Wednesday, May 29, 2013
Sometimes things in this country run so smoothly that it's hard for students to see the importance of clear and efficient property rules. Not every nation is so lucky. The New York Times recently detailed the title assurance system in Greece (or rather the lack thereof). This is a great, short piece that I'm putting into the section of my class on real estate transactions:
As Greece tries to claw its way out of an economic crisis of historic proportions, one that has left 60 percent of young people without jobs, many experts cite the lack of a proper land registry as one of the biggest impediments to progress. It scares off foreign investors; makes it hard for the state to privatize its assets, as it has promised to do in exchange for bailout money; and makes it virtually impossible to collect property taxes.
This state of affairs is particularly galling because Greece has thrown hundreds of millions of dollars at the problem over the past two decades, but has little to show for it. At one point, in the early 1990s, Greece took more than $100 million from the European Union to build a registry. But after seeing what was accomplished, the European Union demanded its money back.
Since then, Greece has tried, and tried again. But still, less than 7 percent of the country has been properly mapped, officials say. Experts say that even the Balkan states, recovering from years of Communism and civil war, are far ahead of Greece when it comes to land registries attached to zoning maps — an approach developed by the Romans and in wide use in much of the developed world since the 1800s.
The article doesn't mention, and I would be curious to know what role private insurance plays in land transactions in Greece.
(HT: David Schleicher)