Land Tenure Center Newsletter
Number 76, Spring 1998, p. 2-7

Albania's Privatization Pause

by J. David Stanfield

In November 1993, the Government of Albania approved an Action Plan—and the Project Management Unit (PMU) to coordinate its implementation—for creating the institutional conditions to assure the development of a dynamic and sustainable land market.⁽¹⁾ Beginning in 1994, along with the Albanian government, the European Union, and the World Bank, the Land Tenure Center (LTC), with US Agency for International Development (USAID) support, has provided financial, capital, and technical assistance to the PMU for implementing that plan. The Action Plan calls for an Immovable Property Registration System (IPRS) to incorporate the estimated 3 million properties created by various privatization programs since 1991 in a modern, accessible institution documenting who holds what rights to land and buildings. The Action Plan also requires the development of institutional, legal, and procedural support for dynamic land markets—which are accessible to all sectors of the population and which encourage the sustainable use of land resources.

The privatization programs have evolved rapidly since the launching of projects approved under the Action Plan, but since 1995 the rule of law has declined and the country has plunged into political crisis, reaching a climax in March and April of 1997.

The goals originally set for the Action Plan will not be achieved on schedule. At this point, after 45 months out of the 60 envisioned in 1993, 75% of the first registration process should be complete and all registration offices should be functioning. In fact, while 60% of the targeted land area has been updated in field maps, only 30% of the properties have kartela⁽²⁾ and only 65% of the offices have been opened.

The land question continues to be problematic: immovable property markets for agricultural land have only just begun to operate and fragmentation remains a troubling problem; conflicts over rights to urban land have continued and informal occupation of such land means future drains on public services; and forest- and pasturelands have a confused tenure status. Insecurity is of primary concern following the insurrection and violence of 1997.

Social insecurity: Property rights dimension

Doubts about the future darken the lives of many families in Albania. Violence, suspicions of corruption in the courts and the police, and lack of clear, enforced rules for social and economic activities have created deep feelings of insecurity. One aspect of this problem is the uncertainty many people feel about the properties they possess. Thousands of people are in possession of land and buildings in Albania, but many do not have adequate legal documentation of their rights to these assets. There are several reasons for this situation:

The rapidity of privatization programs has produced some cases of inaccurate documentation, examples being the issuance of allotment certificates (tapi) with incorrect parcel information and incorrect listings of co-owners in apartment sale contracts. In other privatization programs, while some have taken the assets to which they may have legitimate claims, the state has not produced the necessary documentation. The most serious example is the lack of issuance of tapi for the possessors of agricultural land that had been owned by their ancestors and was taken with the approval of village land commissions but not according to the provisions of Albania's Law on Land (Law No. 7501). In other cases, there are contradictions between the provisions of different privatization programs. For instance, purchase of store fronts may be followed by restitution of the same properties to ex-owners, or land allotted by village land commissions may be later awarded to ex-owners by restitution commissions. In the metropolitan areas, Tirana and Durres especially, people have built houses and businesses on land which the state had designated for other purposes, such as along the Lana River in Tirana or on agricultural land outside of municipal boundaries. There are also cases of those who through political and economic influence—or through simple force and threats of violence—have illegitimately taken possession of land and buildings.

Administrative map of Albania (districts) Source: A. Jazoj, A., J.D. Stanfield, and T. Barry, "Albanian Land Market Action Plan: Purposes, Achievements, Lessons," LTC Working Paper no. 1, Albania series (Madison: Land Tenure Center, University of Wisconsin, 1997).

These situations contribute to the social instability of the country; conflicts with other claimants and with the state over rights to the land abound. Social instability, in turn, promotes these very situations since the legally established privatization programs have not always operated according to regulations and the state has not been able to enforce the established privatization laws.

Institutional instability

Institutional instability has been quite severe during the past 18 months.

• During the economic and political unrest of 1996, and especially during 1997, the PMU's field teams have not been able to work in all cities and villages.
• Some PMU and District Registration offices suffered physical damage, and some government offices have seen the destruction of documents pertaining to the privatization of immovable properties (especially Lushnja, Pogradec, Vlora, and Berat). Most of the PMU-generated information was saved from the chaos. In several instances, the PMU field teams risked their lives as they took the kartela, maps, and documents out the back door of municipal office buildings while riots were occurring at the front.
• Travel between Tirana and district PMU offices and outside of district centers has been dangerous and severely restricted since January 1997. No PMU personnel have been injured, but there have been close calls.
• During the crisis period of 1997, many illegal actions were taken by individuals and groups in relation to private and public properties.
• Foreign advisors were evacuated from Albania in March 1997; some were authorized to return only in June 1997. No advisors were injured, however, nor were their belongings damaged or stolen.
• Most purchases of equipment and supplies were suspended in March 1997, not to be resumed until October 1997. Some equipment was destroyed, but PMU staff, again in conditions of great personal danger, managed to convince people to leave it alone.
• In 1996 and 1997, the government has not provided adequate office space for the PMU and the Registration offices in Tirana or in most districts, largely due to the incomplete privatization programs and the unclear authority for assigning space which is publicly owned.
• The privatization programs, especially restitution, have not been completed, and the inadequate documentation of privatization actions has affected other programs, especially for agricultural land.
• The Chief Registrar was not nominated by government until 14 February 1996, and, as a result, no district registrars were nominated until July 1996, thereby delaying the finalization of first registration throughout the country.
• Election campaigns in early and mid-1996 made fieldwork difficult in many areas.

Building the land market

The present social, economic, and political crisis makes the Action Plan's focus on building the institutions of land markets critical. The institutional basis for the regularization and documentation of the rights to public and privately owned land and buildings is key to development of the country and smooth operation of the market economy. A legally strong, transparent, unified, and accurate system for the identification and protection of rights to immovable properties throughout the country, especially for the people who have just recently acquired legal rights to property, is an important contribution to greater social stability, economic growth, and fortification of democratic institutions.

The need for the effective completion of the Action Plan is even greater now than before. The main objectives of the Action Plan for the coming months are as follows.

Objective 1: Prepare Immovable Property Registration Offices initially to be used by PMU field teams but gradually taken over completely by registrars and their staff.

Objective 2: Acquire base maps for remaining cadastral zones. This objective aims at providing the base maps for rural and urban zones, which will be updated in order to produce the registration parcel index maps that describe the boundaries of immovable properties.

Objective 3: Conduct first registration⁽³⁾ for agricultural and urban land. PMU/IPRS coordinates, by district, the work of the first registration of immovable properties created by various privatization programs from agricultural and urban land in the cadastral zones designated by the District Registrar (or by the Chief Registrar in the districts where the registration offices have not yet opened). The zones with registration priority are areas where the property market is active, where there are national investment projects being implemented (such as road construction and irrigation system rehabilitation), or where no problems exist with regard to documentation of legal ownership.

Objective 4: Prepare for regularization of immovable property rights where people are in possession of land or buildings but are without legal documents. In approximately 600 villages, tapi have not been issued by the land commissions for the legalization of agricultural land. In most of these villages, the land was distributed according to family ownership prior to collectivization and not according to the provisions of the Law on Land. For some villages the problem has been lack of forms and information for the completion of the tapi, not underlying legal dispute. The land commissions have been dissolved.

Objective 5: Finalize first registration for agricultural and urban lands. The registrars, in cooperation with PMU coordinators in the districts and with the assistance of verification commissions, monitor the process of public display of the immovable properties in each cadastral zone for the legally defined period (currently 90 days). After the display period, the date of finalization is noted on each kartela for properties without conflicts. The whole documentation (kartela, index maps, documents, computer files, lists of owners and properties) for the completed cadastral zone is transferred from the PMU to the Registration Office. At that time the Registration Office may issue ownership and other certificates as well as register transactions.

Objective 6: Conduct first registration of forests, pastures, wasteland, and other immovable properties in public and private ownership. As investment in forests and pastureland grows and as the privatization of rights over these lands becomes more active, the Action Plan will incorporate them into the IPRS. Administrative boundaries of the cadastral zones will be established through forests, pastures, and other public lands.

Objective 7: Conduct first registration of Tirana and Durres. The Tirana-Durres axis is emerging as the most active, highly valued, and complicated immovable property market in Albania. Given the low level of community participation in document presentation and verification, the existing framework of public display and finalization has proved difficult in Tirana. Moreover, there are a large number of competing claimants to land and buildings in both Tirana and Durres as well as a substantial number of "informally owned" buildings and claims to urban land. These issues, combined with difficulties in coordinating and enforcing urban land-use regulation, will require particular attention to complete the first registration. Successful completion of this objective will lend a procedural and legal framework for completion of registration in other urban jurisdictions.

Objective 8: Provide public information and create institutional linkages. Developing confidence in the immovable property market depends not only on an institutional and legal framework, which supports secure transactions in property, but also on public knowledge and understanding of those frameworks. At present there is low public awareness of the implications of the process of first registration and the effect of the Registration Act on property rights and interests.

Objective 9: Train PMU and Registration Office staff and key professional groups dealing with the management of the new registration system, field teams for first registration, functioning of registration offices, and related activities.

Objective 10: Monitor and provide technical assistance to field teams and coordinators doing first registration work. Continuous monitoring, technical assistance, and training of the PMU field teams and the Registration Office staff is essential to assure the highest quality of information about rights and boundaries in the IPRS. Teams that monitor PMU fieldwork and offer technical assistance comprise specialists in index map and kartela preparation, legal procedures of first registration and recorded transactions, and financial management.

Objective 11: Create databases and archives of first registration information. The creation of databases begins soon after PMU field teams begin the first registration process in a cadastral zone. All information recorded on the kartela is entered into a database, followed by various manual and digital tests for consistency and correctness. Lists of owners and properties are produced to display in the appropriate cadastral zones. Index maps are also digitized when completed for quality control and archiving purposes.

Objective 12: Develop legal and institutional options for the improvement and sustainable progress of immovable property markets. The unified system of immovable property registration aims to open dynamic and sustainable immovable property markets. This aim is closely related to the building of new legal and institutional structures, which must be created simultaneously with the evolution of the Albanian economy toward a market-oriented system. Drafting options for this purpose is an important element of the immovable property market action plan.

1. Cf. LTC Newsletter, no. 71, Spring 1994.
2. A page of information prepared for each immovable property, including information on its location, its general description, who holds different ownership rights, and the like.
3. First registration involves the preparation of property index maps, the preparation of a kartela for every immovable property in the cadastral zone, the entry of the parcel cartographic and kartela information in digital databases, and the public display of kartela and map information for comment, challenge, and correction.

Copyright © 1998 by Land Tenure Center and Board of Regents, University of Wisconsin. All rights reserved.
Readers may make verbatim copies of this document for noncommercial purposes by any means, provided that this copyright notice appears on all such copies.

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