Property rights issues are still considered today a major concern regarding the general development of the Albanian economy and especially the investment climate. Reform of property rights is a cross-cutting issue for consolidating the rule of law and for fostering investment and economic development. Uncertainty over property ownership remains one of the main obstacles to private-sector development, and a strong barrier for foreign investors. The protection of property rights needs to be further strengthened, including through reviewing the 2012 property reform strategy and strengthening the security of legal ownership.
The digitalization of information provided by the Immovable Property Registration Office has not yet been completed. Real estate market is constantly facing various challenges that in a considerable number originate from the lack of a clear functioning administration system of immovable property rights. The system of immovable properties is not yet coordinated with the databases of other public institutions.
On the other side, many unresolved cases of land property ownership are waiting to be processed from the Albanian judicial authorities, while the number of cases addressed to the European Court of Human Rights is increasing. Deteriorating is also the indicator of ease of registering a property. In Albania, it takes 22 days to register a property title, and while this time duration remains unchanged compared with a year ago, the cost of registering a property has increased significantly from 9.9 per cent of the property price for last year to 10.2 per cent this year.
What has been done
Property-related issues are some of the key impediments related to investment promotion and improvement of the business climate in the country, and they are identified in almost all the topics analyzed by the Secretariat and discussed in the IC, such as Informality in the Economy, Investment Incentives, Access to Finance, Administrative Appeal, Construction e-Permits, Informality in Tourism, etc.
During 2019, the Investment Council attempted to tackle several times, in particular, the property-related issues. In May 2019, the Secretariat prepared an analysis “On Investments and Legal Security on Property.” The analysis was carried out in close cooperation with business associations, experts in the area, as well as with responsible institutions that have actively contributed to the identification of the main property-related issues from a business perspective and provide suggestions for prioritizing interventions also in coherence with the development of the strategic sectors of the country. For more information on the meeting’s materials and recommendations, click here.
Meanwhile, in October 2019, the Secretariat prepared a discussion paper “On Investment Potentials and Priority Sectors“, which tackled again several property-related issues. For more information on the meeting’s materials and recommendations, click here.
In sum up, it was noted that a) there is still no complete and consolidated real estate register, which has particularly affected the decision of potential investors in agriculture and tourism, b) although the establishment of the Immovable Property Fund on the Strategic Investment Support is provided by legislation, to date there is still no comprehensive register of these properties, their condition, and category, c) restrictions on the property right have also been identified as problematic by the EU, investors and foreign experts during the consultation phase of the new draft law on investments, as a formal restriction to foreign investors.