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1. Property Rights
1.1 Legal Protection
1.2 Registries
1.3 Formal Ownership

 

1. Property Rights

Goal – Property rights that are legally protected, secure, recorded in a single, accurate, widely accessible electronic registry and that lead to high levels of formal ownership for all citizens

 

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1.1 Legal Protection

Core Question: Does an effective and sufficient legal framework exist to protect property rights for all citizens? No – Very weak. While the idea of private property does exist in Venezuela, the government has the right, based on its own judgment, to dispose or take control of property. Since Chavez’s re-election (2006), private real estate rights have been constantly revoked by the government.

Source: http://panampost.com/trino-marquez/2013/10/15/venezuela-does-private-property-even-exist-there/

Legal Framework

1.1.1   Are property rights clearly defined and protected by law? No, property rights in Venezuela are very weak, ranking 148 out of 148 and with a score of 1.61 out of 7, Trend ↓. Government corruption and political influence have had a negative impact on property rights.

Security of Tenure

1.1.2   Can citizens challenge the legality of government takings? No, citizens in Venezuela cannot challenge legality of government takings. Venezuela ranks 148th, very weak, out of 148. Venezuela has a score of 1.47 out of 7 and is has a Trend  (1.74 in 2012-2013). Once again, corrupt courts and government under Hugo Chavez his successor (Nicolas Maduro) has virtually eliminated the ability for citizens to challenge the government. Chavez was known for claiming that “land is, by nature, the property of everyone,” (http://americasquarterly.org/chavez-private-property)

Source: Global Competitiveness Report 2013-2014 – World Economic Forum
http://www.weforum.org/issues/global-competitivenes

Bundle of Rights

Survey Question

SQ1    What is the bundle of rights (group of rights such as occupancy, use and the right to sell or lease) associated with both residential and commercial property ownership? Very Weak – While land and title can be obtained, the Venezuelan government, under Hugo Chavez and his successor, has had extreme restrictions on who gets title. The government has also stretched its power in seizing land without the proper methods or compensation.

Source: An Essential Human Right: Property Rights in China and Venezuela 2013, CIPE Development
http://www.cipe.org/blog/2013/09/27/an-essential-human-right-property-rights-in-china-and-venezuela/#.U7Q2lfldV8G

Source: Housing in Venezuela, Embassy of the Bolivarian Republic of Venezuela to the UK and Ireland
http://embavenez.co.uk/sites/embavenez.co.uk/files/factsheets/Fact%20sheet%20-%20Housing.pdf

 

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1.2 Registries

Core Question:  Does a reliable property registry exist including cadastral, title and mortgage lien information? No, the registry for real estate is in Cuba, a result of the Government’s relationship. This makes it quite difficult to conduct proper real estate transactions or to identify owners.

Source: Mercel Carvallo 2012, Private Property is at Risk in Venezuela


1.2.1  Cadastral Information

Status – Strong

Survey Questions

SQ 2   Is cadastral information (information about the dimensions and location of land parcels) accessible to the public? Yes, though most of it is a new concept and in the beginning stages.

SQ 3   Is zoning/permitted use information included are use regulations respected and enforced? Yes but the laws are sometimes vague. However, it seems that zoning is quite regulated, particularly when it comes to environmental issues.

SQ 4   Are Geographic Information Systems (GIS) including Global Positioning Satellite (GPS) information used to create and update the registry? Yes, but the majority of the GIS and GPS is in the beginning stages of development. Several industries and firms are also not always open to sharing specific information as well.

Source: Organization of American States, Support to the Cadastres of the Americas
http://portal.oas.org/Default.aspx?tabid=839&language=en-US

Source: Water in the Bolivarian Republic of Venezuela, Embassy of the Bolivarian Republic of Venezuela to the United States
http://venezuela-us.org/live/wp-content/uploads/2009/08/FS_WaterASocilaVision_March20091.pdf

Source: The Imataca Zoning Plan: A New Precedent for Zoning and Management in Forest Reserves?, All That Glitters Is Not Gold
http://www.nzdl.org/gsdlmod?e=d-00000-00—off-0envl–00-0—-0-10-0—0—0direct-10—4——-0-1l–11-en-50—20-help—00-0-1-00-0-0-11-1-0utfZz-8-00&a=d&cl=CL1.1&d=HASH9e4c32caab66acce952fbc.8.4

Source: Building Geographic Information Systems from the Ground Up 2004, California Polytechnic State University
http://digitalcommons.calpoly.edu/cgi/viewcontent.cgi?article=1033&context=focus

 

1.2.2  Title Registry

 Strong – Ranking – 95th out of 189, Trend ↓ (89 in 2013). Costs are low to register property, but number of procedures are high. Duration to complete transfer is medium in length. .

1.2.2.1 What is the number of procedures required to register the transfer of a property from one owner to another? 8

1.2.2.2 What is the duration of time in calendar days that it would take to complete the transfer? 38

1.2.2.3 What is the total cost of the transfer including all fees, taxes, etc. expressed as a percentage of the value of the property?  2.5%

Source – Doing Business 2014 – Registering Property, World Bank
http://doingbusiness.org/data/exploreeconomies/venezuela#registering-property


1.2.3  Mortgage Registry

Very Weak. The mortgage registry market in Venezuela is a very new concept and information is little to none. On top of which, electronic versions are unavailable and title insurance is not an option.

Survey Questions

SQ 5   The mandatory use of notaries or similar officials slows down and adds cost to the process. Does a notary need to be involved in the registration process? Yes, several departments at the registry require review and receipts of documents. “Staff at the registry is inclined to use discretion (jurisprudencia) in dealing with cases and may ask the clients two times for extra documents, thus delaying this procedure,” (Doing Business, 2014).

SQ 6   Is information in the registry available electronically? No. Information is not secured and is not online

SQ 7   Title insurance is indemnity insurance against financial loss from defects in title and from the invalidity or unenforceability of mortgage liens. Is title insurance available to lenders? No, title insurance is not an option in Venezuela.

Source: Doing Business 2014, Economy Profile: Venezuela
http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2014/05/14/000260600_20140514154114/Rendered/PDF/830070Venezuela0VEN0Box0382127B00PUBLIC0.pdf

Source: Global Property Guide, Venezuela
http://www.globalpropertyguide.com/Latin-America/Venezuela/Buying-Guide

Source: Latin Lawyer, The Business Law Resource for Latin America 2013, Venezuela
http://latinlawyer.com/reference/topics/53/jurisdictions/24/venezuela/

Source: Mercel Carvallo 2012, Private Property is at Risk in Venezuela

 

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1.3 Formal Ownership

Core Question: Do citizens understand and trust property rights institutions and avoid the informal sector? No. Weak. While property rights do “technically” exist, the Venezuelan government can virtually ignore private land rights on a case by case basis. So, while property rights are clear to the citizens, they obviously do not trust those rights since the government clearly has control and no boundaries. “In short, the CRBV clearly establishes the principle of private property and defines the cases in which the government can ignore it and dispossess an individual or a company of their assets,” (PanAmPost, 2013).

Source: PanAm Post 2013, Opinion
http://panampost.com/trino-marquez/2013/10/15/venezuela-does-private-property-even-exist-there/

 

Survey Questions

1.3.1 Land

SQ 8   What is the status of land ownership?  Weak, some private land ownership is allowed, and it is part of the Venezuela’s law (Article 115 of the Constitution of the Bolivarian Republic of Venezuela, December 15, 1999). The law states “The right of ownership is guaranteed. Everyone has the right to use, occupy, enjoy, and dispose of their private property,” (PanAmPost, 2013). However, while land ownership is allowed, most uses are heavily controlled by the government. The government has almost exclusive rights to revoke land ownership rights at its own discretion.

Source: PanAm Post 2013, Opinion
http://panampost.com/trino-marquez/2013/10/15/venezuela-does-private-property-even-exist-there/

1.3.2 Home Ownership

SQ 9   What is the percentage of formal home ownership? 83% is the percentage of formal home ownership, very strong.

Source:Housing Finance Information Network
http://hofinet.org/countries/country.aspx?regionID=4&id=179

Informal Sector

1.3.3  What is the percentage of services firms that report competing with unregistered or informal firms?  Medium – Strong formal sector, only 29.8% of firms are competing against unregistered or informal firms.

Source: Enterprise Surveys 2010, Venezuela
http://www.enterprisesurveys.org/Data/ExploreEconomies/2010/venezuela#informality

 

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In-Country Assessment Information


Field Question (FQ) 1. Even if legal provisions exist, what is the actual status of property rights and ownership for small businesses?


FQ 2. Are standard leases used for commercial space? If not, what is a typical arrangement for rental?


FQ 3. What are the processes for government expropriation of property especially notice and due process for owners? Are those laws followed or do expropriations happen by collusion between officials and connected elites?
 

FQ 4. Are businesses owners compensated fairly when their property is taken for public use?


FQ 5. What protections do businesses have who lease space from arbitrary eviction by owners?


FQ 6. What is the actual experience of transferring a property, accessing the registry and dealing with registry officials?

FQ 7. How large is the presence of informal markets for goods, i.e. itinerate vendors?