ELECTRIC AVENUE

Azerbaijan 2016 | CONSTRUCTION & REAL ESTATE | FOCUS: ELECTRONIC PROPERTY REGISTRATION

Azerbaijan has unveiled a new electronic property registration system that it hopes will streamline the process of real estate registration.

In a system previously characterized by an abundance of paperwork, the process of real estate registration in Azerbaijan just became much easier. The new system allows citizens and legal entities to register their real estate online, without needing to take trips to the registrar's office to submit documentation. In addition to simplifying and shortening the process, the registration process is also now more accessible and requires less bureaucratic red tape. This new service was initiated as part of the National System of Real Estate Registration, a program that also collaborates with the World Bank's Real Estate Registration Project in Azerbaijan. The new property registration system will help spur land and property development throughout the country.

This move is part of a wider government-led electronic initiative; however, it more specifically comes out of a list of increasingly progressive measures taken by the State Committee for Property Affairs. The State Committee for Property Affairs was created through a presidential decree in 2009. In 2012, the State Committee started an online certification process for real estate notaries for the issuance of encumbrance certificates. Since 2012, the State Committee has offered a wide range of e-services, from the registration of leasing and mortgages to listing real estate addresses and receiving documents from the state register related to immovable property. The State Committee currently offers 31 electronic services and three SMS services in this capacity. As a result of the newly available electronic resources, the World Bank Group's Doing Business economic report places Azerbaijan in the top 25 countries in the world in the Ease of Registering Property category.

The necessary steps prior to registering real estate are still in place, meaning there still needs to be a signed and notarized contract indicating a purchase of real estate in order to be eligible to register real estate through the online system. A step in the right direction, this newly available service increases the level of transparency involved with the real estate registration process and it streamlines the services offered by the State Property Committee. The success of these online real estate related initiatives is in the numbers. For example, 2014 saw the greatest volume in overall real estate operations and registrations in Azerbaijan in the history of the country. Marked by an almost 16% increase in aggregate real estate transactions, the amount of registered real estate objects in Azerbaijan has more than doubled in the past five years, exemplifying the importance and necessity of these new online services. In 2015, the State Committee received more than 75,000 requests through the electronic service.

The work that is being done in this sector will not stop with this latest move. The Deputy Chairman of the State Committee for Property Affairs has stated that they are working to create an electronic real estate database for all of Azerbaijan. This database will bring about a new level of accuracy in accounting for the land in the country and is set to be operational in 2019. It will also play an integral role in land-management. Wasting no time, the State Committee has already completed the creation of the databases for Baku and Sumgait. Their goal is to complete the databases for Ganja and Sheki by the middle of 2016 as well. The transferring of property may seem to have only a small effect on the business culture in Azerbaijan; however, it plays a larger economic role than expected. Easing the process for transferring property by computerizing the registration of land, lowering associated fees, and setting new time limits allows entrepreneurs and buyers to use or mortgage their property earlier. With the newfound capacity to keep track of the status of land and property in this new system, the state is also now able to detect the non-use of agricultural land. The Minister of Agriculture has stated that a penalty will be imposed on agricultural land that goes unused for one year. Thus, this example highlights how the electronic property registration service better equips the government to maintain a healthy, country-wide vision over real estate and properties.