by the central institutions.
  • The operational costs are significantly reduced. The official fee for granting a development permit is ALL 100 per each application, while the former fees applied were from ALL 3.000 to ALL 60.000.

B. REGISTRATION OF IMMOVABLE PROPERTY

Immovable properties are registered with the Immovable Property Register, recently going through the process of transformation into an electronic database. With the digitalization of this register, the processing of online application is currently put in place in Tirana District with the scope of further functioning in all Albanian territory.

For purposes of registration, the Registration Offices keeps records of:

  • Purchase contract and any other act of property title transfer of any Immovable Property; After registration, the Immovable Property Registration Office issues the new title deed “Certificate” which contains property details (e.g. property number), ownership, any mortgage or lien over the property;
  • contracts through which any property rights on immovable property are established, acknowledged, changed or ceased;
  • mortgage contracts;
  • court decisions on an immovable property;
  • lease contracts longer than 9 years;
  • development and construction permits -permits are registered with a special register. After the building is constructed, the data and elements of the new property are integrated with the Immovable Property Register.

During the last 20 years of private property, a large number of informal buildings, having no regular permits from any respective authorities or in excess of the permitted construction surface, were built within the territory of Albania. For the purpose of regulating their ownership regime, law No. 9482 dated 03.04.2006 “On Legalization, Urbanization and Inclusion of Informal Buildings” was approved and implemented. The buildings and the constructions that met the requirements for legalization were registered with the Immovable Property Register and became formal and legal constructions. As from 2008, buildings constructed without any permit or exceeding permit requirements are demolished.

1. Land and Construction Registration Procedures

The registration of immovable properties regulatory reform has direct impact in the organic structure of the central and regional Offices of Immovable Property Registration (IPRO). All IPRO-s have in their structure sectors of public relations and opened front desks for applications and public information. This sector is created and established for facilitating the commencement of registration procedures or any other application with IPRO-s.

All IPRO offices are working for the data transfer and record of the immovable properties in an electronic register. The digitalization of the data in an electronic register will lead these offices to a more efficient and faster work. On December 16th, 2011 was approved the structure of the immovable properties registration system at national level aiming the data digitalization for registration of lands and constructions. This process is expected to end by June of the year 2013.

Due to a project undertaken by the Albanian Government, financed by the World Bank, the initial systematic registration of the cadastral immovable properties by IPRO, enables the registration of immovable properties within 30 days from the application. This registration process is being implemented by well-known foreign companies under the supervision of IPRO.

The owner of an immovable property, construction-building or land, files the application with the Immovable Property Register. It is administered by the IPRO-s on a district level. It contains the factual situation of the land or the constructions. The respective IPRO in each district maintains the database on land and construction registration procedures.

The IPRO manages the following documents:

a) Immovable Property Registers;

b) Maps indicating the registration of the cadastral area;

c) Purchase contracts, court decisions, mortgages, inheritance deeds and any other legal documents that may affect the ownership rights.

d) Survey plan, index records in the immovable property registers, and other registries created or administered by local offices of immovable property.

e) Films and electronic information.

2. Immovable Properties Registration System (IPRS)

Each registration volume contains one folder for each plot of the immovable property under private or public possession, which holds a unique identification number. The boundary lines, area and approximate geographical location of properties are reflected in the Indicative Map of Registration (IMR) which is an indicator of the actual location of the property. In legal terms, a boundary line is a closed area which defines where the property of an owner ends and where a property of another owner begins. In the event of disputes regarding the boundary lines, when the parties settle such disputes by themselves, the Registrar must list the agreement signed by both parties. If they do not resolve their disputes, the Registrar should instruct them to address the issue to any competent authority or the court. The first registration of immovable properties must be made public for 45 days, usually in the environment of the IPR Offices.

The registration system of immovable properties is unique and integrated with the cadastral system. It also registers land and constructions connected with the land. A building having a different owner than the one of the land upon which the building is constructed, may be registered as a separate immovable property.

IPRS is indeed a system of information which includes: identification of the property; description of the property; property ownership rights; lease sections; usage; bordering agreements, restriction agreements, servitudes/easements and other interests, along with section of mortgages, court decisions, restrictions.

3. Other Details on the Registration System

The spectrum of applications for information on the land and building is quite wide and the Registration System enables each “Kartelas” to have adjourned information on the property, use of the urban land, additional space to include other information such as high buildings, type of construction, construction timeframe, recorded in the Section of special descriptions, etc. During the first registration process, the register contains information in terms of cadastral use of the land, but the system gives no guarantees on any updated information. The system does not provide any information with respect to the value of the land in terms of estimation of the potential for income generation.

The Use and Value of the land are two concepts of the system of land administration, and the combination of these data with property information provided in the registration system fully complies with the requirements regarding land administration in its entirety. The registration system satisfies the demands of state administration for taxes, because it provides accurate information in relation to actual size of the parcel of land or building and registers accurately the relevant data concerning tax on transaction of immovable property. Registration system guarantees the buyer for the accurate data of the “Kartela”of each property, but also allows him (the buyer) to perform (in agreement with the owner) a new verification of measurements of the property. This procedure enables the registration of possible new measurements in the respective part of the property.

Finally, the section of identification of property is displayed in the respective column of the Kartela and it is also reflected in the indicative maps of registration, as a connecting aspect with all the rest of the geo-reference information.

GREEK LAW DIGEST REPUBLIC OF ALBANIA MINISTRY OF INTEGRATION Union of Chambers of Commerce and Industry of Albania
Nomiki Bibliothiki ALBANIA INVESTMENT DEVELOPMENT AGENCY Foreign Investors Association of Albania
     

 

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